HR Technology 101: The Complete Guide for Every Business

The way that organizations manage their people is being revolutionized, thanks to new and exciting HR technology. This technology positively impacts almost every area of HR, from before employees start through to when they resign and are offboarded. HR technology, is therefore, an important engine of organizational growth.

This complete guide covers everything you’ll need to know about HR tech, from its definition and what it’s used for to the benefits it brings and the types of HR tech out there. We’ll also cover how to maximize your utilization of HR tech and some contemporary HR tech trends you need to know.

What is HR tech?

HR tech refers to a suite of digital tools and specialist software designed to integrate into the workplace to facilitate, streamline and enhance HR management processes. It covers various areas, such as recruitment platforms, payroll processes, performance management, and much more.

The idea behind HR tech is that it automates repetitive or time-consuming tasks, improving accuracy as well as efficiency, which frees up managers and HR professionals to get on with other tasks. It can also aid decision making and improve analytics, enhancing the effectiveness of the HR department.

HR tech is becoming an ever more important area of workforce effectiveness, helping to provide a competitive advantage and support organizations in functioning at their best.

How do employers use tech in HR?

As discussed, HR tech permeates almost every area of HR management and practice. For this reason, it’s vital that organizations understand how it’s used. Here is a list of the five main uses of HR tech.

Compliance

HR tech helps managers and HR teams adhere to regulatory compliance. Indeed, there are plenty of tools to facilitate this — for example, software like Workday, SAP SuccessFactors and BambooHR all help employers monitor labor law compliance, safety documentation and anti-discrimination policies.

All these systems provide record-keeping functions, enabling training certifications, right-to-work documents, and policy signoffs to be stored and pulled up whenever they’re needed.

Some systems, meanwhile, use AI to monitor legislative changes, ensuring systems are always up to date and future-proofed if any regulatory information changes. Built-in automation reduces the risk of input or tracking errors, like missed deadlines or the wrong documentation being uploaded.

Data security

Employers use HR tech to safeguard employee information and ensure continuous and strong data security. There are many tools to support this work, such as end-to-end encryption, secure cloud storage, and multifactor authentication that can offer a high level of protection to employees’ sensitive data.

Security software will also be protected by rigorous access control, with employers separating duties and assigning access to employees based only on the access they need. AI built into this software has the power to detect anomalies and security breaches, permitting swift responses to potential threats.

Some systems, like Okta or Varonis, provide real-time monitoring and alerts, ensuring employers are GDPR- and CCPA-compliant, as well as maintaining employee trust.

Learning and performance management tools

HR tech has revolutionized employee training through making it more accessible, fun and interactive.

Organizations can use learning management systems like Coursera, Udemy and Litmos to provide powerful eLearning solutions, enabling employees to learn in their own preferred styles. Additionally, HR tech has enabled performance management to evolve beyond traditional annual appraisals for more constant employee evaluation.

For example, tools like 15Five, iSpring LMS and BetterWorks allow AI-analysis of employee performance and real-time tracking of personal and professional goals, feedback, and employee sentiment.

HR tech also helps employers bring learning and performance management together, mapping out learning pathways around individual development needs.

Payroll and benefits management software

Managing payroll can be a massive and complex task, particularly if the organization is equally large. Employers have a large choice of payroll platforms, such as ADP or Gusto, that can handle salary payments, tax matters and wage compliance.

These specialist tools can automate processes as well as link up with accounting software to ensure books balance and employees are paid correctly. They also provide functionality for employees to view their pay slips, manage payment contributions, and select benefit packages.

Analytics and reporting functions are built into these systems, helping employers manage their costs.

Recruitment and applicant tracking systems

Applicant tracking systems are a popular form of recruitment tool that allows employers to streamline many elements of the hiring process, such as managing large volumes of applications efficiently.

ATSa can filter résumés for employers based on selection criteria, saving recruiters time and eliminating bias, while they can also automate candidate communication and even use historical data to predict the best candidates for certain roles.

Meanwhile, many ATS programs can be integrated with other areas of HR tech, ensuring a seamless onboarding experience and candidate journey, from application to hire.

Why should employers care about HR tech?

HR tech might seem a little faddy or even unnecessary, given the ability of HR teams to function perfectly well without it. That said, organizations should be clear about the benefits HR tech brings, and this section covers the most pertinent advantages to consider:

Better developed employees

By providing deeper and greater insights into employee performance management, HR tech enables HR teams to prescribe meaningful and exciting learning opportunities for each worker — and in some cases, the tech will provide recommendations itself.

The outcome here is that the time-consuming and error-prone task of assigning learning and development is sped up, and provides greater outputs for employees, who will learn faster and become more motivated through increased development opportunities.

Enhanced employee engagement

Engaged employees are productive, happy and likely to remain loyal to an organization for a long period of time.

HR tech can include engagement platforms, such as offering engagement surveys, feedback systems, and internal communication functionality that serve to foster team collaboration and gauge employee feelings and sentiment in real time. Employers can then report and analyze this feedback and act on it as they see fit.

HR tech for the purpose of employee engagement can contribute to a healthy workplace culture and is a key benefit to consider.

Improved efficiency

HR tech can reduce the administrative burden on HR teams and help them rise above the stereotypical view of being an administrative or “business support department”. Indeed, HR tech can simplify, streamline or automate many HR tasks, such as onboarding, document management and filing, payroll, and wage and hour reporting, with the added benefit of saving time and improving accuracy.

Some examples include chatbots answering employee questions and automated deadline reminders. This all enables HR teams to focus on high-value projects that make big differences at work.

Improved recruitment and retention

ATSs can help employers recruit faster, more accurately, and with a strategic approach that ensures the best talent fits the right roles, improving operational strategy. Additionally, ATSs can improve candidate experience and, therefore, improve the organization’s employer brand.

HR tech can also analyze employee turnover and exit interview feedback, helping employers understand why people leave and adjust hiring strategies to mitigate this risk in the future. A smooth and polished ATS can, therefore, impact all areas of the recruitment and retention journey.

Increased security and risk management

HR departments process highly sensitive information, and HR tech platforms will support and enhance the protection of this information through secure access controls, encryption and storage.

Access can be monitored and compliance with data protection laws like GDPR can be easier to achieve through automation and analysis. This leads to HR tech providing enhanced safeguards against the consequences of data breaches, such as reputational damage, legal action and fines.

Payroll and benefits efficiencies

Employees will be grateful to an organization that prides itself on payroll accuracy. Not only does HR tech facilitate this, but it also reduces the administrative burden on the HR team to do this and increases the feeling of payroll control for both the employee and the employer.

Benefits packages can be mapped out and provided to employees via HR tech, with AI being used to select the best packages for certain people, based on their inputs and comments. HR payroll tech can also improve tax and wage and hour compliance.

Types of HR tech

When considering how HR tech can benefit you and your organization, it’s good to begin with a breakdown of the three main types of tech out there: HCM, HRIS, and HRMS. This section explains each one, some examples of the software, and what they can bring to your company.

Human capital management

Human capital management (or HCM, for short) are comprehensive systems and strategies used by organizations to manage the entire employee lifecycle, from hiring to offboarding, and beyond.

HCM aims to benefit organizations far beyond simply completing basic HR tasks. Its purpose is to maximize employee output and happiness, while aligning workforce capabilities with organizational strategy.

Benefits

HCM aims to provide significant added value to the employee lifecycle. Here are the main benefits it brings:

• Enhanced talent acquisition: HCM systems ensure organizations attract and retain top talent through providing tools to help with employer branding, hiring, succession planning, onboarding and new hire development.
• Improved employee engagement: Features such as career planning, personalized learning modules and performance tracking put employees in control of their development, and increase empowerment and job satisfaction.
• Strategic workforce planning: HCM systems enable companies to accurately forecast talent needs and then allocate resources in the right way.
• Streamlined processes: Tasks like payroll, benefits management and compliance can be automated to ensure efficiency and reduction in errors.

Subtypes

HCM can be compartmentalized down into several HR tech subtypes:

• Employee engagement platforms: Designed to improve culture and employee morale, engagement platforms offer employee surveys, pulse questionnaires, real-time feedback tools, as well as communication abilities. Some examples of these platforms are CultureAmp or Glint.
• Talent management systems: These focus on attracting, developing and retaining the best employees. They’re made up of applicant tracking systems, onboarding tools, performance management and appraisal tools, and succession planning capabilities. Some examples of this are Workday or Oracle.
• Workforce analytics: These specialist tools analyze employee and organizational data to identify trends as well as improve the accuracy and speed of decision making. They provide powerful predictive insights that can aid in identifying risk areas like skill shortages or employees who might be a flight risk. Some examples of these can include ADP Workforce Now or Visier.

Human resources information systems

HRIS is primarily concerned with the storage, management and organization of employee data, and essentially serves as a digital repository for this highly confidential information and supports correct access and compliance.  Whereas HCM is highly strategic in its purpose, HRIS is more administrative in terms of functionality.

Benefits

Here are some of the main advantages that HRIS can bring to your organization:

• Automation of routine tasks: HRIS reduces time spent on routine and administrative duties by automating tasks such payroll, filing and time tracking. This increases the job satisfaction of HR professionals by allowing them to devote their time to more rewarding tasks.
• Enhanced analytics: HRIS can generate reports with large amounts of customization options, which allow deeper insights on metrics like absenteeism, DEI and labor turnover.
• Centralized data management: All employee information, including personal details, job history and benefits, is stored in one place.
• Regulatory compliance: HRIS can support compliance in areas such as record- and time-keeping accuracy to ensure legal compliance.

Subtypes

Here are the various types of HRIS to think about:

• Benefits administration systems look after employee reward and benefit programs, like health insurance and retirement processes, as well as other perks such as wellness benefits. They facilitate the administration of these processes as well as providing employee access to them and customizing their benefits around their own needs and wants. Some examples of these are Gusto or Zenefits.
• Core HRIS systems are focused on basic HR processes like record management, administration, payroll and compliance. Some examples of these tools are BambooHR and SAP SuccessFactors.
• Time and attendance systems track employee hours, pay, schedules, leave requests and rotas. These are often integrated with payroll applications to ensure a coherent system and high accuracy. Some examples of these tools are Fourth, Kronos and TSheets.

Human resource management systems

Often viewed as a middle ground between HCM and HRIS, human resource management systems (also known as HRMS) are geared to provide operational efficiency as well as time savings while supporting long-term workforce strategic goals.

Indeed, this blended approach makes it a great choice for many companies who are looking for a comprehensive approach to HR tech needs. HRMS essentially provides HRIS functionality with additional tools to support planning interventions.

Benefits

Here’s what HRMSs’ blended approach to HR tech can bring to your organization:

• Improved employee experience: HRMS often uses self-service portals to empower employees to control their own information, make changes to it, access training, and track their own performance.
• Improved decision making: HRMS uses powerful analytics to support managers in making decisions on matters such as hiring and promotions, and how to manage the workforce.
• Integrated functionality: The blend of core HR tasks with strategic tools means that HR processes are approached with a high degree of flexibility and can be comprehensively built into existing systems for maximum impact.
• Scalable solutions: HRMS is great for organizations of all sizes and can allow significant customization to meet the client’s specific needs.

Subtypes

Here are the various subtypes of HRMS that organizations can use:

• Full-suite HRMS combines many areas of HR management, such as pay and reward, time and attendance, talent management, and recruitment in one system, with access granted depending on the user and their scope of responsibility. Examples include Oracle (formerly PeopleSoft) and UltiPro.
• Performance and learning management systems focus on people development as well as performance management, and allow for the completion of performance reviews, goal setting, continuous feedback documentation, and access to L&D interventions. Examples of this include Cornerstone OnDemand and SAP Litmos.
• Workforce planning tools are integrated into operational strategy by forecasting talent needs and analyzing workforce skill levels and demographics. They often include budgeting features as well as succession planning and talent management Examples of these include Anaplan and Adaptive Insights.

How to improve your HR tech strategy

Implementing an HR tech strategy is about more than just plugging and playing. It requires careful refinement and consideration of where your organization currently is. Here’s what you need to do to improve your HR tech strategy.

1. Consider mobile-friendly platforms

In a world where remote working and flexible schedules are increasingly common, mobile-friendly HR tech is essential. Choose platforms, then, that offer mobile apps or responsive designs to allow employees to access information, request time off or complete training from anywhere.

A mobile-first approach improves accessibility while it even encourages engagement. It will also help your organization drive compliance by simplifying the effort needed to keep systems up to date at all times.

2. Define clear objectives

Before you implement or upgrade HR tech, you should define clear objectives that aligned with your strategic goals. Whether it’s reducing turnover, improving compliance or boosting employee engagement, knowing the desired outcomes makes sure that the right technology is chosen.

Clear objectives also help measure the return on investment and assess the system's effectiveness post-implementation.

3. Ensure seamless integration

Fragmented systems can lead to inefficiencies as well as data silos. Organizations should, therefore, prioritize HR tech that integrates seamlessly with existing tools, such as payroll software, accounting systems or enterprise resource planning platforms.

Integration ensures smooth data flow and streamlined workflows, and provides a more unified view of workforce metrics. It even minimizes conflict and tech rage.

4. Focus on user experience

HR tech is most effective when employees and HR professionals actively engage with it and are happy to do so.

Prioritize platforms that feature intuitive interfaces, easy navigation and robust self-service options. This helps your people manage tasks like accessing pay slips, updating personal information or enrolling in benefits. A user-friendly experience minimizes resistance to adoption and reduces training time, while it can also contribute to better employee engagement!

5. Invest in scalable solutions

As organizations grow, their HR needs evolve, and it’s important to keep this in mind when choosing HR tech.

Selecting scalable HR tech ensures the system can accommodate potential future growth without demanding frequent overhauls. For example, a cloud-based HRMS can easily integrate new features or expand to support additional users, making it ideal for scaling operations while minimizing costs and disruptions.

6. Leverage data and analytics

Modern HR tech offers comprehensive analytics to support data-driven decision-making. Organizations should utilize these insights to identify trends, as well as predict employee behavior and optimize HR strategies. As an example, predictive analytics can highlight potential flight risks, enabling proactive retention efforts.

Regularly analyzing metrics (such as engagement levels and recruitment costs) ensures the tech is delivering return on investment and sparks proactive debate on whether it’s scaling in the right way.

7. Prioritize employee engagement tools

Employee happiness is critical to the success of all organizations. A successful HR tech strategy includes features that foster employee engagement as well as satisfaction. Meanwhile, platforms with real-time feedback systems, wellness programs, and gamified learning modules have the ability improve morale and productivity.

Encouraging employees to partake in engagement surveys or use training portals ensures they not only feel valued but also invested in the organization, reducing the risk of labor turnover as well.

8. Provide comprehensive training

Even the best HR tech is ineffective if users don’t know how to leverage it.

Invest in comprehensive training programs for HR teams, managers and employees to ensure everyone understands the system’s capabilities. Continuous learning efforts, meanwhile, such as webinars and refresher courses, keep users updated on new features as well as best practices.

Ensure HR tech knowledge is cross-checked regularly and any identified skill gaps are swiftly addressed, especially if the relevant users are in positions of legal responsibility.

9. Seek employee feedback

Employees are the end-users of HR tech and arguably the most frequent interactors and the ones that are hardest to please. Therefore, their input is simply invaluable in shaping its strategy.

Conduct regular surveys and focus groups to understand their needs and individual preferences regarding the platform. Then, make sure that you act on this feedback or, at the very least, listen to it, as the feedback provided not only helps the tech meet user expectations but it also fosters a sense of inclusion and engagement, leading to greater adoption rates.

10. Stay updated on compliance features

Laws, regulations and governance surrounding employment and data privacy are constantly evolving. Organizations must ensure their HR tech complies with local, national and international regulations such as GDPR and local labor laws.

Opt for systems that offer automatic updates and plenty of training to keep compliance features current and reduce the risk of fines.

Top HR tech trends to know

HR tech is an ever-changing landscape, and as technology capabilities increase, so too does the power and flexibility of HR tech. Here are the current top five HR trends to keep in mind and consider how they can be used in your own HR management strategy:

Advanced analytics and people insights

HR is increasingly being called upon to provide objective and high-value decisions on a wider range of people and business matters; this is fundamental to the role of the division as a business partner to the organization.

Advanced analytics can help HR provide actionable insights in times of change and urgency. Predictive analytics helps HR teams anticipate hiring needs, manage skill gaps and optimize workforce allocation. They can also help provide solutions based on engagement survey data, as well as assess engagement information in real time, identifying factors that impact morale and productivity.

DEI needs are increasingly being built into HR data analytics, helping organizations gauge the effectiveness of their DEI offerings and track their impact, contributing to an ever more inclusive and fairer workplace.

Bringing this all together are ever more advanced HR data dashboards, allowing managers to pull together customized reports and presentations, helping them present data more clearly and monitor key performance indicators that are relevant to their teams.

Artificial intelligence in HR

AI is one of the most exciting ways HR is changing, through its ability to automate repetitive tasks and provide deeper insights through data analysis.

AI is transforming recruitment through résumé scanners, chatbots that interact with candidates, interview scheduling, and answering applicant queries. It also offers predictive analytics that identify patterns in workforce data, predicting employee turnover, performance outcomes and training needs, allowing HR to make accurate and proactive decisions.

AI algorithms also analyze individual preferences and behaviors, recommending training courses, career paths and wellness programs to interested employees. Perhaps the most important benefit that artificial intelligence can bring to HR tech, though, is a reduction in bias by removing human error from recruitment and performance management processes.

Employee wellbeing platforms

Due to the growing emphasis on mental health and work–life balance, there are plenty of HR tech companies and programs specializing in wellbeing technology.

Employers increasingly see the benefit of this through proven and direct correlations between employee engagement and higher productivity with improved access to wellbeing platforms. Integrated wellness solutions are already being built into HRMS systems, offering access to meditation applications, fitness trackers and virtual therapy sessions.

Additionally, HR teams are now investing in wearable tech for their employees, allowing them to monitor their stress levels and providing real-time alerts to managers. As mentioned above, AI is also being integrated into wellbeing platforms, enabling employees to benefit from bespoke wellbeing solutions based on their individual circumstances and needs.

HR blockchain applications

A relatively new HR trend is the emergence of blockchain technology and how this can impact HR through secure, transparent and decentralized data management.

The decentralized nature of blockchain keeps HR and payroll data secure and tamper-proof, as well as enables instant verification of queries such as background checks, qualifications, work history and employee documentation.

For remote and multinational companies, blockchain technology has the added benefit of simplifying cross-border and jurisdictional payroll and compliance matters by transparently providing access to records and information from anywhere in the world in real-time.

Blockchain can also help HR teams work smarter through the application of smart contracts, where automated, self-executing contracts can streamline third-party payments such as paying freelancers or agencies, thus reducing compliance and due diligence time and saving on administrative duties as well.

HR tech for remote and hybrid workforces

With remote and hybrid working arrangements becoming more of the norm rather than the exception, HR tech is adapting to support these new workplace dynamics. One area where this is evident is through virtual collaboration tools, where platforms such as Slack, Teams and Zoom are now being integrated into HR systems to streamline communication and bring working groups closer together.

Additionally, the functionality of these apps is becoming more advanced, with engagement platforms and systems being integrated, allowing virtual team building, engagement surveys and gamification to keep employees engaged and happy while they collaborate and communicate with their teams.

Digital onboarding is being used to a great extent to ensure new remote workers are inducted into the company in a similar way to office-based employees. Finally, performance monitoring software, while a little more controversial in its usage, allows leaders to monitor and manage productivity and address issues without the need for micromanaging.

Frequently asked questions

If you’re curious about how HR tech can benefit your organization and contribute to its success, the following frequently asked questions about HR tech will help you understand more about what it can do.

Key takeaways

HR tech is becoming ever more important to the success of an organization, as well as its HR team. It offers a vast array of benefits and is an increasingly important source of competitive advantage.

Here are some key considerations to keep in mind when thinking about HR tech:

• HR tech can be found in all stages of the employee lifecycle, from hiring to post-offboarding.
• There are three main HR tech systems: HCM (which offers strategic support), HRIS (which offers administrative support) and HRMS (which offers a combination of both).
• Keep the user and the business needs top of mind when considering how and when to implement HR tech.
• Trends in HR tech are always evolving, and it’s vital to keep up to speed with emerging systems.

HR tech, when used in the right way and implemented correctly, can provide advantages to day-to-day HR matters, as well as wider people strategy. Think about the approach that best works for you, and enjoy the success HR tech will provide!

Got a question? Let us know in the comments section below!