How HR Tech transforms modern businesses

One of the buzzwords in the tech industry these days is the Human Resource Tech or HR Tech. In 2016 alone, around US$1.96 billion have been invested in HR Tech companies globally. This new wave of technology uses data analytics, machine learning, advanced automation, AI, and other disruptive technologies to improve talent management and give companies a competitive edge against their competitors.

Technology has been disrupting fields of businesses including marketing and finance, but it took longer for technology to replace the human resource component of a business as it is difficult to replicate the complex responses required from a human resource officer to everyday situations. But with the booming HR Tech industry, a flawless HR tech that can accurately replicate and predict human behavior, minus the human errors, is becoming closer to reality.

But what really is HR Tech all about and how is it relevant to modern businesses? Is HR Tech  expensive? And will it be cost-effective to businesses?

What is HR Tech?

HR Tech is the use of technology to drive results or success in the field of human resources (HR). Because employers spend a lot on payroll, benefits, and other employee programs, the use of technology, often through automation, becomes necessary to cut down costs, save more time, and maximize the energy required to keep companies running. HR Tech is currently being developed and used to facilitate, if not totally replace, the work of human resource officers.

Examples of HR Tech include systems automatically generating payroll reports, managing workforce productivity, acquiring talents, and managing performances. HR Tech, therefore, aids in speeding up the hiring process, increase the chances of getting better candidates, ensuring your top employees stay, and improves the management of employee and business performance. With HR Tech, tasks that used to take HR teams days to finish can now be accomplished in just a few minutes.

HR Tech and Modern Businesses

The use and improvement of existing technology is becoming a popular strategy for businesses these days. Modern businesses are all about pushing their limits to increase efficiencies and scalability. They experiment with methods and technology to ensure that they keep their costs at bay, therefore allowing for their net profit to continue to skyrocket and for their businesses to continue to grow. Through the use of technology, errors committed often through manual input are reduced, consequently reducing the costs usually associated with these errors.

When the profit margin is high, this allows for the business to continue investing in technology to further increase their efficiencies and profits. This technology may even allow the business to effectively reach leads that were previously unreachable, generate sales from these leads, and convert them into long-term paying customers. This allows the business to secure themselves against their competition.

In fact, according to a paper, middle to large businesses are projected to have invested in HR Tech or a “cloud-deployed human capital management (HCM) suite for administrative HR and talent management” by 2020. And with the costs associated with HR tasks rising, businesses that fail to embrace digital transformation are at a greater risk of failing.

Costs of HR Tech

The pricing for HR Tech varies from company to company and the level of service and benefits they provide. But based on estimates, an HR Tech software could cost you US$1 to US$10 per employee, whether they will be using the software or not. And for a pricing scheme that limits the users to administrative users only (and not all of the employees), the price could range from US$5 to US$20, per user.

And for a one-time payment scheme, which is often common with larger businesses, they usually pay around US$500 to US$10,000 and if with add-ons, around US$10,000 to US$100,000.

HR Tech: Quick and Cost-Effective?

According to a 2016 nationwide study, those who are using HR Tech (employees completing their HR tasks through software) saves their department around 7 hours per week. In about half of those organizations in the said study, the total hours saved even reached up to 10 hours.

Furthermore, in another study, they found out that your organization may have to spend around US$4.39 per HR task across the employee life cycle. This means that using HR tech to speed up tasks like onboarding, benefits enrollment, and training can potentially save you more than you are spending for the HR software needed. And not only will HR tech help you save in terms of cost, but it will also help you upgrade your workforce by increasing the chances of getting better candidates, ensuring your top employees stay, and improving the management of employee performance.

What about the risks of HR Tech?

Well, the good news is that the risks associated with the use of HR Tech are not usually caused by the software itself. But they are, nonetheless, risks involved with the adoption of new tech in general.

• Privacy laws and data breach - according to research, in 2016, businesses were the cause of almost half of all data breaches in the United States. Globally, the costs could reach up to US$3.62 million. This means that before implementing HR Tech, businesses should be aware of the privacy laws in their states and the security measures that they need to enforce and comply to avoid putting their customers’ information at risk.
• Scalability and relevance - the risks of HR tech, as well as tech in general, include running an obsolete software in just a few years. Because the development of technology is becoming more and more rapid, you will run the risk of getting your HR software obsolete and irrelevant, especially when HR practices could abruptly transform anytime.
• Higher costs than benefits - HR Tech is costly and the benefits promised by HR Tech companies may not be as high as they projected. Moreover, the lack of knowledge in terms of proper implementation and utilization of the tool may also be an issue, which may prevent the company from getting their desired results.

Conclusion

But overall, these are risks that can be mitigated by developing a strategy that first, ensures the company is ready to comply with privacy regulations, second, that the tech they are adopting is scalable and can be adjusted to adapt to changing HR practices, and third, that the company is sufficiently equipped with the knowledge of using the tools provided by an HR Tech software so they are getting the results they need.

HR Tech is becoming more and more useful in modern businesses. With the disruption brought about by technology and with the shifts and changes in the market force, HR practices are also changing. The costs associated with HR tasks are not getting cheaper and human resource officers are faced with a growing workload. HR Tech will not only allow them to automate their tasks to reduce their workload, but it is also proven, as this article has discussed, to help the company save unnecessary costs and increase work efficiency.

In the end, businesses that fail to adapt to changing work practices and take advantage of digital transformation are at higher risks of failing. So be sure to get your business ready to adapt to technology.