HR technology is an all-encompassing term for the different software that human resources departments use to automate and streamline their tasks. HR technology includes software for benefits administration, payroll, performance management, talent acquisition, and workforce analytics. It is common to see HR technology shortened as HR tech.
From simple record-keeping and payroll systems that ran on traditional machines, to cloud-based platforms — HR tech has evolved quite a bit. When cloud-based technology first arrived on the scene, companies no longer needed to use systems stored on their computers. Now, with access to cloud-based systems, companies were no longer responsible for software maintenance. Cloud-based technology provides companies the opportunity to cultivate an “HR ecosystem.” In other words, the most effective HR strategies execute best-of-breed HR tech that connects to one another harmoniously to streamline administrative HR tasks.
HR tech’s step into a digital age has also benefited employees. With the adaptation of mobile-responsive applications and self-service tools, employees have access to HR-related processes like their paychecks and benefits. Innovations like these are meeting employees where they’re at, further enhancing HR processes.
Benefits of HR technology
HR technology is an invaluable asset for businesses. HR technology enhances HR processes with various software, applications, and digital tools.
Automation and efficiency
HR technology helps HR professionals efficiently complete tasks by automating tasks that are repetitive and time-consuming. Tasks like payroll processing, benefits administration, and employee data management are just some of the tasks that technology streamlines. Automation helps HR teams avoid human error, which can be costly mistakes. It may seem like technology removes the human element from HR — but it enhances it. When HR isn’t caught up with administrative tasks, they can spend more time focusing on what matters most — their people.
Enhanced data management
HR professionals use HR tech to securely store and manage data. HR technology is utilized for the organization and storage of staff members’ personal details, performance reviews, training history, and other related information. HR tech enables HR professionals to make informed decisions based on precise data that is both accessible and reliable.
Enhanced employee experience
HR technology enhances the employee experience through self-service functionality. Self-service technology is mobile responsive, allowing employees to access things like their benefits or paychecks from the comfort of their own homes. Regarding benefits, decision support tools help employees navigate their benefits options. Employees can use tools like glossaries, side-by-side plan comparisons, and analytical tools to help them make informed benefits decisions.
Examples of HR technology usage
For many components of HR, there’s technology to support them. Here are examples of HR tech usage:
Payroll
Payroll technology automates the calculation of employee wages, salaries, and bonuses. Payroll technology accounts for factors like hours worked, overtime, deductions, taxes, and benefits. Payroll tech automates tax-withholding and social security contributions as well. Once the calculations are finished, the payment statements are issued. Payroll technology is the software that issues direct deposits to employees. Since direct deposits have become commonplace, payment distribution is much simpler.
Payroll technology with self-service functionality allows employees to access their pay stubs, W-2 forms, and other tax documents at anytime, anywhere.
Benefits administration
Benefits administration is streamlined with benefits technology. Benefits technology provides HR teams with the tools they need to effectively manage employee benefits. The most effective benefits technology solutions connect to other HR systems of record. For example, enrollment data is sent automatically to carriers, while deduction data is sent to payroll. Connectivity with other systems prevents HR from having to enter data twice (or more) across different systems.
The best benefits technology solutions include self-service functionality. Self-service functionality allows employees to take control of their benefits journey through decison support tools. Decision support tools help employees select best-fit plans through glossaries, side-by-side plan comparisons, educational videos, and analytical tools.
Lastly, mobile-responsive systems allow employees to enroll in plans from the comfort of their own homes, with their families input.
Talent Management
Talent management software is great for aligning individual goals with organizational goals. Technology provides employees a look at how they are contributing to the company — showing employees what areas of their work are unproductive. Employee rating functionality allows HR to score and analyze employees performance. Employee ratings providing HR insight into why someone may be struggling and how to help them.
Talent management software streamlines performance management by automating workflows, prompts, tasks, and notifications. When messy spreadsheets are removed from the picture, HR can focus more on having impactful performance conversations to help employees grow and retain them for the long-term.
The most effective HR technology strategy
Connecting best-of-breed HR technology to one another
The most effective HR tech strategies are ones that promote connectivity to other systems of record. By connecting best-of-breed HR tech to one another, HR can simplify their workflows. Streamlining administrative tasks is made possible by allowing data to flow seamlessly between all systems. Connecting an HR tech stack together reduces the amount of manual labor HR must take on. HR will enter data in one system, and others will update automatically, without the need for duplicate data entry. Reducing manual labor gives HR more time to focus on strategic initiatives.
Too often we see employers using solutions that claim to tackle all components of HR, which never ends well. An all-in-one technology solution sounds convenient — why use multiple systems when there’s one that can do it all? Well, if it sounds too good to be true, it probably is…
All-in-one solutions usually handle one component of HR great, while functionality for other components is poor. For example, the payroll aspect may work well, but the benefits functionality falls flat. Organizations cannot afford to compromise their technology strategy out of the perceived convenience that an all-in-one solution can deliver.
Enhancing the employee experience
Technology with self-service functionality helps employees access information on their terms. Employees can look at their paystubs, review their benefits, and request time off right from their phones. In an on-demand world, this is important.
Promote employee-wellbeing
The right HR tech strategy equips employees with tools for success. Regarding benefits, technology provides ways for employees to stay informed. Employees who understand benefits will choose a benefits plan that truly aligns with their lifestyle — helping themselves and their families stay as healthy as possible. Informed employees are more satisfied with their work than those who are not. And satisfied employees stick around.
Conclusion
As HR tech continues to develop, it doesn’t leave out the human element — it enhances it. Automating processes helps HR focus less on administrative tasks, and put more time back in their day to foster better communication with their workforce. With the assistance of technology, HR has the opportunity to improve employee retention and engagement by using convenient tools that help foster better communication across all components of HR.
