The HR industry has undergone radical changes to adapt to the new challenges of the labor market.
The process of adaptation, commonly referred to as digital transformation, includes introducing advanced technology into various HR-related business functions that were previously performed manually or with more straightforward software solutions.
The recent PwC study, the HR Tech Survey 2022, largely confirmed HR leaders’ strong interest in data analytics and cloud-based HR modernization while pointing to other key challenges awaiting organizations involved in digital transformation. These include recruiting, staff development and development, talent retention, and the rapid proliferation of remote or hybrid work.
Remote working, opened up by the proliferation of tech solutions such as virtual workspaces and collaboration tools, serves both the need for cost containment and the skills mentioned above shortage, which are causing many organizations to turn their eyes to labor markets beyond the horizon.
With that in mind, what role can technology play in addressing these challenges? Let’s answer that question by exploring current HR digital transformation trends and potential future developments.
An overview of HR digital transformation trends
Digital HR transformation is a holistic phenomenon that includes several different technologies and a broader range of uses and applications. From expediting administrative processes to assessing employee performance, from streamlining the hiring process to delivering your workforce’s services, digital HR solutions can facilitate virtually any HR-related business function.
Indeed, investment in HR software development and digital transformation, in general, has grown steadily in recent years and is expected to continue to grow, as Verified Market Research 2021 Global HR Software Market Size And Forecast shows.
The widespread adoption of HR software applications for smoother business process management is a well-established fact, but the introduction of innovative features based on new technologies will add momentum to their adoption as it allows enterprises to achieve three critical goals:
- Gain valuable insights to improve decision-making
- Automate the most repetitive and tedious processes
- Improve the employee experience in the workplace
Here are the main digital transformation trends in HR:
- Supplementing Intuition with Data Analytics
Anyone who makes decisions and is constantly faced with difficult choices would give their right hand to get a complete and accurate overview of the scenario their company is running.
No one can count on magic and crystal balls, but data analytics has proven reliable substitutes. So much so that today most HRMS and other HR-related software products come to market with built-in analytics features or can be easily integrated with dedicated data analytics solutions to help managers replace simple assumptions with data-driven decision making. Such capabilities can be used in a multitude of HR applications, such as:
- The Human Dimension of Artificial Intelligence
By now, we have mentioned the role of machine learning algorithms in the digital transformation of HR, particularly in enabling analytic systems.
These AI areas are technically related to and use machine learning algorithms, as they aim to teach machines to develop such skills through experience (e.g., by training systems on millions of pictures or texts so that they begin to recognize repetitive features). These capabilities can be applied to human resource management in a variety of ways, including:
- Using image and speech analysis during job interviews to identify candidate behaviors and assess attitudes.
- Identifying signs of harassment, stress, and attrition among employees by scanning chats, emails, or comments.
- Using NLP in chatbots and virtual assistants on employee portals provides HR services 24/7.
- Workforce Management in the Cloud
The last major digital transformation trend worth considering is the continued shift from in-house HR software solutions to a cloud-based SaaS delivery model. The software is centrally hosted and delivered to licensed customers over the Internet.
Both on-premises and cloud-based applications have their pros and cons. For example, the former model often involves customized solutions created from scratch and fully customized to specific business requirements. Nevertheless, the success of cloud technologies is based on some relevant implementation factors:
- SaaS software provides lower initial costs than in-house software requiring appropriate hardware, setup, and implementation.
- The implementation procedure is relatively quick because the service is already available through the cloud.
- SaaS providers usually offer contracts that include support and maintenance services and disaster recovery or any other failures.
- Cloud solutions are easily scalable in storage and processing capabilities because they can count on virtually unlimited external IT resources.
In addition, cloud-based HR digital transformation positively impacts productivity, data security, and employee experience, as shown in the PwC mentioned above report.
Emerging HR technologies can help your workplace thrive.
If you need help navigating the ever-evolving world of HR technology, our experts are here to evaluate your situation and find the right solution.