September 10, 2021

HR Management in the Age of Technology: Efficiency Factor, Cost Savings, and Other Ways Employee Engagement Has Changed

‘Human Resources’ has seen some of the most impressive transformations in workplace technology these past few decades. 

HR managers used to have office extensions, where they keep hundreds or thousands of employee files, depending on the size of the companies. Maybe they have some alphabetical sorting, to avoid rummaging through hundreds of files each time they’re looking for one.

How they survived that isn’t even the challenge here, but the fact that managing people was a hassle. In fact, doing what I described above would suffice as a staff’s day-to-day responsibilities.

Not to say that you almost can’t do anything with the information you have. How much of that data could your brain actually process, since the HR manager’s brain was the only CPU back then?

Boom! Record-Keeping Got a Boost

It wasn’t until the 1960s and 1970s that tech-enabled record-keeping in HR actually became a thing. 

One thing is the ease that comes with data management, but again, this helps companies to have a clear oversight of their recruitment policies, and how it’s playing out in the larger scheme of things.

mainframe computers

This central data repository was stored on large mainframe computers like the one above. 

HRIS from the ‘80s

In a definition by Oracle, HRIS, which means Human Resources Information Systems, is a software solution that maintains, manages, and processes detailed employee information and human resources-related policies and procedures.

It standardizes HR operations, ensuring accurate record-keeping and reporting, while also activating two-way communication between employees and companies.

Say this was when paper-based and manual HR-related processes got relegated, and you’d be right. This was when people management shifted from being clerical works, to becoming more strategic and high-value.

Later in the 1980s, HRIS would move from mainframe systems to client-server technology. That brought significant change, in terms of affordability and data analysis. 

The Human Resource Information System would go on to become the backbone of every other invention in HR technology. It may have adopted several names, like employee management portals or Human Resource Management Systems (HRMS), but the functionalities have only been growing off of the first generation of HRIS. 

Current technologies could automate workflows, and leverage artificial intelligence (AI) to handle repetitive, time-consuming tasks. They can integrate feedback, and HR managers can automatically adjust employee-related structures based on changes in company-wide policies. 

In fact, HR tech companies now even leverage the data storage capacities, processing capabilities, security layer, and scalability of cloud computing, to cater to large organizations, and fast-growing ones. 

Saving Companies Millions in HR-Related Costs

According to recent research by a research group at the University of South Carolina, over 50% of an HR department’s time is spent processing information and answering employee questions. 

So, for a company that pays $20 per hour, a 40-hour workweek would mean 20 hours are spent on activities that could be automated each week. The impact isn’t only in bloated labor costs, but also in employee satisfaction and productivity.

Here’s a recent breakdown by a popular HRMS, showing cost savings companies enjoy when a chunk of HR tasks are automated, especially the mundane, repetitive ones. 

Some of the takeaways are that HR managers spend about 5 hours onboarding new employees, and outside of that, there will be some repetitive tasks taking 2 hours of their average day. Imagine what companies save by automating both. 

Also, how employees work and manage their time are critical roles of human resources. But instead of running around, trying to keep a tab on people to ensure efficiency, and spending  $530 p/a per employee, technology now takes care of that.

This makes it easy to now actually manage people, and not their work – they’ve got the technology to do that.

What More Can You Do with HR Technologies?

Apparently, human resource management is a broad concept, with many areas involved – and all requiring the same level of attention. Think of recruiting, payroll, appraisals, etc.

  • Day-to-Day Management

For broad management of workers, we now have platforms, some of the SaaS or custom-built, bringing your HR office into a single online box. What would an HR team typically do on a day-to-day basis? Manage leave requests, put a company-wide face to the organogram, onboard new employees? They’re all covered.

  • Performance Analysis

In the past, you are left with rummaging through files or rely on often inaccurate opinions of colleagues and line managers to grade an employee’s performance. You can choose to deploy systems that automate the performance evaluation process. By facilitating alignment of employees’ goals with corporate initiatives, everyone is appraised based on that, and not subjective data.

  • Talent Recruiting

In a typical recruiting process, candidates apply via emails, and HR managers start the sorting, pre-qualification, and all. But now, the whole recruitment journey, from candidate sourcing, engagement, shortlisting/selection, and hiring (including onboarding) can now happen in software products developed for this. 

  • Payroll Service

In the US, for example, Paychex helps small to medium-sized businesses manage their payroll and other employee benefits. This lets companies put recurring payments on automation, and not have to process these afresh each week or month.

  • Employee Engagement

Employees who play an active role in workplace practices and processes are more engaged, and that also means they’re more productive, creative, and inclined to stay with your company. This kind of technology is particularly helpful for companies with a sizable number of employees.

How Artificial Intelligence & Machine Learning is Helping

As anyone would have expected, AI and machine learning would have extended their disruptive footprints into human resource management as well. The huge data available, and the unendingly repetitive tasks, makes AI even more valuable here.

Think of the screening process, which used to rely on recruiters’ ‘gut feeling’ and subjective perception of what’s right or not. Now, there’s an automated approach for resume screening where an AI-enabled applicant tracking system scans for relevance in resumes, with clinical precision. Ideal describes how this works, and even adds that this automation saves companies up to 23 hours per hire.

Some public clouds even have ML training architecture that makes it easy to train models. Just a few patterns would leave duties like onboarding, learning, and career development to artificial intelligence. 

The same works for compensation, making it impossible for promotions or pay grade change to get delayed. And, of course, with the possibility of having wages and benefits automated, the AI does the human work of determining who should get what kind of compensation.

In this article on AI-based succession management, Ascendify explains that HRMS powered by AI and machine learning identifies the strongest potential leaders within an organization (without bias), and connects them to valuable development opportunities — automatically.

It’s a smart technology that matches skill sets to opportunities, alerting HR managers when candidates are ready for a bigger role, or providing them with qualified hands who can fill an empty position.

Conclusion

If your company still manages its HR processes manually, this might be the time to take another look at that, and explore how more efficient you could be when a chunk of the repetitive tasks are automated.

Vertex Software is a software engineering company in Austin, with 20+ years experience developing disruptive technology products

Whether you’re considering building proprietary software for internal HR management, want to make sense of your employee data, or want to see how ML/AI can help, we can help.

Send us a note here, and someone from our team would be in touch to discuss your needs.