HR Technology: A Secret Weapon
In today’s complex organizational structures, HR technology is a powerful, yet often overlooked, force. This blend of software and hardware is designed to automate essential HR functions. From streamlining payroll processes to simplifying talent acquisition, enhancing workforce analytics, improving performance management, and making benefits administration more efficient, HR technology is transforming the way organizations operate. Its impact is significant, leading to increased productivity and efficiency across various sectors.
Rapid Evolution of HR Tech
HR technology has been evolving rapidly in recent years. Industry giants like Oracle, Workday and SAP now share the stage with specialized HR tech vendors, all offering core HR technology systems to employers of all sizes, across the globe. One significant trend is the migration from on-premises systems to cloud platforms and SaaS solutions, a shift that offers increased flexibility, scalability, and cost savings. This digital transformation is not just a trend among large corporations. Small and midsize employers are also embracing the digital revolution, digitizing their HR functions to stay competitive in the modern business landscape.
Human Capital Management: Viewing Employees as Assets
Human Capital Management (HCM) has revolutionized the way organizations manage their employees. This approach, which views employees as valuable assets akin to financial and physical resources, leverages integrated software to automate and streamline various HR functions. HCM unifies employee records in core HR and talent management systems, providing a comprehensive solution for recruitment, performance management, learning and compensation management, succession planning, and compliance. This holistic approach has led to significant improvements in efficiency and productivity in organizations worldwide.
HRIS, HRMS, and HCM: Understanding the Difference
HRIS (Human Resources Information System) traditionally serves as a digital repository for employee data, automating routine HR tasks such as attendance tracking and benefits administration. It’s the digital equivalent of the filing cabinets where employee records used to be stored.
HRMS (Human Resource Management System), on the other hand, is a more comprehensive system that includes all the features of an HRIS but also integrates functions such as recruitment, performance evaluation, and learning management. It’s designed to manage people, policies, and procedures.
HCM (Human Capital Management), the most recent evolution, goes a step further. While it encompasses the functionalities of both HRIS and HRMS, it adds a strategic layer by treating employees as assets (human capital) whose current and future value can be measured and enhanced through investment. It’s not just about managing employees – it’s about strategically investing in their development and deploying them accordingly.
In essence, while HRIS and HRMS focus more on operational and administrative tasks, HCM shifts the focus towards strategic initiatives like talent management, succession planning, and organizational development.
HR Technology in Action
HR technology is not just a theoretical concept; it is a practical solution that brings tangible benefits to organizations. Let’s explore some key areas where HR technology is making a significant impact:
- Payroll: HR tech vendors are tackling the challenge of administering wages, salaries, and tax withholding across multiple jurisdictions. Some even offer standalone payroll services, particularly for SMBs.
- Compensation Management: This aspect focuses on determining the best pay rates to attract, retain, and reward employees.
- Travel and Expense Management: HR departments are using tech to provide travel services, record expenses, and link to the payroll service.
- Talent Management and Recruiting Automation: From recruiting to compensating employees, talent management is a key component of HR tech. It includes applicant tracking systems, candidate relationship management, and employee assessment software. Recruiting automation tools streamline the hiring process, from sourcing candidates to scheduling interviews.
- Performance Management: Say goodbye to the traditional annual job review. Continuous performance management is the new norm, with interactive features for employee feedback.
- Employee Engagement: HR tech is keeping workers interested and enthusiastic about their jobs with mobile apps, communications platforms, and gamification techniques.
- Employee Scheduling and Smart Scheduling: HR tech is revolutionizing employee scheduling, making it easier to manage shifts and workloads. Smart scheduling features use AI to optimize shift assignments based on factors like employee availability, skills, and workload balance.
- Benefits Administration: HR tech is digitizing benefits administration, enabling employees to engage with benefits choices more easily. It’s not just about health and disability insurance, but also corporate wellness and well-being.
- Learning: Corporate training and education programs are moving to interactive online platforms, with learning management software customizing training programs and assessing student performance.
Artificial Intelligence: A Game Changer in HR Tech
Artificial Intelligence (AI) is revolutionizing HR practices, making organizations better by analyzing, predicting, and diagnosing to help HR teams make better decisions. AI can be embedded in functions such as recruitment, training, onboarding, performance analysis, retention, and more. Here are some ways AI is changing the role of HR and HR technologies companies:
- Employee Experience Platforms: Platforms like Microsoft Viva and ServiceNow are becoming a massive, high-priority product category. They help manage hybrid work, employee listening, onboarding, and custom career and development tracks.
- Talent Intelligence Platforms: AI-powered data platforms like Eightfold, Beamery, and Skyhive are helping companies with sourcing, internal talent matching, intelligent succession management, and data-driven solutions for assessment, job design, and skills analysis. These systems are exceptionally different and very high-value new offerings.
- Talent Marketplace and Career Pathway Solutions: Vendors like Gloat, Fuel50, Guild Education, and EdAssist are offering innovative solutions for intelligent career management, internal mobility, job matching, mentoring, and other talent intelligence solutions. This is a “blue ocean” and we’ll see lots of activity here.
- AI-powered HCM: In the landscape of AI for HR tech, Movo stands out as an all-in-one HCM solution. With AI at its core, Movo provides frontline workforce management, HR automation, and employee engagement solutions. Features like AI for load balancing shifts, same-day pay, and a modern, mobile-first employee scheduling software make Movo a powerful tool. It also offers tools to encourage employee mobility and maximize engagement.
- Lifecycle Employee Listening Systems: Platforms like Qualtrics, Perceptyx, Medallia, Glint, and Workday Peakon are becoming “data analytics platforms” first, survey platforms second. They collect data from many sources and give companies a “complete view” of employee sentiment, satisfaction, engagement, and ultimately productivity.
- Capability Academies or Mastery Learning Platforms: These platforms are where people go to browse content, find experts, take a course, get an assignment, and really “learn” something significant and new.
- Talent Acquisition Suite: The recruiting market will see innovation in tools that provide Interview Intelligence, video interviewing, technical skills assessment, and soft skills assessment. These are “must-have” addons to the ATS.
- Contract Worker Management Platforms: With the growth in hybrid, contract, and gig work, we’ll start to see these systems come together with the core HRMS. Vendors like Magnit, Legion, VNDLY, a Workday Company, and SAP Fieldglass are leading the way.
- Conversational AI: Tools like Paradox’s chatbot system, Olivia, can market, screen, and even hire people with almost no human involvement necessary.
- Workspace Management: Now that hybrid work is here, companies need a way to schedule a room, arrange equipment, find the team, and set up all the audio-visual or other tools for meetings. Vendors like ServiceNow, Cisco, and Microsoft are getting seriously interested in this massive new market.
Looking Ahead: The Future of HR Tech
As we look to the future, we can expect HR tech to continue evolving at a rapid pace. AI will play an increasingly important role, with advancements in machine learning and natural language processing opening up new possibilities for automation and data analysis. We’ll also see more integration between different HR tech tools, creating a more seamless and efficient HR tech ecosystem.
In the realm of talent acquisition, we anticipate further advancements in recruiting automation, making the hiring process even more efficient. Similarly, employee engagement tools will continue to evolve, leveraging new technologies to keep employees motivated and connected.
In the area of benefits administration, we foresee a greater emphasis on personalized benefits, with HR tech enabling more tailored benefits packages that cater to the unique needs of each employee.
And let’s not forget about learning and development – with the rise of remote work, we expect to see a surge in online learning platforms, making professional development more accessible than ever.
HR tech is a game-changer, transforming the way organizations manage their most valuable asset – their people. With the rapid evolution of HR technology, it’s more important than ever to stay informed and make the most of the tools available. Whether it’s payroll, talent management, employee engagement, or benefits administration, HR tech is here to stay and will continue to shape the future of work. As we navigate this exciting landscape, let’s keep our eyes on the horizon, anticipating the trends that will define the next era of HR tech. The future is bright, and we can’t wait to see what it holds.