The Rise of the Digital HR: The Real Impact of Technology on Human Resources
“HR technology? No thanks, we’re not interested in fads.”
This mindset is one of the biggest mistakes enterprise HR leaders can have. In the last 13 years, HR technology adoption has been on a steady rise, making it the norm rather than a nice-to-have.
In this day and age when companies are going through a rapid digital transformation, it’s important for HR departments to keep up. According to a study by The Hackett Group, 55% of HR organizations have a digital transformation strategy in place in 2019. This is expected to increase to 84% in the next 2-3 years.
The effective and strategic use of technology in HR functions is not just a lofty concept to keep up with the ultramodern workspaces perpetrated by Silicon Valley giants. It is a competitive advantage that allows HR departments to support enterprise goals and deliver better HR services to their organizations.
However, according to The Hackett Group’s report, “despite substantial investments in technology, many HR organizations struggle to leverage these capabilities to reduce their operating costs and provide more useful services to employees and managers.”
Fully harnessed, this is how technology can impact HR practices:
From Administrative Work to a Strategic Role
In the modern and digitally transformed workplace, hardly any employee’s performance is measured by how many administrative tasks they’re able to complete.
So, why is it that a significant percentage of HR professionals are still shackled to doing administrative and manual tasks?
Gone are the days when the HR department only served daily transactional functions. According to HR consultant Nathanael Sinclar, “the role of HR in today’s workforce is becoming an increasingly strategic one, working hand-in-hand with management to influence and direct employee engagement, company culture and major company changes.”
This is supported by a survey conducted by TotalJobs.com which revealed that the members of the “HR Elite” spend no more than 8.1% of their time on administrative work. The biggest chunk of their time is spent on meeting with senior staff and business partners.
As the primary liaison between the company and its human capital, human resources can better mobilize an organization’s most important asset (a.k.a. its people) to bring it closer to its goals. However, HR leaders/professionals won’t be able to do this if they are stuck at their desks doing paperwork.
The use of HR technology promotes self-service, which is preferred by 73% of full-time employees, especially among the younger, digital native-members of the workforce. For example, a time clock software enables employees not just to log their hours, but also check their accrued PTOs.
All in all, not only does self-service HR technology enhance employee experience, it allows HR professionals to strategize, plan, and execute programs that bring more value to their organizations.
More Agile HR Departments
What started as an approach for software development, agility has become one of the gold standards in team-based operations across different industries in organizations big and small. The benefits of an agile approach are well-documented including how Amazon CEO Jeff Bezos is using agile practices to keep the retail giant where it is, on top of the corporate food chain.
However, it’s still rare to hear how agility is changing the face of human resources. According to executive coach Jeff Gothelf: “With agile processes and new technology permeating every corner of our organizations, there is surprisingly little published knowledge about how to integrate HR and other crucial supporting functions into the product development process or how to increase the agility in the ways they work.”
Technology created the primordial soup, so to speak, where all agile methodologies originated and technology will also be the fuel that will catalyze agile HR practices.
One of the ways technology helps HR departments be more agile is with big data.
In the past, it would take HR a lot of time and money to access, organize, process, and analyze a huge amount of data. Not anymore. Technology is allowing HR professionals to do the same thing at a fraction of the time, making HR practices more scalable and flexible.
Take the case of ING as an example. ING was able to focus on crafting an agile business structure which included human resources. As part of this initiative, ING re-interviewed the 3,500 employees based in its headquarters. At the end of the process, 40% of the employees were either re-assigned to other departments or left the company for better-suited roles in other companies.
Other enterprises can do the same thing with the aid of HR technology. With HR apps and software, human resources can better “listen” to their workforce and quickly act on optimization opportunities. For instance, using performance management technology, HR leaders can easily identify employees who might excel better in a different role or team members who would benefit from specific training programs.
Technology gives HR access to these insights at the right time so relevant actions can be taken in a timely manner.
Improved Core HR Functions
From recruitment, to talent retention, employee development, and benefits administration — arguably the most obvious impact of technology on human resources is how it makes core HR functions more efficient.
The overall improvement in the core HR functions mostly stem from the automation capabilities they now have.
For instance, according to Ernst & Young, recording I-9 information costs enterprises a little over $8 per new hire while recording W-4 and other tax information costs almost $11 — a combined total recording cost of $19 per new hire. Recently, McDonald’s made headlines when it opened 250,000 vacancies. If the fast-food giant had recorded its new hires’ I-9 and W-4 manually, it would have cost them $4.75 million.
The savings from manual HR functions is enough to justify any investment to embrace technology; not to mention other significant improvements in core HR functions such as being able to attract top talent, more effective workforce development, lower attrition rate, etc.
<h2class=’sh-sentence’>HR Technology is a “Now” Requirement
Stop thinking of HR technology as the next step or an item in an investment pipeline. High performing HR departments have realized their crucial role in the digital transformation of their organizations and the competitive advantage a strategic adoption of HR technology gives.
Dean Mathews is the founder and CEO of OnTheClock, an online employee time tracking app that helps over 8,000 companies all around the world track time.Dean has over 20 years of experience designing and developing business apps. He views software development as a form of art. If the artist creates a masterpiece, many peoples lives are touched and changed for the better.