What Is HR Technology?

HR technology (aka Human Resources Technology) is the umbrella term for software and associated hardware used for the automation of human resources functions in organizations.

The most common type of system used is the HRMS (Human Resource Management System) or HRIS (Human Resources Information System). These are different acronyms for the same software and fulfill the same purpose.

The current state of HR technology in India

HR technology has shown a huge surge in adoption in India in recent years. There is a rising trend in investment in start-ups that focus on HR solutions. In 2018, the total invested in HR solutions startups was $55 million. Within a year, it rose to a total of $116 million. This steep growth in investment shows how important HR technologies are.

Most common types of HR technologies

Predictive analysis– Predictive analytics is the branch of advanced analytics that is used to make predictions about unknown future events. Predictive analytics uses many techniques from data mining, statistics, modeling, machine learning, and artificial intelligence to analyze current data to make predictions.

AI (Artificial Intelligence)- AI is using computers to create automation of tedious, time-consuming tasks, augmenting human capabilities, and amplifying human functions. Moreover, AI is useful in processes such as recruitment, learning and development, performance management, risk management, etc.

Cognitive Technologies– Cognitive technologies are products of the field of artificial intelligence. They can perform tasks that only humans used to be able to do. Examples of cognitive technologies include computer vision, machine learning, natural language processing, speech recognition, and robotics.

Adoption of HR technologies in industries

The highest level of adoption of HR technologies has been, unsurprisingly, in IT and Communications. The other three top industries that employ HR technologies are Manufacturing, Engineering, and lastly, Banking.

The adoption of these technologies has risen from 2018 to 2019, with the highest amount of automation present in HR operations. Likewise, Performance management and communication also need a fair amount of automation in their respective processes. Performance management is an outlier, seeing as how the process has shifted from a singular outcome to a more all-around way of assessing employees.

Overall, companies are looking to invest more in HR technology and automation of their key processes. It will help companies to plan work with better efficiency and also reduce costs across the board.

Reasons for switching to HR technologies

There are a variety of reasons for switching to HR technologies given by companies. The most common reason to switch is to reduce costs. Other main reasons include empowering employees and managers. To enable managers to self-manage people workflows and processes, and to increase the efficiency of  HR execution. These three reasons make up the core reasons to switch to HR technology.

Ways to measure efficiency after implementation of HR technologies

Finally, the most common question that comes up is that after we have employed all these expensive technologies is how do we judge whether they have been effective or not.

The most common way to judge their effectiveness are-

Barriers to implementation

Limited Budgets– Money is a clear barrier to the implementation of such technologies, especially if the company has no concrete way to measure the prospective returns provided by such technologies.

Ability to measure return on investments– As mentioned above, ROI is a very difficult thing to measure especially in cases where there are no immediate or significant results. Often the results are qualitative and only show themselves through things like employee and customer feedback etc.

Lack of skills to implement new technologies– Lots of old companies rely heavily on legacy systems. As these systems have been around for a long time, replacing them comes at a cost. Many employees, especially those who have been with the company for a long time, will find using the newly implemented systems a chore. People oppose things that bring them out of their comfort zone.

Opposition from certain employees– All the rules and methods of usage are predefined in the HRMS system. This is a very big advantage of it. There is small room flexibility. Employees, especially those in the mid-level, may be opposed to this as it brings in transparency. It also takes away the option of manipulation.