The realm of HR tech has expanded considerably in the recent few years. Both as the reflection of evolving employee preferences and companies that have undergone significant business changes, tech applications like AI, big data analytics, and automation are reshaping how HR professionals operate. Almost every facet of modern-day HR today is touched upon by advents in digital technology, enabling them to make better decisions. But how did we reach where we are with HR tech? And what changes are going to further impact the landscape? To answer such questions, it's necessary to look closer at the external business ecosystem is evolving.
The spur of HR tech and the application of digital technologies across the various employee management cycle has today reshaped much of the HR landscape. One look at the market for HR services is good enough to note how more and more nuanced software programs are providing tailor-made talent solutions. But this rise has been a response to the premium on skilled talent that has gone up due to skill changes. Hiring for niche skills has become difficult and there is a keen focus on retention today. Business leaders also agree that having the right talent forms an important part of organizational priorities. For HR professionals this has meant to able to hire, train, and retain their skilled employees. These are the forces that guide the HR tech landscape today. But its impact has been realized in multiple different ways through the years. The new talent landscape needs to be adaptive (To know more abput adaptive HR, particpate in The HR Transformation Study 2019 to 2020) which means HR organizations need to find new ways of mobilizing human effort, something that has already had profound implications across many industries.
The advent of HRMS and HCM cloud solutions
An important milestone in the development of holistic HR tech solutions was the advent of cloud-computing based solutions. With the ability to integrate easy access with the potential to make decisions on a real-time basis, vendors and service providers filled the HR tech market with a solution like HRMS, payroll management, etc. This meant HR professionals had a faster and more efficient way of digitalizing much of the data generating aspects of employee management and put it ‘on the cloud’ for processing and better decision making.
The rise of cloud computing meant that it’s a rather a question of ‘when’ to invest in such HR tech than it being a question of ‘if’ one wanted to invest. While digitalization of HR activities remains an important step today, it was to be the first of many steps that digital technologies would take into the realm of employee management. The advent of cloud computing helps HR professionals cater to more transactional problems in their work but did little to solve problems of culture, learning, and other more transformational activities.
Enabling continuous performance management
Performance management has been a cornerstone of the modern-day HR function. For employees, it translates into an ‘increment conversation’ while for employers and managers, assessing performance remains an important way to assess the productivity levels of their employees. But today with HR tech, assessing performance is a more effective endeavor. Many companies have already begun moving ahead of the traditional ‘bell curve’ method of gauging performance and now prefer a more continuous performance management system that assesses productivity levels more closely. HR tech and digital platforms have enabled HR professionals and managers to make performance conversations more constructive, being even able to incorporate multiple stakeholders—like in the case of a 360-degree review process—be part of performance management.
The changing external ecosystem has made companies address their skill needs more rapidly. While hiring people with the right skills has become an important way of doing so, reskilling and training the existing working population remains to be an important way for companies to deal with skill changes. Today tech applications like digital learning platforms that facilitate different ways of learning like experiential learning, bite-sized learning, and gamification of content have all created better ways of training the workforce. HR tech has helped make both delivery mechanisms and ascertain ROI more efficient.
Rise of data-driven decision making
One of the most pivotal changes in HR tech was undertaken by borrowing the practice of big data analytics and applying it to employee management. And thus the concept of ‘people analytics’ was born and it soon spread across sectors as it enabled HR to make better decisions. All aspects from succession planning to assess employee engagement levels could now be ascertained by analyzing troves of employee data most HR policies end up creating. Digital technology made collecting, storing and assessing such data much easier and effective.
Such changes within the HR tech landscape are still evolving, along with other newer, more nuanced technologies increasingly finding their way in. With the application of AI and machine learning still developing in its suitability, HR tech is soon to leverage these technologies at an even larger scale in the coming times. From an initial skepticism on its effectiveness to now where the market is saturated with such products— all fine-tuned to meet niche demands but are often underutilized due to improper planning—HR tech has come a long way. And for many, the future is an increasingly digital one.
As the HR function gets ready to deliver outcomes in an era that is dominated by employee experience, effective adoption of digital and maturing data science, it is important to also explore how the HR industry will fare in 2019-20. Participate in Alight’s HR Transformation Study 2019 to 20 and assess yourself and see how you fare with your peers in this transformation journey.
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