It’s unfortunate to see so many small companies still sticking with Excel spreadsheets and other outdated solutions to execute HR functions. Don’t get me wrong; many traditional solutions in the market are still useful in the modern world, but would you buy a 3rd or 4th generation iPhone in 2022? Probably not. Not only is it an old technology, but it lacks most of the features you can find in modern iPhones and newer smartphones.
Modern organizations need a more robust data management and reporting system to carry out their daily HR duties, such as monitoring and evaluating employee performance, managing recruitment and training, and handling disciplinary actions, among others. Therefore, they need to get their hands on the latest HR software and technologies that can simplify, streamline, and automate their tasks and processes.
What is HR Technology?
HR technology, often referred to as HR tech or human resources technology, is a broad term for hardware and software used to digitize HR documents, paperwork, and files along with key HR processes, such as employee payroll, talent acquisition, etc., performance management. Depending on your IT infrastructure and capabilities, it can also automate many HR functions, which can be useful for businesses of all scales and sizes.
Types of HR Technology Systems
If you’re new to HR technologies, you might have come across some confusing terms, such as HRIS, HCM, and HRMS. These are merely acronyms for the three major types of HR technologies in the market. Let’s learn more about them in detail:
HRIS (Human Resource Information System)
This software is designed for HR professionals to help manage employees, workplace policies, data, and processes. These systems usually cater to local businesses within traditional work environments. Popular uses include:
- Attendance management
HCM (Human Capital Management)
HCM software solutions aren’t too different from HRIS. The only difference is that these systems are specifically designed to transform talent management with integrated functions, including:
- Recruiting and training
- Performance analytics
HRMS (Human Resource Management System)
HRMS solutions typically blend most of the core functions of HRIS and HCM into an all-in-one solution. Most products in the market contain features, including (but not limited to):
- Payroll and financial data management
- Employee lifecycle management
- Compliance management
- Automated attendance management
- Automated benefits administration
Benefits of Innovative HR Technologies for Companies
Now that you’re up to speed with HR technology and the three main types, here’s how innovative HR technologies can help companies in the digital age:
More Efficient and Targeted Recruitment Drives
Finding and retaining talent in the New Normal is becoming extremely frustrating due to labor shortages and the evolving workplace environment. HR technology can help simplify, speed up, and improve hiring decisions as many modern solutions are equipped with tracking systems and resume filters that can help streamline interviews, rank candidates as per your skill and/or personality requirements, and other relevant factors. In short, it can help you hire the right people for the position.
Automated Payroll Processes
No employee likes delays in receiving their paychecks. Yet, many small businesses with manual HR processes or outdated systems can experience different challenges when managing the payroll process, such as errors, downtimes, and manual calculations (wage, overtime, travel, benefits, etc.). With modern solutions, HR teams can automate their payroll functions and minimize delays.
Real-Time Employee Data Analytics
Using real-time employee data analytics, HR teams can monitor employee performance, attendance, task completion, and other key indicators that contribute to the overall success of your organization. With HR technology, they can figure out what haltering progress and adjust their operational planning and policies accordingly, thus, reducing hiring expenditure and turnover.
Less Data-Entry Errors
With paper-based or multiple systems, your HR teams are more prone to making data-entry errors, which can lead to time wastage and unnecessary costs. By opting for innovative HR technology systems, you can minimize manual processes and automate several redundant tasks by integrating and centralizing information. This can help simplify payroll, reporting, and performance management and improve operational efficiency in the process.
More Time for Other Activities
Let’s face it. It takes significantly longer to complete HR tasks without using HR software, especially when working in a large organization with multiple departments and systems. Time equates to money, and any time spent on fixing errors or redundant/repetitive manual processes can be used for other business activities, such as HR strategy development, improving administrative skills, and learning new software.
Real-Time Feedback Generation
Employee feedback is gradually becoming more important as the modern workforce continues to evolve. HR teams need to know what makes the employees within their organization happy and satisfied, so they can cater to their needs more effectively. With an automated HR system, employees can give real-time feedback to the HR department instead of waiting for quarterly, semi-annual, and annual meetings.
By adopting the latest software solutions and practices in the market, you can automate several key HR functions and boost operational efficiency at your workplace. Many modern solutions are cloud-based, meaning you don’t have to spend heavily on upgrading your IT infrastructure with new or advanced hardware, although that will help further fuel your transformation initiatives.