How Is Technology Changing the HR Industry?

How is Tech Altering the HR Industry

We’re living in a digitally connected world. Mobile devices are a medium for going viral, the eponymous “cloud” helps businesses collaborate, and artificial intelligence blurs the lines between authenticity and illusion.

As for the Human Resource industry, CEO and co-founder of KAMI Workforce, Robert Lin, says it’s long overdue for a digital revamp. “Technology isn’t just positioned to streamline HR processes but helps teams orchestrate data-driven decisions that drive organizational growth.”

The only caveat is that companies are slow to adapt in their HR teams, with reasons ranging from resistance to change to data privacy concerns.

We’ll explore the many ways technology is shaping the HR industry, starting with an overview of the different HR tech available in the market. By the end of this post, you’ll be able to make profound decisions for your organization’s HR team.

What Are HR Tech Solutions in the Market?

Human Resource Technology, or HR Tech, is software designed to streamline HR and admin processes through automation. Its primary purpose is to streamline tasks and allow teams to make more data-driven decisions.

When choosing HR software, you’ll likely come across three main types: HRIS, HRMS, and HCM. While they do have overlapping features, these technologies differ in terms of scope and HR functions.

HRIS (Human Resource Information System) provides HR teams with a central repository for employee data. It also automates critical administrative tasks like payroll, attendance, and recruitment. An HRIS works best for startups and small to medium businesses.

HRMS (Human Resource Management System), on the other hand, covers a broader scope of HR functions. Think of it as an upgraded version of an HRIS.

In addition to automation and data storage, an HRMS lets you create workflows for recruitment, performance management, and compensation management. This unified approach not only prevents data silos but enhances data accuracy as well.

HCM (Human Capital Management) solutions take a more holistic approach to HR management. It comes with features that allow comprehensive workforce management, such as succession planning, upskilling, and performance tracking.

How Does Technology Continue to Impact HR Practices?

how does tech impact hr

1. Tech Helps Recruitment Teams Become Agile

Talent acquisition is evolving. We’ve seen significant changes in how prospects find job postings. What was once done through cold calling and job fairs is now shifting towards paperless transactions on search engines and social media.

Remove biased recruitment, focus on diverse hiring

Recruiters have shifted away from biased recruitment methods. As more companies strive for more diverse teams, there’s a greater emphasis on a candidate’s skills and relevant experience rather than solely focusing on educational degrees.
Technology simplifies this process for recruiters through the use of AI-powered screening and data-driven decisions. This way, recruitment teams ensure inclusivity and neutrality.

Bridging the gap between recruiters and hiring managers

Technology bridges the gap between the evolving expectations of candidates and organizations. A company that employs an Applicant Tracking System (ATS), for example, gets to streamline its recruitment process by centralizing candidate data and interviews.

An ATS also allows recruiters to set up custom workflows for different stages of the recruitment process. This instantly reduces administrative work and allows teams to recruit at scale.

Most recruitment platforms leverage artificial intelligence for candidate sourcing as well. AI identifies qualified candidates based on predefined criteria, improving the accuracy of job matching.

2. Tech increases employee engagement

HR systems have made a profound impact on employee engagement. Through data-driven insights and personalized learning, organizations can easily leverage tech to enhance employee engagement and create a more positive work environment.

Tracking employee performance

HRMS and HCM systems provide line managers with the tools they need to track employee performance and gather real-time feedback. Creating space for continuous feedback allows leaders to promptly address areas for improvement and recognize achievements.

Immediate feedback after an event or behavior gives employees a clear understanding of their actions and how it impacts their work. This helps them feel more engaged and motivated to improve in their roles.

Rapid upskilling and reskilling

Upskilling and reskilling employees are imperative for an organization to stay competitive. 

For one, it helps future-proof your workforce by keeping them up-to-date with the latest technologies, ensuring that they adapt to changes in their roles. Investing in employee growth also improves their overall engagement and productivity.

In a 2020 survey by PwC, a good 93% of CEOs who introduced upskilling programs reported an increase in productivity, improved talent acquisition and retention rates, and a more resilient workforce.

Needless to say, companies that stick to traditional learning methods, like lecture-based learning and printed materials, need to start enhancing their strategies or risk getting left behind.

HR tech identifies the gap between an employee’s current skills and the skills required to advance in their careers. This helps HR teams create more targeted learning pathways and employees can learn at their own pace.

Centralized learning platforms

Most HR solutions allow users to upload learning materials, like video courses and tutorials, in one place. Employees simply need to log in to the platform, launch the course, download resources, complete assessments, and earn available certifications.

HR tech simplifies tracking as well, giving leaders better oversight of an employee’s progress and letting them adjust their learning paths as needed.

3. Tech bridges the gap between HR teams and line managers

Technology lets data do the talking, so HR teams and managers can make more data-driven decisions for their teams.

Whether it’s identifying attendance patterns, headcount planning, or performance management, tech enhances the relationship between HR teams and managers by providing a more standardized process.

4. Tech reduces operational costs

Businesses, no matter the size or industry, aim to balance their budget and expenses. Technology provides that balance between cost-cutting measures and efficiency.

With the right HR solution, you can reduce business costs while allocating resources to optimize/enhance other aspects of your business.

Automating laborious HR tasks

Manual tasks, such as payroll and attendance processing, are time-consuming and costly. Automating these tasks with an HRMS not only saves time but reduces the need for human intervention.

It also minimizes the risk of human error, non-compliance, and security breaches that arise when storing data on spreadsheets – saving you money in the long run.

Cloud computing

Cloud solutions are accessible anytime, helping HR teams facilitate the needs of remote workers. They also come with self-service portals, from mobile clock-ins to leave requests.

Moreover, cloud HR systems are faster to implement than traditional, on-premise software. This is especially useful for businesses that are undergoing rapid growth.

5. Tech future-proofs your business

HR teams are the heart of any organization. Their role in compensation and benefits, performance management, and people management encompass organizational culture.

By employing a robust HR system, HR teams can quickly respond to evolving workforce needs and market conditions.

Navigating Challenges in Implementing HR Tech

Navigating Challenges in Implementing HR Tech
Technology is transforming HR in unprecedented ways. But along with the benefits we’ve outlined above come a set of challenges that require proactive solutions.

Let’s delve into the potential hurdles businesses need to overcome as they integrate technology into their HR practices.

Technology threatens “human” intervention

It’s like something straight out of a post-apocalyptic movie. Robots and AI taking over human resources.

Whether we resist the change or not, technology isn’t slowing down any time soon. People and businesses are always on the lookout for software and apps to simplify processes.

But could technology jeopardize the “humans” behind HR work? The short answer is no.

HR professionals play a critical role in every organization. You need human interaction for areas like empathetic communication and conflict resolution. Creative problem-solving is also an attribute that’s unique to us humans.

At its core, technology will complete HR by automating routine tasks, providing data insights, and improving overall efficiency.

How can businesses address this resistance to change?

1. Conduct surveys, interviews, and discussions with your employees

Job security and perceived inconvenience are all common – but valid — reasons why employees resist new technologies. Run a survey or questionnaire to gauge what’s driving these concerns and use their input to improve how you want to onboard new tech to your organization.

2. Establish open and transparent communication

Openly communicate the reasons for implementing new technology, its benefits, and how it aligns with your overall business goals. This would also be a good time to reinforce your role as an HR professional as you lead your employees toward this change.

New technology can be tricky to onboard

Before new technology can make an impact, it needs to be onboarded. It goes without saying that onboarding new tech comes with its challenges. There’s the fear of making mistakes, lack of technical know-how, and as we mentioned earlier, an overall resistance to change.

If you’re running a multi-generational and multi-cultural workforce, you’ll find that your end users would have varying comfort levels with technology.

Bridging these gaps involves communicating with employees along with:

1. Providing adequate training

Employees need to be involved from start to finish. Ensure that they get comprehensive training sessions and have access to training materials like user guides, videos, and FAQs.

2. Identifying internal stakeholders

It’s not practical to have your entire organization drop their tasks for a sit-down demo with your provider. Instead, try identifying key stakeholders or internal “champions” that can lead the integration and liaise any concerns with your provider.

3. Establishing a support channel with your provider

Before locking down on a contract, it’s important that you check if your HR solutions provider has dedicated support channels.

4. Setting up a transition period

Define a timeframe where both your old (or manual) and new systems are available for use.

Use this period to give individuals time to adapt to the new technology while still having their old processes or tools available. Make sure you clearly communicate the start and end dates of the transition period to all parties.

Technology poses ethical issues

Let’s address the elephant in the room: Yes, when mismanaged, technology can indeed pose ethical issues.

Facial recognition tools and cloud-based solutions, for example, can raise issues about privacy violations, data breaches, and unauthorized access. These ethical concerns only lead to further distrust over new systems.

1. Develop clear guidelines

As with any new technology or process, employees just want transparency. Set clear guidelines on how and why data is collected to protect an individual’s right to privacy.

2. Collaborate with the vendor

Ethical issues can be better addressed by your vendor, so have them walk through your contract and other agreements to ensure your data stays protected.

Data privacy isn’t the only aspect that you can work out with a vendor. You can ask how they protect your data. Inquire about encryption methods, how and where your data gets stored, and access controls (multi-factor authentication, role-based permissions, etc.).

Other inquiries you should be asking your vendor are security certifications as well as their action plans in case of an outage or data breach.

Transform Workforce and HR Processes Today

Before applying new technologies, consider your organization and its people. What existing problems do you want to overcome with a new platform? How do you plan to roll this out to your employees, including the challenges you foresee in adoption?

With the right preparation and partner, you get to boost efficiency, make informed decisions, and join the ranks of companies that are already reaping the benefits of HR tech.

Striking the balance between technology and human intervention also lets HR teams focus on what truly matters: nurturing talent and building a safe and thriving work environment.

KAMI Workforce offers customized HR technology and people solutions specially designed for growing businesses and enterprises. Learn more about our payroll, attendance, performance, timekeeping, and expense modules today.