Technology isn't only a matter of computers and applications but also a rapidly evolving process that has affected every aspect of business, including human resources (HR). Thanks to new developments from the tech sector as well as improvements in existing tech solutions, HR departments around the world can develop faster, easier, and more efficient ways of handling their operations. Let's examine some of the most significant HR tech trends we've seen or may expect to see in the coming year.
What exactly is HR technology?
HR technology refers to any piece of hardware or software that can be used to support HR operations, including:
- Recruitment
- Applicant tracking
- Training
- Onboarding/offboarding
- Retention
- Performance evaluation and management
- Compliance
- Payroll administration
Like most technologies, HR tech solutions evolve to address nascent challenges. For example, the past few years have seen an increase in the number of employees who prefer hybrid or remote work and an attendant rise in employers who offer alternative work models. A variety of software applications have emerged to resolve the challenges faced by deskless workers and to streamline the dispersed workplace.
7 of the top technology trends in HR
Below are seven of the top technology trends in HR. Some have been shaping industries for several years, but others represent or involve new HR technology that has the potential to revolutionize how organizations conduct HR operations.
Tech solutions to improve the employee experience
The employee experience (EX) encompasses everything that an employee undergoes from the time they apply for the job to the day they depart. The HR field, in general, has come to realize the importance of EX not only for finding high-quality talent but also for developing, optimizing, and retaining top performers. The development of tech solutions related to EX should come as no surprise. Below are some of the areas in which tech may enhance the various stages of employment:
- Recruitment: Today's robust applicant tracking systems come equipped with an array of advanced capabilities, such as job posting, interview scheduling, background checking, automated offer letters, and performance prediction. Aside from streamlining HR operations, these features can create a more amenable EX by helping to ensure that promising candidates aren't overlooked by staff or disengaged because of communication delays.
- Onboarding and training: The early stages of employment, when a new hire is acclimating themselves to the environment and culture, are critical for engagement. Often, success comes because of HR's attentiveness to the new hire's needs and personalization of the process to their learning requirements. Onboarding and training applications can enable these outcomes by automating meeting schedules, paperwork distribution, and tracking training progress in conjunction with a true human connection with HR staff.
- Benefits: Employment benefits are among the most important factors contributing to employee satisfaction. New HR technology can quickly and conveniently compare an organization's benefits with another's and calculate approximate costs. With that information, your HR department can more easily identify the benefits that employees want and assess your organization's capacity to provide them.
- Well-being: Technology can also improve the more personal areas of EX, namely mental health and work-life balance. In addition to offerings such as employee assistance programs and mental health services, HR departments are increasingly using digital platforms that help monitor employee well-being by way of pulse surveys and polls. Information gathered this way can be valuable for crafting policies that prioritize happiness and satisfaction while preventing burnout.
"Some [technologies] have been shaping industries for several years, but others represent or involve new HR technology that has the potential to revolutionize how organizations conduct HR operations."
Artificial intelligence for recruitment, engagement, and feedback
In terms of new technology, you'd be hard-pressed to find anything making as many waves as artificial intelligence (AI), a topic that has made headlines since the beginning of 2023. In the HR field, AI has shown terrific promise for use in areas such as:
- Professional development: Through AI, HR departments can gather data on employees' competencies and metrics to help them set personalized goals and direct them to relevant training opportunities.
- Productivity: AI-gathered performance metrics can also be used to measure productivity throughout the organization and identify areas for improvement.
- Employee engagement: Like pulse surveys, AI chat functionality has the potential to help an organization gather qualitative data about EX, which the HR department can use to create a more supportive work environment.
Tech solutions to support alternative work models
Remote work grew in prevalence during the COVID-19 pandemic, and it remains fairly common because of its popularity among employees and the host of benefits it provides to employers. According to an October 2023 Gallup survey, around half of all remote-capable employees in the United States now work in hybrid (partially remote, partially on-site) arrangements, and eight of 10 HR officers from Fortune 500 organizations say they have no plans to decrease their availability of remote work flexibility.
Supporting the ongoing implementation of alternative work models will require investments in both the hardware and the software required to establish smooth-running remote environments. It may also involve incorporating benchmarking tools to better track and measure data points such as productivity and efficiency.
Internal talent marketplaces
Rather than looking outside the organization to fill vacancies, more and more employers are leaning toward internal promotion for higher-level management and supervisory roles. To identify internal talent who meet the criteria for advanced decision-making positions, many companies are relying on internal talent marketplaces — HR platforms that match existing employees with advancement opportunities.
HR decentralization
Decentralized HR means that HR functions are no longer the purview of a single HR department but are instead distributed to separate areas of the organization, such as teams, departments, or units. An example of decentralized HR is a restaurant franchise location, which is responsible for its own recruitment, hiring, and other HR operations.
Technology comes into play because it's a pivotal element in facilitating key information. One of the primary challenges with HR decentralization is that it presents the risk of siloing important data — for example, overall organizational talent needs and individual key performance indicators. With the right tech tools, a company can connect silos so that all the separate components of the organization remain aligned in their HR efforts.
Cloud-based HR systems
Traditional HR systems are on-premises, meaning that they run locally. The organization must house, configure, and maintain servers, and system access is more restricted. A cloud-based HR system requires no physical accommodations for servers, and it more readily supports off-premises access.
The increasing adoption of cloud-based HR systems may be a result of the rising prevalence of remote and hybrid work models. With the cloud, dispersed teams can easily participate in group calls, webinars, and collaborations, which can help improve communication, productivity, and output quality. Cloud HR can also improve onboarding and training by permitting access to key employee materials and providing self-service portals that streamline troubleshooting.
Expanded influence of data-based decision-making
Data-based decision-making has been standard protocol for a while, at least among the big enterprises. Now, smaller organizations have begun to incorporate data analysis into their executive functions to make smarter and more effective decisions. Concerning HR functions, this expansion of data-based decision-making means that businesses with relatively few resources can better identify hiring needs and assess candidate competencies. That, in turn, can help those businesses stay competitive.
The above trends represent just a sliver of current and potential developments in the HR arena. As new technologies enter the discussion, we can expect to see even more trends and greater transformations in HR management.
More tips about human resources management
Much of today's HR technology relates to improving one's existing workforce. With upskilling, for example, organizations have been able to elevate their talent while relying less on new hires.
Some organizations have been reluctant to adopt a dispersed workforce. If your organization is on the fence, consider the benefits and trends concerning the hybrid work model.
HR professionals aren't the only ones using AI to their advantage. Job applicants are also leveraging the technology to write their cover letters.
