Blog 3- HR Tech (HR technology) 2023

 What is HR Technology?

The use of hardware and software to assist a variety of human resource duties and tasks is referred to as HR technology. HR technology often covers payroll, employee benefits, and applicant recruitment. However, more contemporary HR technology covers a larger range of HR-related issues, including the use of artificial intelligence (AI), deep data analytics, and remote and hybrid work settings. Additionally, a younger workforce is driving an increase in HR directors' use of technology, spurred on by features like self-service capabilities and tools for ongoing learning.

As a result, both business executives and employees gain from HR technology. HR technology developments have the potential to significantly improve business operations and prepare for the problems of the workplace of the future.

Figure 1 Future of HR Tec (Vaghasiya, 2022)

HR technology trends will open up new prospects for HR directors. For instance, having the right digital communication channels in place makes it simpler to communicate information to a remote workforce. Making it simple for employees to communicate queries and concerns to management, whether they are in the office working remotely or in a hybrid environment, is the top technological goal for HR leaders in the coming year, according to the 2023 Paychex Pulse of HR Survey. Small businesses may also understand that now is the ideal moment to modernize their systems to more effectively utilize HR tech trends:

• Ensure adherence to all applicable rules and regulations regarding employment.
• Monitoring attendance and time.
• Maintaining current records on your employees. Ex: Payroll system.

HR teams are becoming much more involved in their company's overall strategic objectives for larger corporate structures owing to advancements in human resources technology.

By accelerating the pace and efficiency of managers and the teams they oversee, new HR technologies may produce quantifiable benefits. These people and groups are frequently assisted by HR and IT specialists in turn, who assist them in identifying the areas where technology works best and deploying it to achieve optimum success.

HR technology has advanced quickly in recent years, with major employers all over the world adopting core HR technology systems from specialized HR tech suppliers as well as giant enterprise software providers like Oracle and SAP. Many of these organizations are transitioning from existing on-premises systems to cloud platforms, including SaaS, to enter the second generation of HR technology. Small and midsized businesses are also taking significant steps to digitize their HR processes, frequently turning to SaaS platforms or cloud-based suppliers for HR technology outsourcing.

Refer to the example below which are the features covered by Saas HR.

Figure 2 Features of Saas HR(Ali, 2022)

 

What is human capital management?

The concept of "human capital management" (HCM) refers to a broad range of corporate activities that consider personnel as resources that can be managed objectively, much like businesses view and manage other resources like cash and capital equipment.

Systems for human capital management (HCM) may comprise distinct subsystems for compliance, succession planning, learning and performance management.

Numerous providers of HR technology also focus on creating specialized tools for elements of HCM like talent acquisition. An example would be online markets or job boards where employers and job seekers can connect.

HCM vs. HRIS and HRMS

The words HRIS (human resources information system) and HRMS (human resource management system), which have historically been used to sell core HR technology systems, have started to be replaced in recent years by HCM.

Even though there aren't many differences between the three classifications, HRIS tends to offer technology for automating and storing employee data for essential HR tasks, while HRMS companies add HCM features like talent management.  

Examples of the applications of HR technology

Payroll

Many HCM systems have the capability of paying and tracking employees' wages and salaries as well as withholding taxes and other deductions, whereas certain HR technology suppliers specialize in payroll.

Payroll services are also offered by cloud-based HR technology outsourcing providers as a crucial element of a range of digital HR offerings or as a stand-alone service, especially for SMBs.

To monitor the number of hours that employees spend working and keep track of the payments and salaries they have been paid, some firms utilize time and attendance software.

Payroll is connected to compensation management, but it also has its own niche. This class of HR software is used to find the optimal pay rates for appealing to and retaining employees and rewarding performance. The majority of talent management suites include it.

Travel and expense management

Travel and expense software, which HR departments use to arrange trips for staff members, keep track of associated costs, pay suppliers, and repay staff members via a connection to the payroll service, is also related to payroll.  

Through automated analytics and reporting, some businesses employ expenditure report software to give management a comprehensive view of the company's spending.

Mobile expense management technologies, which are frequently managed by HR, offer usage and cost data regarding the mobile services and devices the company provides to its employees.

Talent management

The process of hiring, fostering, rating, and rewarding personnel is known as talent management. It is frequently handled by independent applications or software suites for talent management that include integrated modules for hiring and onboarding, training and development, performance management, compensation management, and succession planning.

Vendors of HR technology have created a range of applications and SaaS platforms to find job prospects, assess them before to interviews, and follow them during the hiring process.

Talent acquisition, the strategic process of locating and employing the best workers to support an organization's goals, is closely tied to talent management. Acquiring personnel has grown more crucial as employers increasingly see employees as assets, especially in areas where competition is fierce, like the technology sector.

Some well-liked technologies for talent acquisition and management include:

• ATS, or applicant tracking system to analyze resumes, create interview requests for potential applicants by email and advertise job openings on a company website or job board. Other features can include language support, tracking of pre-screening questions and responses, and automated resume rating.

• Employee referral software for employee referrals enables HR to compile recommendations about prospective and current candidates from current employees.

Software for evaluating potential employees which assists employers in determining if a candidate is qualified for a post. Some tests determine a candidate's personality attributes or cultural fit with the firm, while others concentrate on abilities or essential information.

Performance management

Employers are beginning to embrace the idea of continuously monitoring employees' job performance rather than using the standard annual performance evaluation as they have begun to automate other previously manual HR operations.

Employee feedback is occasionally made possible through interactive features in performance management platforms that are both separate from HCM systems and modules within them. This is known as continuous performance management.

Employee engagement

The use of HR technology for employee engagement is one of the tools being utilized more and more in performance management.

Platforms and applications for employee engagement employ a range of strategies to maintain employees' enthusiasm for and interest in their work.

Mobile applications featuring social media-like posting and commenting features, communication tools that let employers share information and employees interact, and gamification strategies are a few examples. These strategies aim to engage employees by making apps enjoyable.

(HR Technology Trends for 2023, no date)

Benefits administration

In general, HR technology for benefits administration started to become more digitized more recently than core HCM operations, not just by placing benefits information online but also by making it easier for employees to interact with benefit options.

(HR Technology Trends for 2023, no date)

Conclusion 

To get the most out of HR Tech, it's critical to choose and deploy solutions that are in line with an organization's objectives and requirements, while also taking into account any potential obstacles and ensuring that employees are adequately trained.

References 

HR Technology Trends for 2023 (no date) Paychex. Available at: https://www.paychex.com/articles/hcm/technology-trends-in-hr (Accessed: 21 August 2023).

What is HR Technology (Human Resources Tech)? (no date) HR Software. Available at: https://www.techtarget.com/searchhrsoftware/definition/HR-technology (Accessed: 21 August 2023).