In the first scenario, joining the C-suite at progressive companies are savvy HR executives who are strategic thinkers and doers, and whose decisions ultimately affect how the business competes for talent. Tech tools and access to data empower these HR departments to track their progress and save costs using sophisticated data and metrics—and they free staff from administrative tasks that have traditionally been a drag on HR professionals’ daily workload.
For the other, less technological HR functions, and what still is true at many small and midsize companies, the department spends its time processing forms and pushing paper. These professionals are inundated with time-consuming tasks—and will remain so until they adopt the right tech tools and digitize their operations.Results of a recent survey by Harvard Business Review Analytic Services of 207business executives at large and small firms help explain the roadblocks to this transformation for HR.
The survey found that despite the potential benefits of technology, most HR departments have not adopted the tools that can help streamline their processes. Budget restraints and technology shortcomings may account for low adoption rates among human resources departments. In an increasingly digital world, though, HR professionals should embrace technology to help their organizations compete for top talent, become more tactical in their thinking, and gain a seat at the table. This paper explores the current HR landscape and what’s in store for the future, what stops HR from adopting tech tools, and how technology and access to data have made work more efficient in some instances yet cannot totally replace humans in others.
“HR could do a better job of telling their story through data,” says Brian Dineen, professor of management at Krannert School of Management atPurdue University, one of the country’s top schools for HR degrees. “Big data is a way to help them explain that they aren’t just administrators, but really that they can demonstrate and add value to the company and contribute to the bottom line.”
Technology Is an HR Time-Saver
HR professionals who adopt technology can, unsurprisingly, reap big benefits.According to the survey, 39% of respondents indicate that technology has had a positive impact on recruiting, hiring, and onboarding practices at their organization, and a combined67% say technology has some what increased (42%) or significantly increased (25%) HR’s ability to find and hire the right candidates. FIGURE 1The survey also shows that technology handles repetitive, high-volume tasks better than humans can.
Sixty one percent of respondents say that technology is more adept at screening resumes, and 82% favor automation over a human to conduct a skills test assessment. FIGURE 2Technology is especially helpful for companies like Compass USA, which, at times, needs to fill thousands of hourly wage jobs in food and support services—and fast. For some of these job seekers, the application, interviewing, and onboarding processes are facilitated almost entirely on their smartphones.While an all-automated hiring process represents less than three percent of the company’s overall hires, saysCompass USA’s director of employment screening, Brian Troxler, it’s important because it showcases technology’s ability to help HR with hiring from soup to nuts.
“The first time they see a human is when they meet their manager on their first day,” he notes.That gives a much-needed boost to a company the size of Compass USA, which in 2018 employed 265,000people and whose workers served 10million meals. Veronica Chimney, senior vice president of HR at Etech GlobalServices, a provider of inbound and outbound voice and live chat services, says technology helped her company hire 40 new employees in just two weeks. To screen applicants quickly, Etech used technology toad minister and grade typing tests for applicants. HR professionals then worked with the technology to assess applicants’ knowledge of computers, grammar, and math.
Technology can relieve the drudgery from jobs that used to take HR countless hours by finishing up some tasks in minutes. In fact, one of the biggest challenges an organization faces in hiring and onboarding is handling too many tedious tasks, such as opening envelopes with cover letters and resumes and then reading and ranking the applicants, say 41%.Thirty-eight percent cite an inability to streamline the whole hiring process from end to end as another major challenge for HR. In too many HR departments, professionals are overburdened with tasks that prevent the streamlining of their processes and keep them tied down. But when resumes and cover letters are processed by an applicant tracking system (ATS),which uses keywords and years of experience to rank the candidates, a job that previously took multiple HRstaffers days to complete is now done automatically in minutes.
The Current State of Tech in HR
When asked about technology use in their HR departments, half of the survey respondents say their HR uses between one and three tools, and 24%say between four and six. A further breakdown from the survey shows which tech tools HR departments are adopting—and the numbers reveal just how far they must go to achieve full saturation. The highest number, 38%, use tools and software to facilitate telecommuting and flexible work schedules for the organization’s employees; next, 36%use technology to arrange interviews; 33% use technology to scan resumes and rate candidates; 30% use technology to conduct background checks; and 29% use technology to conduct online audio visual interviews.
Paper Forms Still Appearin the HR Process
Despite the known benefits of technology tools, the survey found that they are not used universally inHR departments. In fact, only 31% of respondents say that technology is embraced by HR at their organization.And a 2019 survey by global research and advisory firm Gartner found that nearly 80% of U.S. HR departments don’t have the tech needed to do their jobs, despite a desire by senior executives to build a digital workplace.Some HR departments even still rely on paper applications, according to Caroline Ceniza-Levine, co-founder of the professional coaching firm SixFigureStart and an HR consultant.Another HR professional, who works at a large holding company, says her department uses paper, too, to process background checks. The company wants to keep its tech systems uniform throughout, and since only the HR department needs background checks, there is scant incentive to bring in the technology. Applicants at that company must fill out a form by hand, scan it, and email it back to HR. “It’s very old school,” she says.
Tight Budgets HamperTechnology Investments
The rising cost of technology can be an obstacle, especially for some small and midsize companies. HR budget dollars become especially precious when faced with the sky-high cost of tech. Forty one percent of survey respondents cite cost as a top hindrance to acquiring technology for HR at their organizations. Even when companies are willing to buy a new system and have the funds to do so, they may be unable to act quickly. Those in charge of buying tech must engage in comprehensive due diligence, which can involve endless rounds of multiple approvals before a final decision is made.
“We are always budget-conscious. Funding for any new technology will need to be justified by driving efficiencies, for HR teams, operators, and candidates,” saysCompass Group USA’s Troxler.“High concern” is how an HR professional for a children’s educational technology product describes her view of costs for technology investments.“Our spend is usually under a microscope, as HR is not revenue generating,” she notes.
While costs are also foremost in the mind of Etech Global Services’Chimney, her firm found a thriftier solution. “The recruitment landscape is complex, dynamic, and ever-changing. Our internal development team has built software for the company, and this has proven to be cost-effective.The systems and processes allow us to post and fulfill hiring needs, improve our application communication, and facilitate streamlined data collection, while tracking and analyzing our budget.”
According to Brian Kropp, chief of research at the HR practice of Gartner, in 2019, U.S. HR departments spent 9% of their budgets on technology, a number that’s been static for three years. The figure includes 7% of the price tag for the technology itself and support for the HR tech to use it, and2% on HR analytics. Whatever an HR department’s budget is, the onus is on the department to “build a business case” for more generous allocations, maintains JohnHealy, vice president and managing director at the specialty talent company Kelly.“Every organization has got investment resources,” he adds. “The opportunities that offer the greatest impact on business results will move to the top of the list.”
Tech Tools Changing the HR Function
For HR departments embracing technology, the ATS, which guides candidates through the application, screening, and interviewing processes, is the linchpin. According to Job scan’s 2019 Fortune 500 ATS study, over 98%of those top companies use an ATS.An ATS can help HR by reducing a pile of resumes and applications to a manageable stack. In some cases, 1,000applications can be whittled down to the top 10, ranked by the most qualified candidates. The ATS is programmed with key words, like professional experience, education levels, and specific schools and majors. Some of the better applicant tracking systems also facilitate the onboarding of a candidate.
An ATS also helps HR attract new pools of talent by using data-driven job distribution capabilities to broadcast openings on job boards and social media networks. Among those pools are mothers who’ve left the workforce but want part-time gigs, veterans and individuals with criminal records who are reentering the workforce, and diverse applicants from all different backgrounds. Such candidate-sourcing tools cast a wider talent net and even tap into groups of “passive” candidates who aren’t actively seeking new jobs.Technology is more efficient, too, for background checks. Traditional background checks have been largely manual and process-heavy, involving extra staff time and paper forms.Nowadays, companies can automate their entire background check process and give their applicants a seamless, mobile-friendly experience. Some background check systems can also review charges and filter them out based on how relevant they are to a specific role, which allows HR to access a wider pool of talent and welcome more qualified candidates. Another technology helping HR is video, which allows candidates to answer a list of questions by videoing themselves via their smartphones and sending the video to the company.When used effectively, this tool standardizes the interviewing process, leaves candidates with a positive impression of the company, and reduces the time it takes to hire.Leigh A. Harris, the talent director at energy multinational Phillips 66, isa fan and calls it an “excellent tool”
to streamline the screening process, which “significantly reduce[s] hours spent on phone screens, and also enables distance interviewing, which helps save time and travel costs. Applicants can use smartphones or laptops to access a link to questions they answer in a video, which is then accessed by the hiring team for assessments.”Chatbots, which are computer generated systems that mimic human interaction online, are used by HR functions to answer basic questions an applicant may have about the job and update them on where they stand in the hiring process. Employees use chatbots for tasks like determining the number of vacation days they have accrued or what their dental plan covers. “Chatbots can be a great tool fora soft interview,” says Jaydev Sanghavi, executive director at Aarvi Encon Limited, a recruiting and outsourcing company in India. “In addition, an employee grievance call can be handled well with a chatbot, which will help resolve at least 50% to 60% of grievances.”“Chatbots represent an early use case where AI [artificial intelligence] can significantly improve response time and personalize the experience,” saysKelly’s Healy. “In our consumer lives, we expect to get a response back right away, so as candidates or employees, we expect the same, and chatbots, when deployed right, do that.”Other technologies help HR manage payroll, performance management, employee reviews, and compensation to measure the way a company pays its employees against the market and its own compensation philosophy.
Knowing Technology’s Limitations
While technology tools can be helpful to HR, they are not a panacea, say experts. A common complaint about technology from HR professionals is that some systems don’t talk to one another, which creates extra work for staffers to connect data and streamline processes.“What I wish the ATS did better was ‘speak’ to the HRIS [human resources information system], which houses employee data,” says MechelleMonroe, human resources director atEDTech company BrainPOP. BecauseBrainPOP hires worldwide, Monroe adds that an ATS that factors in data privacy restrictions for each country would also save the teams time in information sharing. Phillips 66’s Harris uses an ATS, but notes that her team “some times find[s] that qualified candidates are screened out because applicant scan misinterpret a question or are too modest in their answers and are screened out for not meeting minimum requirements.
“These [applicant tracking] systems are necessary and effective tools for any recruiting team to manage their company’s requisitions,” she adds.“I’ve found that some of the newer AI screening technologies and sourcing bots are geared toward high-volume, low-complexity hiring environments, but that’s not us.”Chuck Feltz, CEO of the Human CapitalInstitute (HCI), flags biases embedded in technology. “If you look at things like AI and machine learning and how the algorithms are constructed, you have the potential for built-in bias,” says Feltz. “[The technology] is typically looking at historical data, so bias in the historical information can create bias in the outcome.”“Unchecked, this can have negative impacts on things like inclusive hiring practices. As an example,” he adds,“given the lack of historical diversity in hiring practices and corporate career progression, that data might skew to someone who looks more like me [a white male] than you [a female], and that would not align with the intended outcome.”
In some cases, however, technology can help by judging applicants based solely on their work. According to a study published in the Journal of Applied Psychology, researchers Michael C. Campion and Michael A.Campion found that computer grading of essays needed for personnel hires did not disadvantage, that is, did not discriminate against, minority applicants, as it surveyed the work of all applicants equally.
Human Resources Still Needs Humans
Though technology may be faster and more efficient at some things, some HR responsibilities are better left to humans. Any situation that requires judgment, nuance, and creative problem-solving is best handled by an experienced HR professional. This includes one-on-one job interviews, in which temperament and fit can more easily be determined face-to-face. Personnel issues and investigations, such as potential cases of bullying and sexual harassment, must be handled with a great deal of sensitivity and shouldn’t be left to automation. Survey respondents agree. An overwhelming 96% say that anHR professional beats out tech in interviewing candidates, and85% favor an HR professional over tech in follow-up questions from applicants.
These very human skills and insights also play into how to select a candidate for further interviews or to be hired.“I interpret a resume, look at the jobs they’ve held and the progress of their career—at exactly what they’ve done,”says SixFigureStart’s Ceniza-Levine.“It’s stuff that you can’t easily do a keyword search for. I don’t know that there’s anything like that [in tech], butt hat’s what I imagine the future will hold. That would be super helpful.”The numbers from the survey also reflect this hesitancy toward letting tech take over the hiring process inits entirety: Only 25% of respondents say their organization has realized the benefit of technology more quickly narrowing down the best candidates to present to senior HR managers. Just 25% say their organization has realized the benefit of technology zeroing in faster on top applicants to present to hiring managers.
Conclusion
Technology allows the HR function, and the chief human resources officer, to become a more strategic player among senior leadership. Because tech tools can free HR staff from time consuming tasks, there is more time and space for HR to act creatively and think strategically about helping the organization find top talent and increase employee happiness and productivity. The right technology also gives HR metrics, so they can show senior leadership through data that various HR initiatives are benefiting the strategic mission of the company and also saving time and money.“[In the next three to five years, technology is going to reshape HR inits entirety,” says HCI’s Feltz.
HR departments traditionally have been thought of as a backwater by those in the C-suite, principally because they don’t generate revenue. Now, though, technology’s reach and access to new insights are spearheading HR’s changes.“Data and the effort for every organization out there to become more objective in the data-driven decision making process is a great way for those[in HR] who are looking to leverage technology to demonstrate that they have modernized their approach,” saysKelly’s Healy.Organizations for HR professionals and universities are training future HR professionals for more strategic roles. Purdue’s Krannert School, for example, is turning out students with Master ofScience in Human Resources degrees that promote critical thinking and ways to develop analytical skills. HR’s technology revolution is just beginning, and, despite lower adoption rates, many executives realize the benefits of using tech tools to find and retain top talent. Overcoming budgetary challenges and recognizing that technology can’t fix all of HR’s problems are first steps to transforming the role of HR to become a key advisor for the organization. Jill Goldstein, global practice lead for talent and HR operations at management consulting firmAccenture, says in the Society forHuman Resource Management’s publication HR News, “I can envision a future where HR professionals are no longer thinking that their job is to stay on top of current HR trends, button reposition [themselves] to become workforce advisors.
