For years, HR technology was used to support and manage mundane back office paper processes and to ensure HR regulations and payroll laws were being met. More recently these platforms have shifted focus to better support talent acquisition and retention. A new generation of employees is entering the workforce with well-defined expectations of how they will interact with employers. HR technology is leading digital transformation in creating a new onboarding culture along with new ways to attract and engage talent.
How is this happening? Innovations in automation technology (triggered in large part by SAP’s acquisition of SuccessFactors in late 2011, according to Josh Bersin of Bersin by Deloitte) are creating dependency that permeates touchpoints between company and employee. The digital expectations of employees and talent have led to an unprecedented proliferation of software – HR applications aren’t just a system of record, but rather a driver of digital transformation and strategic opportunity within organizations. Consulting firm PwC suggests digital transformation of HR plays a bigger role today within organizations and “believes the responsibility for human capital extends beyond the HR department.”
HR software, largely cloud-based, is now a sprawling environment which includes systems of record for HR, ranging from talent acquisition to onboarding to learning and development and leadership training. Software system after software system is integrated, packaged, stacked, and connected into the complex ecosystem now necessary to manage the workforce and interaction with the marketplace. At the enterprise level, these systems are dominated by SAP, Oracle, and Workday.
The reality of today’s software applications, especially large packaged systems, is that implementations are complex, time and resource intensive, and require frequent upgrades. That means automation is critical to unlocking the benefits of these HR apps.
This, coupled with the need to keep pace with technology change and an evolving HR landscape, is putting great pressure on the end-to-end business processes a company relies on. Critical workflows around payroll, hiring, org charts, data entry and more, must be executed as designed.
Talent is driving HR transformation
As the employment marketplace has tightened in the past several years (the latest figures have unemployment at 4.1%), businesses are scrambling for top talent, making HR technology a critically important tool for those who want to remain competitive. In 2015 and 2016 alone, $4.2 billion was invested in HR technology, with about 25% of that capital poured into talent acquisition solutions. The rest is being used to innovate the way companies retain talent.
HR technology vendors are responding with interfaces that start with job posting, onboarding, and payroll, and extend through recognition programs, learning, and internal mobility. A Google search of employee engagement yields hundreds of HR technology companies and software products.
The bar is high and pressure is on companies to keep pace – businesses are turning to HR technology that handles these employee lifecycle issues to solve talent acquisition, retention, and skills needs. The answer has been to deploy a sprawling mix of on-premise and cloud-based solutions that harness data to meet talent challenges. And because these HR ecosystems are so prevalent through mid-sized and enterprise-level businesses, companies are using this data to make objective business decisions, manage the workforce, drive employee engagement, and to increase productivity and interaction.
Pace of change means frequent software changes
The challenge of a business’ dependency on HR technology is that there is an increased state of change, largely driven by system integrations, software updates (especially with cloud-based systems), and new solutions needed to find, hire, manage and retain talent.
Article Continues Below
3 Strategies for Building a Successful Company Culture
Companies are constantly changing technology to meet the needs of customers and the way employees interact with customers. It seems everyone has increased expectations of how technology can and should change the way we do things (e.g. Amazon’s disruption in our shopping habits, Uber and Lyft changing the way we travel, Zillow providing homebuyers with a new way to look for real estate, etc.). We all want information and technology to improve our daily experiences. When it comes to human capital management, technology can guide and shape the employee experience of hiring, onboarding, training, professional development, and accessing benefits and employment records and forms.
The proliferation of a quickly evolving set of technologies creates a new set of problems. End-to-end business processes must work the way they were intended without causing business disruption. They also must align with employee and customer expectations. As a result, companies are looking for a new way to handle the heavy lifting – replacing time-consuming documentation, testing, compliance and repetitive mundane activities with automation.
Focus on speed and business process quality
Implementing, upgrading, consolidating and updating these applications is risky business – and the projects never end. Documenting and testing critical business processes requires a great deal of time and effort during every project. Think of the cost savings alone that could be achieved by cutting testing time by 40% for every major change or project. How much easier would it be if you could automatically generate visual process diagrams, complete documentation, and materials for compliance and training? Automation can deliver these benefits in a fraction of the time we’re used to with manual or legacy approaches. Consider the impact of faster testing and better automation coverage. How could that speed projects, reduce production downtime, and give executives peace of mind knowing a multi-million-dollar technology package is going to work the way it’s expected?
With end-to-end automation, companies can be sure HR processes operate without disruption. This is true even when it comes to frequent changes in intricate approval chains, tax calculations, employee benefits, withholding classes, payroll and more. And, because these business processes are tested and can easily generate documentation, companies can verify they are meeting compliance requirements.
For example, accurate, effective payroll operations depend on end-to-end business processes executed across HR apps, and the other applications in a company’s landscape. Today’s technology can automatically capture these as-is business processes to provide visuals and documentation for insight and improvement. Captured processes are used to create an automated regression test library that can be continuously run to validate that mission-critical end-to-end processes are functioning as designed. This eliminates delays and mitigates the risks that come with packaged applications the business depends on.
As Global 5000 companies set out to achieve successful digital transformations, the transformation of human capital management plays a crucial role. A recent article in Forbes notes: “There are a number of transformations HR needs to undertake — from streamlining processes to becoming a strategic partner to the business. To act as a strategic advisor to the business is key, and modern HR technologies and practices will pave the way to elevating HR to this role.” With that, a fast, reliable, and effective HCM strategy relies on the adoption of automation.