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Technology Trends in HR for 2021

The trends in HR technology have been affected by the shift to remote work during the pandemic and the need to support essential workers.
2021 HR Technology Trends

In the midst of an ongoing pandemic, HR technology continues to serve as a key asset for HR leaders. The ability to disseminate information to a remote workforce is made easier when the proper digital communication channels are in place. Small businesses may also realize that now is the time to capitalize on trends in HR tech and upgrade their systems to help remain in compliance, effectively track time, process payroll, and maintain employee information. For larger corporate structures, advances in human resource technology are helping HR leaders become even more engaged in their company's overall strategy objectives.

According to results from the 2020 Paychex Pulse of HR Survey, more than 85% of HR professionals surveyed said that technology "has strengthened their contribution to corporate success," and more than 80% reported that their company's investment in technology "will allow them to maintain or grow their headcount and increase employee productivity."

What is HR technology?

This broad term encompasses a wide range of complex business functions – payroll, time and attendance, benefits, talent acquisition, and more – served by software and other forms of technology in human resources. From enhancements in artificial intelligence (AI) to a new generation of employee self-service and continued learning tools, this technology in HR management allows professionals to take on a more strategic role within their organization.

Technological trends in HR management 2020 - 2021

A variety of HR technologies are helping HR professionals manage their biggest challenges today, with other technologies soon to appear on the horizon. Here's a brief look into what's happening in the world of HR technology.

Artificial intelligence (AI) in HR tech

AI-enabled programs are increasingly playing an important role in companies recruiting and hiring processes. They can speed the process by which recruiters review and filter job applicants from vast numbers of resumes. AI can facilitate an analysis of the labor market, match skills and identify competencies, and can perhaps detect and mimic bias in posted job descriptions. Also, chatbots can interact with promising candidates prior to in-person job interviews, which can help reduce an otherwise time-consuming hiring process.

AI can also accelerate employee training and development through augmented reality and virtual reality, while also personalizing training content that matches an individual employee's learning capacity.

Perhaps just as importantly, AI tools can help HR professionals uncover potential reasons for turnover and possibly avert untimely departures by employees. This technology can help analyze a team member's web browsing patterns, email activities, and search patterns relating to pay scales and job postings. . However, employee privacy in electronic communications and device usage is a complicated area of law. An employer should strongly consider working with an attorney before engaging in any type of employee monitoring.

Self-service tools

Increasingly, employees want to own, access, and update their personnel information with an employee self-service (ESS) system, employees can perform a range of HR-related tasks without filing paperwork with HR. Depending on the specific ESS system, employees could:

  • Access online pay slips
  • View and print W-2 forms
  • Confirm employer-initiated employment status, rate of pay, and other changes
  • Update personal information
  • View federal, state, or local tax withholding information

Self-service technology may also allow leadership to communicate changes in health plan coverage, company holidays, and other time-sensitive information. It can also be useful in assisting employees who want to expand the range of their skills and knowledge.

The rise of self-service technology can be attributed, in part, to changing demographics within the workforce. According to research compiled in a 2019 Paychex white paper, "The Future of Work," millennial and Generation Z workers are increasingly requesting more options regarding accessibility to HR functions through self-service tools. As more workers have shifted to remote work during the pandemic, an ESS system can provide HR information faster and more efficiently. The implementation of this HR technology can result in a rise in employee engagement, thus benefiting the entire organization.

Employee wellness

Another significant trend in HR expected to stay strong in 2021 is attention toward employee wellness. Programs addressing employee health and work/life balance are widespread, with new momentum building to meet the physical and emotional needs of growing numbers of remote workers (and those who serve the company on a flexible work schedule).

The stress of shifting routines both at work and home may also prompt the need for additional mental health resources. Companies may want to allocate benefits dollars toward an employee assistance program (EAP). When adopted, managers throughout the company can refer employees  to this important benefit.

Video resources such as Skype, Zoom, and Microsoft Teams are proving to be highly effective resources for sharing wellness-focused webinars and fitness presentations to off-site employees. These workers can be updated via social media feeds on new in-house wellness initiatives and related efforts. This is a useful way to inspire and encourage these employees to participate in team challenges, leaderboards, and other social options.

HR technology challenges

In 2020 and beyond, HR professionals may continue to face challenges from both organizational leaders and the employees whom they serve. When considering new investments, consider technology that supports both remote workers and those in the office. Using technology to facilitate faster, more informed decision-making throughout the company may be even more urgently needed in the next few years.

Hiring and retaining workers

Employers must identify and recruit the types of qualified job candidates they most urgently need. These days, it's not just a matter of locating individuals with the appropriate degree, skills, and experience. It's vital that these candidates prove to be a good fit with the organizational culture as well.

The challenge doesn't stop there. How can employers retain their best workers? What approaches to employee engagement are the most successful?

Helping employers reach the right candidates

A key technology resource for successful recruiting and hiring is a customized applicant tracking system. This technology is often designed to ensure that qualified candidates don't slip through the cracks. It can streamline the process by making it easier for job candidates to submit their materials online, which in turn can enable hiring managers and HR professionals to better access the information they need from a single interface.

An applicant tracking solution can also:

  • Standardize the processes for job postings, interview scheduling, and hiring workflows for more efficient, consistent results.
  • Improve accuracy and time savings for HR and applicants alike (saving employers more money with each new hire).
  • Enable job seekers to submit applications anytime through a mobile phone or from a desktop computer, and then log into the system for an update on their application status.

Advanced recruitment software can also strengthen a company's internal application process, so more candidates have an opportunity to find your open position.

Demands for faster –decision-making

Increasingly, companies depend upon data to make key operational decisions. With HR analytics, businesses can identify areas of exposure to risk and help devise effective solutions. Investment in analytics technology also eases the process of linking company data to critical decisions made around staffing, compensation and benefits, scheduling, and so on. It paves the way to a deeper understanding of which processes work well and where improvements are needed. As we've seen with the pandemic, the work environment can change quickly. The ability to ingest new information, predict its effect on the business and make the necessary changes may ultimately be the key to some companies' survival.

Helping HR professionals make more informed decisions

HR data analytics provides HR professionals with stronger, more accurate data collection and reporting — the type of information needed to make sound business decisions. Examples range from a business unit manager's need for the latest information on time and attendance, so they can decide how to streamline the scheduling process, to a quick audit that helps an HR manager decide how to address a payroll-related problem.

Administering benefits that workforces want

The range of benefits offered by a company is often a key element in both new employee hires and effective employee retention. In this era of competition for the best talent, candidates demand not just the best traditional benefits package, but also a variety of non-traditional benefits and perks (i.e., telecommuting or access to a fitness facility). During COVID-19, companies will be forced to rethink some of the traditional in-office perks such as free coffee or rail passes to assist with commuting costs. The extra benefits dollars may be reallocated to benefits employees need during these difficult times, such as an employee assistance program.

Even in the best of times, benefits administration can be an area where the abundance of data can feel overwhelming, if it's improperly structured. On the other hand, effective benefits management technology can efficiently provide and monitor all types of benefits packages, better positioning a company and its HR team for success.

Technology also identifies which benefits are currently being used and viewed as desirable by the workforce, and which benefits are underutilized. Additionally, this data-driven approach helps companies gather the information needed for effective compliance reporting.

Performance management and continued learning

New performance management techniques are transforming the way businesses conduct employee reviews and goal-setting. These changes reflect the ongoing need to prioritize employee development, ensuring that skills are up-to-date and that employees continuously learn and better understand the culture in which they operate. As the workplace changes, HR technology provides a more efficient means of adjusting performance management metrics.

HR tech's impact on performance management and continued learning

With many companies rethinking large gatherings due to the pandemic, company-wide trainings may have suffered. Learning management software can be a solution to providing remote access to online courses that enable businesses to achieve their performance management and continued learning objectives. This learning management system (LMS) technology often incorporates:

  • Advanced digital user interfaces for online training courses for both on-site and remote workers
  • Selections from training course libraries customized for specific industry or workplace demands
  • Enhanced content such as easily imported videos and valuable third-party content from other providers

HR technology that reinforces employee training as a top priority can help ensure that all employees, regardless of their physical location, remain engaged, focused, and are continually honing their skills. This in turns often leads to improved employee retention for a business.

HR technology trends for a Post-COVID-19 future of work

Some HR trends involving technology that have emerged as a response to the pandemic may in turn seed longer-term shifts in the workplace. Many companies were forced to increase their investment in technology simply to stay up and running during the pandemic. This new technology may be further leveraged to make companies more resilient in the future and better adaptable to crisis. Some of the more visible impacts of COVID-19 include the following:

Increased focus of HR personnel

Technology can be a great resource for everything from recruiting new employees to recording time and pushing out communications, but some areas of HR will always require trained professionals. Salary negotiations, the mediation of conflicts and strategy setting may be areas of focus for HR personnel, while ramping up HR technology can help cover areas like new-hire training, time tracking, and benefits administration.

Shifting to a remote organization

For many companies, the pandemic caused an immediate shift to remote work. This illuminated gaps in technology services, where further investment was required. For example, job interviews and much of the hiring process may have previously taken place in the office. When this was not possible due to lockdowns or travel restrictions, many companies completed the interview process via teleconference.

New-hire training and onboarding are additional HR functions that might now be taking place online more. As restrictions ease, it's up to the company to decide what efficiencies have been gained by the additional investment in HR technology and which parts of the company could possibly continue to operate remotely.

Supporting essential employees

Providing employees with a safe work environment and adapting to changes brought on by the pandemic are some of the most critical challenges facing HR professionals today. During a pandemic, those considered essential workers are not necessarily sitting in the executive suite, but also include hourly workers on the front lines. These essential workers may be unable to work remotely and their health and safety remains a top priority. Businesses are increasingly seeing the benefit of leveraging HR technology to support essential workers and ensure the continuation of their benefits and wages.

Guiding new business strategies

In the future, HR technology can help guide further shifts in company strategy by identifying critical skills that may be called upon as needed. For example, manufacturing companies may have shifted away from their traditional products to help meet the demand for personal protective equipment for health care workers. If a company must adapt a business line due to changes beyond management's control, identify and leverage the versatile skills of current staff members  to help take the business in a new direction. In this way, a business can achieve a greater chance of long-term success.

Using HR technology to help fuel success

As change continues to impact businesses, HR professionals must identify and implement solutions that can help address challenges affecting both the workforce and the company at large. Learn more about how effective HR technology can work in organizations like yours.

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* This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up-to-date.

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