What is HR tech?

HR tech, meaning human resources technology, is an umbrella term for the hardware and software used to digitize, automate, and simplify essential HR functions, such as:

• Talent acquisition and management;
• Reporting, analytics, and research;
• Payroll and vacation processing;
• Employee development and performance reviews;
• Regulatory and company policy compliance;
• Benefits management.

This technology can offer company-wide benefits, extending beyond your HR department to new recruits, established employees, management, owners, investors, clients, and customers.

Related: HR Responsibilities—What to Expect?

Why is HR tech important?

The evolution of technology aims to make life easier and better—from self-checkouts and tap payments to online banking and e-transfers. Technological advancements in the human resources industry can significantly improve how you do business. HR tech can help attract, hire, maintain, and retain employees, optimize workforce management, and support company administration. Implementing digital transformation in your organization can enable your workforce to gather, analyze, and deliver accurate data and communicate with employees easily and more efficiently. For example, automating specific tasks can reduce HR administrative workloads, allowing more time to focus on managing the department.

Many HR tech resources include decision-making tools to help make more productive HR-related decisions. A strong relationship between technology and HR offers the following advantages:

• Strategic alignment with your business objectives
• Business intelligence with accurate, relevant data reports
• Efficiency and effectiveness by reducing labour, lead times, service levels, and costs
• Fewer errors and less liability
• One central location to store and access employee data
• Increased company ROI
• Enhanced employee experience

Outdated or lack of HR tech can easily frustrate your employees. For example, an employee submits a time off request months in advance, only to learn it went missing and wasn’t approved or is “on hold,” waiting for HR to update simple information. Allowing your employees instant, transparent access to digital features like time off requests can provide a better experience and increase engagement and retention rates.

Read more: Creating an Effective Human Resources Plan

Applications and functions of HR tech

HR technology can positively transform your business. Below is a list of HR tech features and capabilities:

Payroll management

There’s typically a significant margin for error when managing payroll aspects manually, like salaries, overtime, commissions, bonuses, tax and benefit deductions, and expense reimbursements. Payroll management systems can remarkably reduce the risk of mistakes, ensure accuracy, and instill confidence in your HR team and employees by digitizing and automating functions, including:

• Payment and deduction calculations;
• Time and attendance tracking;
• Earnings, including bonuses, commissions, and profit shares;
• Leave management like vacation time and sick leave;
• Pay stub and T4 generation.

Performance management

Performance management software can monitor, measure, and maintain the long-term health of your workforce. Your HR team is key to preparing supervisors and managers for accurate employee performance evaluations by supplying them with productivity statistics and evidence. This data can also provide a snapshot of:

• Employee strengths and weaknesses;
• Training needs and goals;
• Promotions and leadership potential.

Talent management

Job applicants and existing employees typically have extensive data to create, store, and protect. Self-service HR tech empowers employees to manage data themselves, promoting accuracy and increased engagement. HR and recruiters can use talent management software to simplify employee data in the following areas:

• Recruitment screening
• Onboarding
• Workforce planning
• Succession planning
• Employee development

Benefits management

Part of your employee’s compensation package is their benefits. Benefits management software can eliminate manual processes from your HR department, and, with limitations, your employees can easily manage and keep track of:

• Health insurance;
• PTO (paid time off);
• Vacations;
• Company pension;
• Life insurance;
• Parental leave;
• Short- and long-term disability.

Expense management

Besides paying wages, HR departments must often track employee expenses and reimburse them through payroll. Having to verify, track, and record these costs can be tedious and prone to errors. Expense management software can mitigate the risk of errors and automate processes such as:

• Maintaining records;
• Reporting;
• Managing all company credit cards using one software;
• Timely reimbursement.

Learning management

Learning management software (LMS) is an HR tech tool focused on developing your workforce by improving weaknesses. LMS offers easily accessible, convenient, and intuitive options to reskill, upskill, and train your employees. LMS can also:

• Reduce training costs;
• Boost employee retention;
• Strengthen regulatory and company compliance.

Employee engagement

Most HR software focuses on accuracy, efficiency, and productivity. Employee engagement software empowers HR departments to create and maintain a strong company culture centred around communication. This technology can interact with employees, collect feedback, and boost workplace satisfaction and morale. Features can range from providing easy-to-use interfaces for employees to ask questions to issuing employee engagement surveys. It can also help you:

• Identify reasons for recurring issues like attrition;
• Strengthen your brand and culture;
• Increase engagement through feedback and acknowledgement;
• Make informed decisions regarding workforce needs;
• Encourage employees to voice concerns and share their opinions.

Related: 16 Steps to Effective Virtual Onboarding (with Checklist and Sample Schedule)

HR tech trends

The emergence of artificial intelligence (AI), machine learning, and cloud computing has businesses metamorphosing globally. These tech trends are incorporated into some of the available HR software, allowing you to create a productive, engaged, and sustainable work environment for your organization.

Read more: How to Create Your HR Strategies From Scratch

How does HR tech benefit human resources?

The right software can be invaluable for your HR department, from saving time by using automation to supporting employees with better communication options. Transitioning to HR tech can help your HR department see the following benefits:

Stronger recruitment

Candidate tracking software eliminates manually vetting applications and candidate correspondence, allowing HR to focus on the perfect job fit instead. HR tech can organize, schedule, and assess interviews, and some offer sourcing tools that target specific skills and applicants by scanning resumes and CVs, excluding candidates that don’t fit the criteria.

Fewer errors

The less you enter data into a program, the fewer opportunities you have to make mistakes. With HR tech, you can program systems to perform automated tasks in a consistent, repeatable manner, ensuring the same completion of tasks every time. This feature can reduce the risk of error caused by variations in employee performance and ensure your HR operations remain predictable and reliable. Some platforms can even help you find and rectify previous manual errors.

Real-time analytics

HR can identify problems and devise proactive solutions sooner with comprehensive reporting tools combing through real-time data. Real-time analytics can offer valuable insight into:

• Workplace trends;
• Hiring;
• Productivity;
• Turnover;
• Compliance.

Streamlined onboarding

New hires are often busy filling out paperwork rather than training and learning their position. With HR tech, the software creates an onboarding template and empowers newly hired employees to submit data from their mobile devices before their first day of work.

Improved scheduling and tracking

Time management software can help prevent shifts that violate predictive scheduling laws and overlapping meetings. It can also enable companies to perform with maximum productivity by automating aligned schedules company-wide.

Employee data security

HR professionals have many duties, from analyst, advisor, and researcher to educator, moderator, and employee data security. HR tech can compile and store employee data in one central place using login and password protection. Your employees and HR team won’t need to manoeuvre through multiple systems to re-enter the same data. This technology also eliminates unencrypted files and data submitted via paper, reducing the chances of lost or stolen information.

Intuitive talent management

Many HR employees and company executives agree that HR tech is invaluable for retaining and engaging employees. An employee-centric design can boost overall job satisfaction, productivity, and workflow. Effective technology can enable your HR department to create development and engagement programs that help your employees:

• Adapt and grow;
• Address concerns;
• Upskill and reskill;
• Communicate and offer feedback;
• Stay loyal to your company.

Reduced time spent on tedious tasks

Until the progression of technology, many HR responsibilities, such as calculating payroll or endless spreadsheet entries, have been intensive and time-consuming, requiring meticulous attention. Because HR software automates these tedious tasks, your HR team can focus on improving your employee experience and strategies for growing your business.