To stay competitive, companies need to evolve and adapt to new paradigms within their industry. In the human resources field, corporations are experiencing tremendous change in terms of the work life and HR practices related to data and HR technology. HR managers are leveraging technologies in order to become more efficient, make better and more informed business decisions and more effectively manage their workforce on a daily basis.
HR software and tools on the market have been evolving to meet the needs of companies that are ready to take advantage of HR technology. In this article, we will look at future HR technology trends and how they play an important role in taking HR teams to the next level.
There are multiple HCM (human capital management) suites available on the market today which cater to a plethora of HR needs. However, according to a Gartner study, the future of HR systems will take on the form of an HR application framework. This is a new way of structuring HR systems that uses an integration approach to give companies the flexibility to choose the tools that best fit their organization’s specific requirements.
What are HR Applications?
To understand what an HR application framework is, it is worth considering the definition of an HR application. If you are looking for an HR software to implement, it is likely that it is made up of multiple HR applications that enable you to carry out various HR functions such as talent management, recruiting, payroll, benefits administration and more. Some technologies such as HCM suites that provide all of these modules in one place. However, HCM vendors rely heavily on internal development of their solution to try to meet their customers’ needs in each of these areas.
On the other hand, there are HR application vendors that specialize in a single area of human resources management. For example, you will be able to find tools that deliver a performance management solution. These solutions may not be part of a unified HCM suite. To avoid decentralization and dispersed HR systems, HR technology trends are shifting towards the importance of integrations of various HR applications, hence the HR application framework.
The HR Application Framework
The HR application framework will grasp the concept of connectivity in order to centralize data from multiple third-party vendors, each supporting specific HR functions or processes. You may be used to seeing all functions such as onboarding, performance management and payroll in one system, but not all of these modules are made to fit all of your requirements. This is especially true when it comes to complex organizations where each location or department has its own requirements or regulations to follow.
Being able to choose the technologies that can best meet those requirements and unify them into a central hub is the future direction of HR tech. Thanks to integrations and connectors, HR teams will experience the evolution of HCM suites towards an HR application framework approach supported by strategic tools such as HR analytics and workforce planning capabilities.
Let’s take a look at the layers that make up an HR application framework:
The first layer of the framework is the HR platform where all core HR functionalities reside. The purpose is to give users a seamless experience while carrying out HR processes. Performing all administrative tasks in a system can significantly reduce paperwork and having to rummage through physical files or Excel spreadsheets to find the information you are looking for.
At a basic level, your HR system will act as an employee portal to all employee management, workforce management and the strategic tools that can be utilized when the two are integrated.
An employee management application will normally include features such:
- Employee records where employee data is stored and can be retrieved by a search function and reporting capabilities
- Employee self-service which allows employees to access and update their own data. For example, they can change their bank information for payroll or change their address when they move.
- Payroll administration to manage employees’ salaries, benefits, tax information, bonus information and more to ensure each employee is paid correctly and on time.
- Benefits administration to manage healthcare benefits such as medical, dental and vision plans. It also facilitates the administration of other benefits such as 401k enrollment and life insurance plans.
Workforce management on the other hand, includes all the applications that are used to manage the day-to-day of your employees’ work. Features of a workforce management system would commonly have features like:
- Time & Attendance which tracks employees’ work hours by allowing them to clock in and out and tracks their attendance based on a schedule.
- Scheduling allows managers to plan employees’ future work hours and efficiently manage the staffing levels of multiple shifts.
- Leave and Absence where employees can request leave or time off. This feature often tracks PTO balances and communicates used vacation time to the payroll system in order to pay them accordingly.
- Performance management which gives managers a better understanding of employee performance, productivity and engagement levels. This can help management teams reward and further develop high potential employees.
When employee management and workforce management are centralized, this allows HR professionals to strategically and effectively carry out HR processes. But of course, there are systems that are used to manage these processes as well. You should be taking advantage of:
- Learning management system (LMS) which is used to create and track the progress of employee training and development programs.
- Applicant tracking system (ATS) that helps better manage the recruiting process by storing candidate information, scheduling interviews and tracking important recruiting KPIs.
- HR analytics is crucial for strategic HR management. Analytics tools are used to analyze and track the progress of various KPIs through reports and visuals including graphs and dashboards.
- Onboarding and offboarding are key parts of the employee life cycle that can be streamlined with an HR tool. These tools can support electronic document generation, e-signatures, and communicating key information to new hires, just to name a few.
The second layer of the HR application framework is a unified database. This means that an employee profile contains information from all the modules and applications used to manage HR processes.
Having a unified database is also an essential part of analytics and reporting. In fact, having data dispersed into multiple databases (even if the user sees them all in one system) can be painful. Being able to analyze data across multiple applications can provide much better and meaningful insights than when looked at separately. For example, comparing employee turnover rates with several factors such as training, compensation and recruiting practices can reveal insights that can be used to improve HR performance. Furthermore, making these types of strategic decisions that are supported by strong data, can benefit the company’s bottom line by reducing turnover costs.
Lastly a unified database can streamline HR processes with the use of workflows. For example, you can make the onboarding process much simpler by having all the data automatically flow from one application to another. This way you don’t need to re-enter data from the recruiting system, to the onboarding system and again into an LMS to administer training to the new hire. A unified database can automate the entire process.
The last layer of an HR application framework is the user experience. These are the added features of the system that enhance the user experience and streamline HR processes and business operations. With the shift towards digitalization, it is important that the tools that are being used are customizable as to reflect the needs of both HR users and employees.
Integrated into an HR platform that contains a unified database, these features can enhance the user experience and help HR meet the expectations of employees and executives:
- Digital assistants to guide employees and answer questions. This innovation is especially important when it comes to meeting employee expectations in terms of support and accessibility.
- Workflow manager present an opportunity to automate HR functions and processes such as onboarding, offboarding, compensation management, etc.
- Notification center that alerts you whenever you have a pending task or approval to complete. This is also part of workflows and process automation. With notifications enabled, HR professionals can stay on top of everything and be more productive.
- Single sign-on (SSO) so that you don’t need to log into different tools to carry out several functions. An SSO feature logs you into all your tools at once which can save you a lot of time depending on how many applications you have.
Advantages of an HR application framework
The future of HR technology is the HR application framework. You will find several HR technology vendors shifting towards this framework to develop their HR solutions. Here are some benefits you can expect to see as an HR manager and business professional.
Automated HR processes
The HR application framework is an opportunity to digitalize your entire HR function. It houses all your HR data and activities which can significantly reduce the amount of time it takes to perform HR tasks. But how?
By using a composable approach. Based on the HR application framework, composable applications allow organizations to build their own HR tech stack based on their business needs without sacrificing the benefits of connectivity and centralization.
If you have to complement your HRIS with spreadsheets and physical paper, this approach will allow you to eliminate the piles of paperwork that has been traditionally associated with a typical HR office and make spreadsheet gymnastics a thing of the past. Housing information in a single platform means that you don’t need to spend time manually updating information in multiple places every time something changes.
Also, everything is one place so your processes can run smoothly. It used to be that HR spent a lot of time preparing new hire paperwork and benefits enrollment for example. Instead, you can let a system do all the heavy lifting while you focus on more important issues.
Accurate data and reporting
With a unified database and data validation methods, analytics and reporting can become much simpler and more reliable. With a single source of truth, you can better rely on your HR system to give you accurate and timely information.
Self service tools can give employees control over their own data. Adding an approval workflow on transactions or changes made in the system can give HR administrators the peace of mind they need to know that each data point is valid. It’s also important that a system has internal data validation mechanisms configured. For example, you can ensure that a birth date is within a reasonable range and that it is written in a specified format for consistency.
Improved employee experience
The employee experience has become one of the focal points in human resource management. Improving their experience and encouraging a culture of engagement and empowerment is not just a best practice; it’s essential for the success of your business.
What does an employee benefit from an HR application framework?
With a streamlined system made up of the best possible HR applications, employees can enjoy things like:
- Smooth and painless onboarding and offboarding processes
- Control over their personal information
- Better visibility of their career progression
- Opportunities for training and skill development
- Ability to provide and receive consistent feedback
HR Technology Trends
With the presence of Millennials in the workforce growing, it is no surprise that companies are relying more and more on technology to run their business. In fact, no matter which generation you are from, you have probably noticed an increased technology adoption in your workplace. So, what does this mean in terms of HR technology?
There are some important trends that we are noticing in the current work environment that support the shift towards an HR application framework. Let’s take a look at a few examples.
Many companies and HR departments are already in the process of digital transformation. This means that companies are always looking for the best HR tools and technology to fit their business needs. In fact, you can expect that technology will be used across all HR functions in order to streamline and make HR processes more efficient. Many companies are already leveraging cloud-based HR software. In many cases, various software are used by HR teams to carry out different HR services.
With the rise of technology adoption, there becomes a need for integration and centralization of the massive amount of data being generated on a daily basis. This is where the HR application framework comes in. With the ability to connect multiple tools together through integration, you can start to better to see better HR performance thanks to:
- Leveraging of data and HR analytics
- Self-service tools
- Centralized communication
- Automated workflows
- HR digital assistants and chatbots
Remote Work Management
The days where the HR department was always located across the hallway are now in the past. With the rise of remote work, the future of HR is becoming more and more virtual and accessible from anywhere.
For example, many HR processes can be done completely in a remote setting including:
- Digital learning (training and development)
- HR requests
- Performance appraisals
- And more
Of course, an HR application is needed to perform all of these functions remotely since we can no longer rely on paper and physical documents to complete these functions. That is why HR technology plays an important role in providing access to employees from anywhere and anytime.
When many HR applications are needed, integration becomes important once again. Logging into multiple systems not only slows down processes and hinders the user experience, it also means that data is dispersed, and the risk of data inaccuracies are increased. Integrating multiple applications using the HR application framework can provide the connectivity needed to avoid these issues.
HR professionals handle sensitive data on a daily basis. We are also seeing data privacy laws being passed across the world such as the GDPR in Europe and the California Consumer Privacy Act. Several other states also have their own data privacy laws. According to these regulations, employee data needs to be secure and confidential.
When it comes to HR technology, integrated systems help keep documents centralized and secured. Additionally, tools such as e-signatures and employee self-service can ensure that employee data can be controlled.
Today, HR teams are looking for the perfect HR solution to meet all their needs. Many are already taking advantage of the HCM software and SaaS (software-as-a-service) solutions out there. But these HR management systems were built with a one-size-fits-all mentality.
The HR technology trends that we are experiencing today lends itself to a future of connectivity and integration of multiple tools and modernizing legacy applications. This provides a more scalable and flexible solution for not only your HR and payroll department but for all business processes as well. For this reason, we will start to see a shift from standard HCM solutions to an HR application framework.