What is HR tech? Why is HR tech important? An overview

Written by
Changeboard Team

06 Feb 2020

06 Feb 2020 • by Changeboard Team

What is HR tech?

HR tech stands for Human Resources technology. It’s an umbrella term for the software and hardware which enables automation in HR.

Why is HR tech important?

Technology is disrupting our lives. Be it the way we work, relax, travel, or manage our money, new technologies have profoundly changed the way we move through the world on a day-to-day basis.

A business is comprised of its people, which is why the HR function is so important. Talent acquisition, employee payroll and compensation, HR analytics... every area of the HR function is touched by automation and will become increasingly reliant on it. Leaders must consider how to navigate organisations through the disruption caused by automation in general and HR tech in particular.

Once thought, an idea cannot be unthought. HR tech is here to stay - and organisations can use it as a tool for success and progress in a way that can be well-received by employees.

What effect is digital disruption having on your business?

With so much noise out there, it’s hard to pick through the scaremongering and prognostications to find out what you need to know.

Getting your digital solutions right has never been more important - especially when it comes to managing your people. Effective HR tech can be the difference between an engaged or a disaffected workforce. Managing the move towards new tech is just as important.

As business looks at new and innovative ways of solving problems through digital, an integral part of your leadership role is making sure your employees are along for the ride.

HR tech and people analytics

Gaining a better understanding of the performance of your employees is one of the foundation stones of your business’s future. As platforms become more sophisticated, leaders need a firm grasp on precisely what it is they want to measure.

Watch free HR webinar - how to make an impact with analytics.

Having clean data and reporting will allow will help you address problems in your business that can lead to employee dissatisfaction.

Potential issues include:

The debate: While there are clear benefits to using people analytics to better understand the makeup of your workforce, it does raise some questions.

Where does the data stop? Take the example of wearable tech. Is it right for an employer to provide technology that allows them access to their employees’ health data? Yes, it allows you to tailor your health insurance policies for specific needs, but research suggests that employees don’t trust their employers to use the data in a way that benefits them.

What about data protection? Following the Facebook breach and Cambridge Analytica scandal, society is far more aware of improper use of information.

A business must make a clear case for why data is being collected. It must then protect that data unconditionally, for fear of prosecution, and disillusionment within the workforce.

HR tech and learning and development

Periods of digital disruption present your employees with both challenges and opportunities. The UK is currently experiencing a shortfall in digital skills (which could cost the economy over £140bn per annum).

Lifelong learning and HR tech go hand-in-hand. Giving your employees the chance to learn new skills in light of these changes requires a commitment to training at all levels of your organisation. Effective L&D can also help address wider societal issues, such as social mobility, inclusion and creating a more diverse workforce.

A commitment to L&D in the digital age is also integral for senior leadership teams. It’s no longer acceptable to palm new tech off onto digitally literate employees. All senior members of staff must include new tech skills in their learning agenda.

Having a digitally dexterous board will be a true competitive advantage in years to come

HR tech and managing people

According to research by YouGov, just 6% of employees now work the traditional hours of nine to five, while government figures show the number of self-employed people rose from 3.3 million (12% of the workforce) in 2001 to 4.93 million (15.1% of the workforce).

Technology allows us to work whenever and wherever we want. This raises several questions about how you can effectively manage your employees, and also engage contingent workers for project-based work.

You will need to establish effective policy on remote working, which both balances your employee’s autonomy and wellbeing, and performance for the business.

HR tech is making project management a far more valuable skill. By 2025, it is estimated senior leaders will spend 60% of their time selecting and driving projects. You will need your project managers to be agile, and comfortable engaging with contingent workers. A good understanding of the realities of ‘gig’ workers and the economy, and how to engage them through preferred platforms is crucial. Articulating your business’s purpose to maintain a healthy culture for both contingent and salaried workers is also important.

The debate: As we start working remotely, leaders must consider the systems they need in place to keep in touch with their employees. One common answer are digital collaboration platforms such as Slack, Facebook at Work or Yammer.

This runs the risk of creating a ‘digital panopticon’ within your business. Employees feel like they’re constantly been spied upon, creating a lack of trust within the team. It can also add to the ‘always-on’ culture that tech has facilitated. We already check our emails outside of working hours, what’s to stop us from posting on Slack when we’re supposed to be relaxing?

And then there’s the productivity question. Are HR tech-friendly platforms like Slack and Yammer actually helping us communicate more effectively? Or is it another distracting influence, that allows us to pretend to be working when we’re actually procrastinating from important tasks?

HR tech, automation and AI in HR

It’s hard to know what the definitive opinion on automation and AI should be. Depending on who you listen to, AI could wipe out up to 40% of jobs in the next 15 years, or it will create millions more jobs than it will destroy.

Machine learning might help us eliminate unconscious biases in our recruitment processes but can also further entrench discriminatory practices. It’s hard to keep up.

What does a leader need to know about AI in HR? While you may not completely understand the processes of an algorithm, a leader must be iron clad on their reasons for implementing the technology, and what the possible effects are for your business and your employees.

Implementing automation and AI in your business

Research conducted by Capita Group has found that both and employers and employees are aware of the need to address disruptive tech. Some 72% of business leaders see the transition to a ‘hybrid workforce’ (a workforce that coexists alongside automation and AI) as the most important challenge facing business in the next five years. More than half of employees surveyed said they would leave their organisations if the move was not managed well. Creating an environment where technology works for all is of the utmost importance.

From a commercial perspective, leaders must ask, is automation positively effecting our productivity and bottom line. Particularly if it is impacting on customer experience. From an employee experience angle, leaders must ask how they can leverage the change brought by AI to create new learning opportunities for their staff.

The impact on HR tech on the HR function

How do these technologies specifically change the HR function? As we touched on earlier, as technologies around people analytics develop, HR’s role will increasingly focus on how to design a workplace that coexists with new tech.

In the words of CIPD CEO Peter Cheese: “We must design the future around people, creating worthwhile jobs alongside automation, ensuring data is used transparently and ethically, bringing people with us through training and development.”

HR in tech and digital innovation

New technology has allowed a number of businesses to think about their proposition in new and exciting ways. Rather than it just be about reacting to how technology might change our day-to-day, leaders need to be able to think like entrepreneurs, and expose possible gaps in the market that periods of disruption can highlight.

Approaching innovation with purpose

Underlying all innovation is a simple question: Why? A lot of the time, big businesses can fall into the trap of not articulating the reasons behind change to their wider employee base. Making sure everyone at every level is aware of your purpose is integral to any transformation.

For Avon CEO Jan Zijderveld, this meant reminding his employees about who their real “boss” is. Since taking over the iconic makeup brand in 2018, Zijderveld has taken the business online, through a new e-brochure, with a view to providing better customer service. He told Changeboard, “we’ve become obsessed with solving consumer and customer problems. One of the things I hope you would find at Avon is that there’s a new boss and that isn’t me.”

Approaching innovation with agility

Once the purpose is aligned, your business will then need to move quickly. Effective innovations are based on teams that can accelerate, either to beat a rival to market, or to create a new product. This is often seen in smaller businesses, which due to a lack of red tape, work flexibly and iteratively, to bring a new idea to market in a short time frame.

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