We are now witnessing the digital revolution in HR as companies seek automation, integration, and end-to-end solutions to remain competitive. Future product offerings and current products will continue to move into integration. Many tasks are convergent and automated across the board. This will change not only the way departments are managed but also the business landscape, including how companies recruit, onboard, and retain global talent.
The changing world of HR is a result of many factors – the introduction of remote work, increased competition for talent from abroad and higher employee expectations. The rapid growth of the once-overlooked HR Tech industry has resulted in a resurgence of this once tame and unexplored sector.
Companies have been adopting HR technology for decades by starting at their “core”, which has always been the payroll system, HRMS, and foundational infrastructure – HCM. These core systems of records are architectural and provide the fundamental structure for billions of dollars, which are spent on employee applications, systems and tools. Although core HCM systems are essential to running a company, they no longer represent the centre of gravity – Employee Experience and Talent Intelligence Systems come into first place.
Companies are currently looking for solutions that seamlessly integrate with HCM systems and allow employees to access and manage their data, for smooth integration between payroll and recruitment, which becomes real due to a change from traditional human involvement to automation. Likewise, as the market demands more robust functionality, HRIS is also becoming more integrated with other platforms.
Let’s have a quick glance at the historic path of HR systems. That will give us a clue why we are now witnessing the core changes in this area.
In the 1970s and 1980s ERP (or Enterprise Resource Planning) was the most important innovation in the information technology. It was an attempt to combine financials, manufacturing, supply chain and other back-office systems to create a single, end-to-end solution that could manage products, suppliers and vendors as well as financials and results. These systems are now widely sold by Oracle, Workday, SAP, etc. They have become the “financial backbone” of companies.
This worked – in those days, when most businesses acted in an industrial model. Everyone needed to know the number of widgets used in each assembly, their cost and who supplied them.
Later software vendors attempted to apply this model for HR because ERPs simply weren’t managing HR and employees well – so they created a market for HCM.
HCM started out as a payroll system, employee records and job architecture. But considering that the original ERP model wasn’t designed for people, even though ERP vendors tried, HCM also appeared not enough. A person isn’t a widget, and a job is not a product. Therefore, companies couldn’t simply put a cost on them. This is why the ERP model for HCM didn’t work. People change constantly, so it was necessary for the business to have a system that could manage their skills, career paths, succession plans, as well as all other non-linear investments in them.
What did the next step look like? Buyers and vendors began to layer value-added tools on top. Learning management systems and applicant tracking systems, skills inference tools and employee engagement tools were all added to the mix. But as they didn’t fit in the ERP, with time each of them became independent and separate systems of record. For example, Workday purchased VNDLY to help customers address managing of contingent and gig workforce. 1100 customers of this company are using its skills cloud. In 2021 Workday also acquired Peakon as part of the company’s employer experience strategy. SuccessFactors HXM is now embracing a new People Model, which comprises mood, learning styles, and other personal growth characteristics. An additional example is Oracle with its HCM Cloud, which is based on skills.
It was not enough, of course. The need and desire for a unified platform started a drive for the evolution of the EOR (employer of record) industry and its technology. Companies strive to be able to hire from anywhere in the world, quickly and legally. They also want to seamlessly meet the needs of customers or stakeholders. All this while offering a positive employee experience!
SO, EOR is developing and changing. What’s the next stage of its evolution? Analytics, AI, integration with HRIS (human resources information system) and HRM solutions, and an employee-first mindset – all these will be the following requirement of businesses. These are the keys to effective workforce management.
But, of course, the next big leap in HR Technology is Intelligent Automation.
This technology is already changing the industry and the HR experience. It has already revolutionized the way we travel, manage taxes, and create meaningful connections in our daily lives. We are now on the brink of major, permanent changes in how we live and work, as well as the solutions that we offer to manage our workforce.
As HR technology integrates more, companies may seek out automation capabilities. Those who are successful in developing technology for this sector will be able to make HR professionals more efficient by automating their workloads and improving employee experience.
It’s already clear that companies, which were most successful with large HR Tech projects, put their employees in the first place and technology in the second. They defined what their management and employee needs were, as well as their new talent practices, cultural goals, and data they wanted to collect. They then sat down and built the new system – bottom-up or top-down.
As a conclusion, here are several tips on how to implement HR technology to improve the future of your workforce’s performance.
The first and most important – remember that every employee is a human being. You need to use technology to expand the talent pool and scale remote teams. As you recruit and retain global employees, it is essential to provide a human, personal and connected experience.
The second – protecting sensitive company and employee data is vital. It is crucial to ensure that your HR technology platform is roofed by cybersecurity solutions. Global HR teams must focus their risk management strategy on protecting their workforce and enforcing high standards of data security.
One more – consider cultural and language issues when onboarding global talent. Your platforms need to be integrated with the existing technology and provide language capabilities for any country, in which you have employees.
If you’re looking for new ideas, fresh perspectives and insights on the future of work, then you’ll want to attend HR Vision Events.
