Trends in HR Technology

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Trends in HR Technology

Storing, securing, and using confidential information is an important task in HR, and technology can be a useful tool in maintaining this information and using it to aid decision-making. This article will cover different types of HR technologies, tips in choosing an HR technology, and trends with HR technologies.

Types of HR Technology

A Human Resources Information System (HRIS) is a database that allows employers to track and report various employee-related information. Employers can usually customize the system to their organizational needs, identify and add specific modules, and activate features associated with each module.

HRIS has the broadest range of capability of HR-related systems and often tracks information related to many different HR functions, including:

  • Payroll
  • Time and attendance
  • Salary and benefits administration
  • Performance management
  • Recruiting and selection
  • Learning management

An Applicant Tracking System is a software application that assists specifically with recruitment. The main function of ATS is to provide a central location and database for an organization's recruitment process. Applicant tracking systems can manage applications received and job requisitions, report key metrics associated with the recruitment process, and can even automate communications with applicants and aspects of the on-boarding process.

A Learning Management System/Performance Management (LMS) is a software application used for the administration, documentation, tracking, reporting, and delivery of educational courses or training programs.

Such systems can manage information related to learning and performance management including:

  • Skills and competencies
  • Training and education programs and participation
  • Succession and career development planning
  • Performance reviews
  • Multi-rater assessments

A Talent Management System is a software application that focuses on providing assistance to organizations with regards to managing talent.

It is very similar to an HRIS or an LMS and typically allows organizations to track information related to the following areas of talent management:

  • Recruitment and hiring
  • Performance management
  • Recognition and rewards
  • Learning and development
  • Compensation management

These systems are useful in helping organizations meet current and future organizational needs by integrating strategies and systems designed to improve processes for recruiting, developing, and retaining key talent.

Compensation Management Software is used to manage and automate compensation and benefits processes. The software can be utilized to manage bulk data, minimize human error, and reduce processing time in regards to the administration of benefits and compensation.

It often includes features which help track market pay data, plan merit increases, determine accurate budgets, conduct compensation analysis, as well as build and manage compensation structures and pay for performance plans.

Time and Attendance Software is used to record employees' start time, end time, and attendance records. It is also commonly used to track:

  • Meals and breaks
  • Paid time off
  • Leave
  • Jury duty

Time and attendance software helps organizations with controlling labor costs by reducing over-payments, decreasing time spent on tracking time and attendance, and also providing detailed records of attendance issues.

Factors to Consider When Choosing an HR Technology

Selecting and vetting the appropriate HR technology for your organization's needs is important, as technology is costly and varied. It's helpful to assess technology needs in collaboration with a business analyst or IT individual at your organization.

Be sure to consider the following:

  • Will the system meet the organization's needs?
  • What is the cost of the system, and do the benefits outweigh the cost?
  • What degree of flexibility is needed?
  • Can data be imported into the system? If so, how? If data is going to be imported from multiple sources such as Excel or other formats, will the software be able to accommodate this?
  • Will the software be able to accommodate operational procedures?
  • Will the technology be able to grow and scale with the organization?
  • Who will be responsible for implementing or building the solution?
  • What level of training will be needed?
  • If training and development on the system is involved, is there a charge?
  • Who will own the data and maintain the system?
  • What types of maintenance and upkeep are required for the system?
  • What security measures are built into the system?
  • Will the technology provide HR with the authority to decide who will be allowed access and to what degree?
  • What types of reporting capabilities are available from the system?
  • What level of customer service is provided?

In addition, make a list of "must haves" and "nice to haves." Compare different vendors and technologies and how well they meet your needs. It is important to note that some HR technologies have overlapping functions and therefore one or two technologies may suffice instead of multiple technologies.

Trends

Big data and cloud-based technology are two trends emerging in HR technology. Below is a summary of these trends and how they may affect your organization's technology practices.

Big Data

One of the biggest trends in HR technology is using big data, or workforce analytics, to evaluate and improve HR practices. "Big Data" involves integrating and analyzing internal metrics, external benchmarks, social media data, and government data to produce more informed solutions to business problems facing an HR department. Research conducted by Bersin by Deloitte shows that 60% of companies are now investing in Big Data and analytics tools to help make their HR departments more data-driven.

Research conducted by Forbes found that out of 480 large organizations using Big Data, only 4% have achieved the capability to perform predictive analytics about their workforce. This research also shows that only 14% of the organizations have completed significant statistical analysis of employee data.

While most organizations are still working on getting a handle of Big Data, leading companies are seeing high returns for their efforts. Forbes reports that the leading organizations of Big Data have stock returns 30% higher than the S&P 500, are twice as likely to be delivering high impact recruiting solutions, and their leadership pipelines are healthier. The HR teams of these organizations are also four times more likely to be respected by their business counterparts because of their data-driven methods.

Cloud-Based Technology

Organizations are increasing utilizing cloud-based computing to increase capacity, enhance functionality, or add services on-demand without having to resort to expensive infrastructure. Many systems are cloud-based and generally have five characteristics:

  1. Ability to run a program or application on many connected computers at the same time
  2. Elasticity and the ability to scale up and down
  3. Self-service provisioning
  4. Application programming interfaces
  5. Billing and metering of service usage in a pay-as-you-go model

The advantage of cloud-based technology is that it maximizes shared resources and allows organizations to set up applications faster, improve manageability, and require less maintenance.


On a final note, with the variety of technologies and applications available for HR to use, it is important for an organization to determine their current and future needs, price range, and resources available as well as the general trending outlook for HR technology before choosing the best fit for the company.

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