An HR technology strategy is crucial for unlocking the maximum potential from available talent pools and staying compliant with changing labor laws. However, satisfaction with HR tech vendors has declined by seven percentage points, even as more than half of companies plan on increasing their HR tech investments. Read on to learn how to optimize your HR technology strategy for the best outcomes.
What is an HR Technology Strategy
If you don’t have a well-articulated HR technology strategy in 2024, you will find yourself reacting to change and getting caught in the crossfire as it gets difficult to catch up with the intended outcomes.
An HR technology strategy is a comprehensive plan outlining how an organization will leverage technology to streamline and enhance its human resources processes and functions, including payroll, recruitment, employee engagement, performance management, and workforce planning.
It involves identifying the HR challenges and objectives of the organization and then determining how technology can be effectively employed to address those needs.
When formulating an HR technology strategy, you need to plan for:
- Needs assessment: Evaluating the current state of HR processes, identifying pain points, and determining areas where technology can provide the most value.
- Goal definition: Setting clear goals and objectives that align with the organization’s overall HR strategy and business objectives.
- Technology selection: Identifying and selecting appropriate HR software, tools, and systems to support the identified needs and goals effectively.
- Integration: Ensuring seamless integration of the chosen HR technology solutions with existing systems and processes within the organization.
- Data management and analytics: Developing strategies for data collection, storage, analysis, and reporting to drive informed decision-making and enhance HR effectiveness.
- User adoption: Planning and executing change management initiatives to ensure successful adoption and utilization of the HR technology by employees and HR professionals.
- Continuous improvement: Establishing mechanisms for monitoring the effectiveness of the HR technology strategy and making necessary adjustments over time to ensure ongoing improvement and alignment with organizational needs.
The Pillars of an Effective HR Technology Strategy
The success of your HR technology strategy will hinge on four pillars:
1. Employee experience
The first pillar focuses on enhancing the experience, engagement, and productivity of employees through the use of HR technology. This involves implementing user-friendly and intuitive systems that improve employee experience throughout their lifecycle within the organization. The goal is to provide self-service options, timely access to information, and tools that enable employees to perform their tasks efficiently and effectively.
2. Change management
HR teams must understand how the technology will impact (and disrupt) individuals and teams and then create strategies to facilitate a smooth transition. This may include communication plans, training programs, and support networks to ensure employee buy-in and adoption of new systems and processes.
3. Leadership buy-in
Senior leaders must understand the value and benefits technology can bring to the organization and actively support its implementation. This pillar also involves establishing key performance indicators (KPIs) to measure the return on investment (ROI) of the HR technology strategy. Tracking cost savings, productivity improvements, and employee satisfaction metrics can help demonstrate the strategy’s effectiveness and guide future decisions.
4. Cross-disciplinary transformation
The fourth pillar recognizes that implementing an effective HR technology strategy requires collaboration and involvement from various departments beyond HR. It breaks down silos and fosters cross-disciplinary partnerships between HR, IT, finance, and other relevant departments to align technology initiatives with overall business objectives.
Understanding HR Technology Trends
As CHROs and business leaders envision their technology plans for the upcoming quarters, three specific trend categories must be considered at varying levels of priority:
1. Table stakes
- The cloud: The cloud has become a foundational technology in HR, enabling easy access to data, scalability, and flexibility. Cloud-based HR systems provide cost-effective solutions for managing employee data, recruiting, onboarding, performance management, and more.
- Workflow automation: Automation of HR processes through tools such as chatbots, robotic process automation (RPA), and workflow management systems can streamline administrative tasks, reduce errors, and free up HR personnel to focus on strategic initiatives.
- Remote working tools: With the rise of remote and hybrid work, HR technology that supports virtual collaboration, communication, and performance monitoring has become essential. These tools enable effective remote onboarding, team collaboration, video conferencing, and productivity tracking.
2. Value addition
- People analytics: People analytics leverages data and analytics to gain insights into HR-related metrics, such as engagement, retention, talent acquisition, and workforce planning. Using sophisticated algorithms, HR professionals can make data-driven decisions to optimize HR strategies and improve overall business outcomes.
- Artificial Intelligence (AI): AI-powered HR technology encompasses applications like talent sourcing and screening, virtual HR assistants, and personalized learning. AI automates repetitive tasks and incorporates a sense of personalization and the “human touch” in your HR technology strategy.
- Business app integrations: Integrating HR systems with applications such as CRM or project management tools enables seamless data exchange. This improves cross-functional collaboration and enhances the overall efficiency of HR operations.
3. Future trends
- Blockchain: Blockchain technology has the potential to revolutionize HR processes such as background checks, credential verification, and payroll management. Its immutable and intermediary-less operation can enhance data security, integrity, and transparency.
- Immersive technologies: Virtual reality (VR) and augmented reality (AR) are finding applications in immersive onboarding, training simulations, and virtual collaboration. These technologies can enhance engagement, knowledge retention, and skill development.
- Internet of Things (IoT): IoT devices, such as wearables, can provide valuable data for employee well-being programs, safety monitoring, and workplace optimization. IoT-enabled HR technology can enhance safety and productivity in complex working conditions while enabling proactive interventions.
Account Based Marketing Examples
There are some examples of account-based marketing that are worth exploring and perhaps implementing if it fits within the scope of your company or brand:
Personalized Email Communication:
While this is a little tricky, it can be one of the most effective ways to implement ABM.
Social Media Conversations:
Many B2B professionals will post about the challenges they are facing. If you’re inquisitive enough, you can address these by delivering beneficial content.
You’ve likely never engaged with all the decision makers within your target accounts. The best leverage you have to do this is to ensure your data is bountiful and accurate.
We live in a digital world but sending a customized gift via direct mail to your target accounts could not only make their day but help you make the sale.
Gather as much information you can about the people within your target account and run creative stories matching your brand to their company to show why you’re right for each other.
In Conclusion: Being Mindful of Data Security and Privacy in HR Tech
Data security and privacy are critical for your HR technology strategy. It’s all about keeping sensitive employee information safe from unauthorized access, loss, or theft by using encryption, firewalls, and access controls to ensure that data is protected and kept confidential.
Bear in mind privacy regulations like GDPR and CCPA, which ensure that personal information is handled transparently and legally. These regulations also emphasize principles like limiting the purpose of data collection, minimizing the data collected, and obtaining proper consent.
In 2023, 80% of HR professionals said they had witnessed lousy data management. As organizations gear up to re-envision their HR technology strategy for the upcoming months, these will be critical considerations while pursuing the tangible gains from HR tech.
For more insights on crafting a future-ready HR technology strategy, read the latest Paychex whitepaper covering the 7 Key Factors for Choosing the Best HR Technology.