Published by Guests, on 01/09/2018
By Randstad Workforce-insights
The HR tech industry is growing exponentially. In 2016 alone, investors pumped more than $1.96 billion into HR tech companies around the world. As a result, the number of new recruitment, talent management and other HR tools hitting the market is growing by the day. This wave of next-gen HR tech uses data analytics, machine learning, AI, advanced automation and other disruptive technologies to refine existing tools and create innovative solutions with the potential to transform talent management — and, most importantly, give companies a significant edge over their competition.
Forward-thinking enterprises have already undergone digital transformation to take advantage of the cloud; the IoT; and anywhere, anytime, any device access. That’s why for many, purchasing and implementing next-gen HR tech seems like a logical next step. However, before making the decision to invest in new HR technology, it’s essential to gain a comprehensive overview of its potential impact.
Industry 4.0 is undeniably a critical time for HR and procurement. The ongoing skills shortage in a business environment that calls for constant innovation has made it increasingly clear that human capital is key to competitive positioning. Consequently, a growing number of business leaders no longer see HR as simply an administrative function, but as a strategic partner the company relies on to deliver quality talent.
Likewise, with the majority of CEOs focusing on cost reduction, procurement plays a key role in driving profitability and growth. When it comes to investing in HR tech, procurement isn’t just responsible for containing costs and mitigating risk; it also has to ensure that any investments are relevant to the organization’s long-term strategy.
However, next-gen HR tech is already disrupting the HR space and will continue to do so for the foreseeable future. Many HR professionals are afraid that chatbots and other AI-driven tools will take the “human” out of human resources, resulting in an impersonal experience for job applicants. Another fear is that advanced automation will eliminate HR jobs and other occupations, although it’s initially more likely to replace tasks and therefore change job responsibilities.
At the same time, next-gen HR software changes how companies connect with and manage talent, as well as how they create their workforce strategies. It can be used to optimize recruitment processes, enable mobile integration, tap into cloud-based talent pools and enhance employer branding, amongst other things. Yet companies can’t take advantage of new technologies unless they have access to talent with the right skills. Furthermore, deploying these new solutions could trigger unforeseen organizational change — and companies need to be prepared to manage that change.
With so much at stake, the challenge for both procurement and HR is how, in this uncharted landscape, to strategically harness HR tech for organizational success and select the best investments for their companies. Understanding the risks and advantages involved is crucial to this endeavor.
Understandably, all producers of HR tech solutions promise significant business benefits. However, there are risks involved with adopting new technologies — and they aren’t always caused by the software. Companies need to be aware of the following risks:
Despite the possible risks, next-gen HR solutions also offer significant advantages. This is especially relevant to companies that are looking to expand internationally and preparing long-term talent strategies for the next three to five years. Here are some of the most interesting developments in HR tech, along with their potential benefits:
Next-gen HR tech will clearly play a pivotal role in the future of talent acquisition and retention. That’s why it’s critical for HR and procurement to make a careful assessment of the organization’s needs and perform a value analysis of the available products before making any purchase decision. Considering the growing volume of new HR apps, it’s also advisable to obtain expert support from a strategic workforce partner that not only screens new tools to select the best ones, but also applies its knowledge of the labor landscape and HR methodologies to help the company make strategic choices that support its long-term operational goals.
(This article was originally published on randstad.com/workforce-insights)