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What Is HR Technology and Why Should You Care?

BY -

Ryan Brinks

July 27, 2021

HR technology is the software, apps, and online tools that enable companies to manage their people better, fairer, and more efficiently. It covers all aspects of human resources, from talent acquisition to employee experience to performance management, and it helps HR professionals automate, streamline, improve, and save money across HR processes.

Investments in HR tech provide 70% of companies with cost savings of 10% or more (and more than a third with savings of 20% or more), and 64% of businesses benefited from greater productivity or some other measurable business value, according to ISG's 2021 Survey on Industry Trends in HR Technology and Service Delivery.

If you're looking to save your business money or boost productivity by spending less time on old, manual HR processes; speeding up your recruiting efforts; or empowering your employees to do more on their own, we've outlined the human resources technology that can help you get the job done.

HR Tech in Different Bundles: HRIS, HRMS, or HCM?

Whether it's referred to as simply HR software or as part of a more complex bundle, human resources tech has evolved over the years in both its functionality and importance to HR professionals. Different forms of HR tech have been bundled as human resources information systems (HRIS), human resources management systems (HRMS), or the more recent human capital management (HCM). There are some nuanced differences between the three, though they all encompass several core features. HCM typically goes beyond the capabilities of an HRIS and revolves around a unique HR philosophy of its own, while an HRMS is often the most comprehensive in terms of features.

No matter what it's called, the purpose of HR tech remains the same: to do more and do better with the help of ever-improving technology.

How HR Tech Helps You

All HR technology aims to automate or streamline the various core HR functions that are vital to keeping employees happy, healthy, and productive. And in a post-pandemic world, an HR Executive report noted that "89% of the C-suite and 83% of HR leaders say HR technology enabled them to be more flexible and responsive to changing needs while helping their businesses become more resilient."

HR executive on the phone

Manage Talent Acquisition Better

HR tech helps you find the talent that will take your business to the next level, accurately and consistently assess each candidate's qualifications, manage the recruitment process efficiently, and properly onboard new hires more quickly.

Talent sourcing tools like Hiretual, Underdog.io, and Seekout help recruiters by aggregating potential candidates from multiple job boards and other sources, vetting them, filter them, and more.

Candidate assessment tools like VidCruiter, CodinGame, and XOR help HR teams automate screening, evaluate skills and competencies, analyze applicant data, and more.

Applicant tracking systems like Pinpoint, Greenhouse, and Teamtailor help HR leaders keep track of all their candidates' data and insights, as well as identify the top applicants and manage the candidate relationship throughout the process.

Onboarding software like Sapling, ClearCompany, and eloomi helps HR departments welcome new hires programmatically in a consistent, engaging, and helpful format that puts introductions, next steps, and key resources at their fingertips from the very start.

It’s no wonder that the vast majority of high-performing talent acquisition teams leverage the power of a best-in-class HR tech stack to streamline their recruitment process.

Manage Performance Better

HR technology plays an important role throughout the rest of the employee lifecycle too.

A human resources information system (HRIS) helps your team manage compensation and benefits, and houses your database and resources for employees to access all in a single platform. And while that lays a solid foundation, there are also more specialized technologies that can go even further.

Performance management software like Trakstar, Leapsome, and ClearCompany can translate annual planning and reviews into an ongoing talent management process complete with actionable OKRs that are customized and monitored in real time. PeopleOps teams can pair performance with a learning management system that boosts motivation and productivity by fostering an environment that continuously equips your people to add additional value to the business as well as their own skill sets.

Succession planning software like CornerStone OnDemand, UKG, and Fuel50 allows HR leaders to be even more intentional about developing high-potential employees for specialized roles or executive positions.

Manage the Employee Experience Better

The latest technology in human resources is often focused on promoting healthy and engaged employees, as we all know the impact on motivation and productivity that provides. Leveraging new technology to optimize the employee experience can go a long way toward nurturing overall wellness, quality talent retention, and a thriving company culture.

Employee engagement software like Kazoo, Reward Gateway, and Glint helps you expand your performance management by easily incorporating employee communication, feedback, recognition, rewards, and more.

Manage Data Better

Companies who want to go beyond basic human resources technology will look for solutions to help organize, analyze, and visualize employee data in ways that enable faster, more accurate, and more comprehensive data-driven decision-making.

People analytics tools like Lattice, Tableau, and Nakisa help managers better understand where employees' efforts are being directed and what impact it's having on the success of the business.

Beyond workforce analytics, there are also technology solutions that can help HR teams tackle important issues like data storage, data privacy, compliance, documentation, expense management, and more.

HR analytics also help leaders gauge where the company stands in terms of gender pay equity, diversity, and inclusion, among other metrics.

Benefits of HR Tech

The benefits of HR technology are many and far-reaching for today's HR departments. While each innovation reaps specific benefits for the applications it was designed for, here are some of the most common benefits:

  • Automation: Put routine processes on autopilot, and eliminate administrative burdens.
  • Efficiency: Do more with less, save time and money, speed up the time to fill open roles, and reduce paper usage.
  • People experience: HR tech helps your employees have a better experience, in addition to your HR colleagues who can now remove rote tasks from their workdays.
  • Company culture: Hiring the right people, effective onboarding, and building a strong company ethos are all supercharged when you incorporate the right technology.
  • Access: Make HR processes available 24/7 to anyone on any device, increase participation and engagement, and democratize reports and insights for better all-around decision-making.
  • Privacy and security: Store and analyze data securely, sensitively, and comprehensively.

Common Vendors of HR Tech

In addition to the tools noted above for specific solutions, there are several vendors that offer a wide range of HR technology solutions. Here are a few of them:

Big Players

  • LinkedIn is an obvious choice for help with recruiting, but it lacks many other HR tools.
  • BambooHR offers a well-known, comprehensive solution with an app marketplace for additional vendor integrations.
  • Oracle offers features across the employee lifecycle with a focus on global compliance and multi-department management.
  • SAP offers comprehensive, extendable, and innovative solutions focused on the employee experience.
  • ADP offers a wealth of experience and an array of products, led by payroll solutions.
  • Sapling offers remote-first tech featuring onboarding and workflow automation.
  • Freshteam offers a scalable HR suite geared toward talent management.

Emerging Providers

  • PinPoint offers a best-practices-focused applicant tracking and employer branding solution.
  • Bob offers a highly customizable global platform with an emphasis on company culture.
  • Personio offers a European-built one-stop shop for small and medium-sized businesses that's agile and user friendly.

HR Technology Trends

The future of HR tech is headed beyond just digital transformation, and it's being driven by both advancements in technological capabilities as well as shifts in the way we do business in a post-pandemic world. Here are a few big HR technology trends.

Artificial Intelligence

While some may still relegate AI to the realm of futuristic visions, the reality is that it is already here in some limited applications. For example, chatbots are becoming an everyday phenomenon by bringing limited artificial intelligence to many companies' online customer service platforms. 

Machine learning is another form of AI that's being put to practical use. There are now advanced algorithms that predict behavior or risks like attrition or decreasing productivity; that correlate skills, experience, or results in order to recommend candidates, tasks, or training; and that score candidates or employees based on criteria most important to the business.

In addition, more and more Internet of Things (IoT) sensors are finding their way into workplaces in order to collect data and monitor performance, fueling additional advancements in AI and machine learning.

Flexible Working

In the wake of COVID-19 lockdowns, Zoom meetings and remote work suddenly became standard operating procedure, and for many companies, flexible work arrangements may be here to stay. In the right circumstances, remote work can open new doors to talent that was previously unavailable solely due to location.

Flexible and remote work also promotes better work-life balance, which is a value that has become more important to employers and employees in recent years.

Personalization

The trend toward personalization in the workforce owes to the rise of Millennials as the new working majority, according to research by employee communications and advocacy platform Smarp. Urbanized and tech savvy, Millennials—and employees in other generations too—know their freedoms and options when it comes to where they work, so it's more important than ever to attract high-quality talent through personalized offerings, including:

  • Company values that align with personal values
  • Professional development that aligns with career aspirations
  • Profit sharing or rewards for employee advocacy via social media or word of mouth
  • Choice and portability in compensation and benefits, particularly health care and retirement

How to Implement HR Tech

HR technology can come in a variety of formats, from traditional desktop software to cloud-based apps to online software as a service (SaaS). Choosing which format is right for your business depends on what you need and how you want to use it.

Implementing new HR tech should be well planned and thoroughly communicated. Here are some keys to doing it right.

  • Identify your tech needs and opportunities: What are the roadblocks that software could solve? What are you spending the most time on that could be streamlined?
  • Assess how new tech would align: What fits best with your current or target business culture? What would integrate well with existing software?
  • Get employees to buy in: Consider surveying your workforce to find out what HR tech would be most useful. Find out what they like or don't like about possible technology solutions.
  • Develop a plan: Create a change management plan that breaks down the implementation step by step. Incorporate employee feedback into it, and communicate both the plan  and its benefits thoroughly.
  • Incentivize adoption: Give managers and employees reason to make the implementation succeed. Consider gamifying the plan or offering rewards or recognition for adopting the new tech.

Once you've got a list of features and requirements for new HR tech to satisfy, take a look at bundled HRIS platforms to see how many items you can check off your list. Then narrow down your options or pair platforms together from there.

As you can see, the world of HR tech is evolving quickly and having a massive impact on the organizations who can leverage the right tools to hire and retain the best people. You can learn more about how to buy HR tech here, or see a comprehensive list of HR tech categories here. Good luck!

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