The world of work is changing rapidly, and businesses need to keep up with the latest employment trends to attract and retain top talent. Since the pandemic began, a record-high number of workers have quit their jobs because of:
- Inflexible remote-work policies,
- Psychological and physical burnout,
- Limited career improvement opportunities (Figure 1).
Figure 1. Monthly quits in the United States have sharply increased after the pandemic. Source: Wikipedia
This is now commonly referred to as the Great Resignation, and nearly 75% of CEOs see excessive turnover as their greatest short-term threat since it is difficult to recruit and retain highly skilled employees.1
Organizations can benefit from emerging technologies to stay ahead of the curve in employee experience. In this article, we’ll explore 6 key HR tech trends that are shaping the future of HR management.
1. AI-powered automation: Streamline HR processes
Artificial intelligence (AI) has the potential to greatly enhance talent acquisition and employee retention, according to 96% of senior HR professionals. With companies turning to hyperautomation as a new approach to digital transformation, human resource (HR) management is one of the top functions that can benefit from intelligent automation. Some of the HR processes that can benefit from intelligent automation are:
- Recruitment processes: AI-powered bots can gather and screen resumes, guide qualified candidates to the next hiring stages, and send custom emails to eliminated candidates.
- Onboarding: Intelligent bots can enable self-service onboarding, by automatically creating email addresses and user accounts, granting access according to the role, and sending onboarding documents to the new employee.
- Performance management: Bots can aggregate employee performance data scattered across different company systems for data-driven analysis.
- Payroll processing: Bots can collect data from login platforms and calculate overtime to adjust the compensation, calculate commissions, and generate reports on different payroll statistics.
- Offboarding: Intelligent bots can generate exit documents and conduct exit surveys.
IBM’s Cloud Pak incorporates RPA capabilities along with different AI capabilities to facilitate new hire onboarding on both the HR and IT ends, as it can:
- Automate the capture and processing of new application documents using OCR and NLP
- Centralize the storage and governance in an applicant folder
The following diagram displays the onboarding steps that can be automated via IBM’s RPA:
2. Process intelligence and advanced analytics: Improve HR decision-making
Business processes generate vast amounts of data that can be used by machine learning models to conduct people analytics and gain insight into employee and HR performance. Some of the metrics are:
- Time to fill,
- Competency analytics,
- Retention rate,
- Replacement rate,
- Cost per hire.
Moreover, by leveraging data generated directly from business processes, such as event logs, incident records, or audit trails, process intelligence techniques such as process mining and digital twins allow organizations to:
- Understand the trends, patterns, and deviations of different business processes in real time,
- Visualize the as-is state of processes,
- Identify bottlenecks and improvement opportunities,
- Identify automation potentials for business processes or specific tasks.
For example, only 12% of employees think that their organization is good at onboarding.2 Process mining can allow HR leaders to improve the employee onboarding process by using data such as the length of time to complete the onboarding process or the number of support tickets or the help desk requests related to onboarding.
Check our article on the use of process mining in HR for more.
3. Chatbots: Increase productivity and reduce HR staff’s workload
HR processes, from hiring and onboarding new employees to tracking employee performance, can be repetitive and exhausting. For instance, HR teams spend around 50% of their time answering the same questions and providing procedural information.3
- Scheduling candidate interviews,
- Responding to questions from job candidates,
- Answering FAQs of employees about benefits or policies,
- Processing leave requests in absence management.
Chatbots can reduce the workload of HR teams, so they can focus on tasks requiring human judgment and interaction.
Additionally, virtual assistants can be deployed across multiple platforms that employees already use, such as web chat, mobile chat apps such as WhatsApp, or voice assistants. This means less adaptation is needed when introducing them into existing workflows.
4. Cloud-based HR: Support for flexible work models
The COVID-19 pandemic has impacted the way many businesses operate, with remote and hybrid work options becoming far more commonplace.
Nearly 60% of Americans now work from home at least one day each week, and when employers are flexible enough to offer hybrid models, 87% of employees take up the opportunity.4
These changes make cloud-based HR technology an important tool for modern organizations, as they help navigate the changing landscape of remote work environments. Nearly half of the organizations report that cloud-based tools improve their business resilience and agility. This makes them essential in keeping businesses operating efficiently and providing employees with the flexibility they need.
Cloud-based HR systems help HR professionals through:
- Remote, digitized access to employee information and documents,
- Tracking remote workers’ attendance and productivity metrics, which are crucial elements of any successful hybrid work model.
Learn more about the future of work.
5. Blockchain: Faster verification and cybersecurity
The blockchain is a system of distributed storage that records and verifies transactions while protecting data from unauthorized alterations.
Blockchain technology can be considered a longer-term trend in HR tech, as Gartner expects it to reach mainstream adoption in more than 10 years.5 As it stands, the groundwork use cases of blockchain in HR are:
- Background checks: Recruiters can quickly determine the authenticity of prospective employees’ resumes without having to wait weeks for manual checks to be completed. For instance, MIT has started to give graduates the option to receive a blockchain-based diploma that can allow employers to verify them immediately.
6. Focus on employee experience: Shaping the HR tech stacks
Companies have started to increase their investments in employee experience and highlight the importance of it in their HR departments to achieve higher retention and attract new talent. For instance, Airbnb has rebranded the CHRO role as “head of employee experience”. This increased focus also affects the HR software stack.6 For instance:
- More than 80% of employers say they provide their employees with more resources for employee wellbeing and mental health than in previous years.
- PwC reports that more than half of companies are either integrating virtual reality into their strategy or have already implemented it in at least one area. AR/VR technology and techniques such as gamification can help companies increase employee engagement and provide reskilling and upskilling opportunities.
- For instance, the same study reveals that employees can learn soft skills, such as leadership or diversity, equity, and inclusion (DEI) awareness, 4 times faster than classroom and e-learning.
If you want to get started with your HR digital transformation initiative, you can explore our hub for HR tools and solution providers. If you have other questions, we can help:
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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