Human resource has undergone a massive transformation in the past few years. One of the influential factors for this transformation is the technology. Right from applicant tracking systems to people analytics, human resources has been transformed in ways that were earlier unprecedented…
Who could have thought that companies would invest in people analytics to understand their workforce or artificial intelligence-powered recruitment soft wares would predict the chances of a prospective candidate accepting an offer. Today, however, people analytics is the most sought after skills among HR professionals, according to a 2019 HR skills report.
Now recruitment soft wares (or applicant tracking systems) have become ubiquitous and indispensable for human resources teams. These software aid the teams in streamlining their recruitment process and being more efficient and effective in their approach. According to a report, 98% of fortune 500 companies use recruitment software.
Similarly, employee experience – a crucial area of focus for HR teams – is reliant on the use of technology. Turns out, the use of technology is an essential factor for employees for a better experience. So not only HRM teams need to use technology to improve employee experience, but to make their own processes effective.
Here are a few jarring statistics that show the influence of HR tech in human resources:
1. The market for talent management tools is expected to grow at 13% percent annually.
2. The average HR function uses 11 different systems just for recruiting
3. More than 50% of companies will have implemented HR chatbots by 2022
4. In the next 10 years, 50% of organizations will have HR technology that will give workforce recommendations based on artificial intelligence and machine learning ( source )
5. According to Deloitte report, 61% of companies are modifying jobs to better work with AI & automation (source:)
6. 45% of recruiters think automation will make their job a lot better in the future
7. 58% of hiring managers & recruiters say AI is most helpful in sourcing (source)
8. 72% of HR and business leaders feel technology – automation, AI, people analytics- is an important area of concern ( source)
9. Companies using talent analytics see 82% higher three-year average profit than their counterparts (source)
Influence of technology on human resource management
A basic rule of business is — don’t spend unnecessarily. The claims of explosion of technology will be futile be technology doesn’t offer the benefits organizations expect. Artificial intelligence, machine learning, cloud, data science, blockchain, and mobile applications are changing the way human resources functions.
Artificial Intelligence: Globally companies have invested $40 billion in artificial intelligence in 2016. Of which 10% went into improving operation and increasing engagement.
Artificial intelligence in human resources primarily benefits in three ways:
Recruitment and on-boarding: AI can analyze the existing pool of candidates and identify candidates that are fit for roles as they open up. This saves recruiters time. Similarly, artificial intelligence can screen candidates based on their applications, saving hiring managers a lot of time, which otherwise would have been spent in manually scouring through resumes.
Internal mobility and employee retention: Using personalized feedback and employee recognition systems, human resources teams can gauge the level of employee engagement, and job satisfaction. This information is valuable to organizations and offers several benefits.
AI-powered software can evaluate key indicators for employee success to identify employees who can be promoted. This can drive internal mobility and increase employee retention rates.
Automate administrative tasks: HR professionals are involved in a lot of administrative tasks that are essential for the success of the organization, but can be easily automated. For instance, scheduling interviews, conducting an initial round of interviews, administering benefits, etc. This holds HR professionals from contributing to the organizations in more impactful ways. Once-daily administrative tasks are off the table, HR departments can contribute as a strategic business partner within their organization.
Blockchain brings characteristics qualities with itself to create a trust-less environment, which would be important in the future. The technology can be specifically used for building a pool of digital CVs and make payments more convenient.
The Gig Economy is the new normal. According to a report, the number of gig economy workers will increase to 43% in 2020. Blockchain enables employers to make payments instantly as soon as work is delivered with smart contracts.
Employee verification is more robust as using blockchain eliminates the possibility of falsifying documents or any record for that matter. HR professionals can verify a candidate’s employment record without a slightest of doubt.
Blockchain further streamlines candidate identity verification. In fact, nearly 51% of blockchain adopters use technology for identity verification. Candidates can encrypt their educational records, employment records, and all relevant documents, which will make identity verification easier for employers and free up the time HR professionals invest in doing it.
People analytics is fairly new in HR management. In the last five years, adoption of analytics has grown exponentially and for nearly 71% of employers it is a high priority, according to LinkedIn 2019 report (source). It marks the shift from strategic to data-driven decision making in human resources management. The primary use of analytics is to solve business problems; people analytics does the same for human resources.
Using tools, you can easily see the employee turnover rate. However, if you were to understand the cause of the high employee turnover rate, you would need to combine data from employee experience surveys and exit interviews to learn the real reason behind it. Similarly, if we want to check how the employee turnover rate has affected finance, it will come down to data available from employee performance management and employee experience data.
People analytics helps the human resources department find answers to these questions and uncover insights that enable the department to improve its processes. In a nutshell, people analytics is the most versatile tool for employers to learn and solve their employee-related challenges.
Emerging technologies – artificial intelligence, analytics, blockchain, and more – are transforming human resources management. It’s imperative for HR leaders to see how these technologies can contribute to their growth.