The Power of HR Tech

How businesses are leveraging technology in the field of HR

5 min readFeb 8, 2021

In today’s digital landscape, the domain of human resources (HR) is undergoing a massive transformation. Many organisations are incorporating technology in their HR operations, leading to a trend of HR-tech. In simple words, HR tech uses a host of software solutions including artificial intelligence (AI) and machine learning (ML) to gain key insights from data, to drive the HR processes.

The application of technology in HR is a strategic advantage for companies as it improves resource efficiency, creates transparency in business processes, ensures a hassle-free user experience as well as contributes to creating a positive work culture.

Some of the areas in HR where technology is being applied are:

1. Automation of Routine Tasks:

Organisations are using enterprise resource planning (ERP) software to automate the routine administrative tasks that constituent a lot of manual data entry work such as payroll management, invoicing, leave scheduling, etc. An ERP system consolidates all the employee information across departments in one place, keeps a track of records as well as updates them automatically It minimises the risk of data redundancy and duplicity and ensures that the data can be accessed quickly. This allows the HR managers to focus on areas of strategic importance rather than spending time on mundane tasks.

2. Talent Acquisition:

Businesses are using AI to screen the applicant pool and rate the candidates on their skill set and potential fit. This saves a lot of time as the system shortlists candidates for the initial rounds and the recruiters need not manually go through all the applications. Usually, in the absence of technology, it is possible for recruiters to miss out on top talent because of the large number of applications. However, with the use of AI, the chances of this happening are negligible because the system is equipped to handle and process large volumes of data. The integration of ML, allows the organisations to understand the candidates better with every hiring cycle. Many AI systems also come with built-in diversity compliance that allows companies to meet their diversity goals.

3. Digital Onboarding:

Companies are using AI to create templates of offer-letters, conduct background checks, and deliver the onboarding paperwork. The use of AI makes the usually long and tedious onboarding process more employee-friendly. Chatbots guide the new employees through every stage and help in collecting information in a seamless way. Organisations also create gamified environments based on AI, as a part of the training program for new joiners to help them understand the business setting and their responsibilities.

4. Internal Talent Management:

Corporations use software tools to track the performance of their employees as well as generate automated feedback. The system generated reports allow the managers to identify best performers, under performers, skill gaps etc. The platforms are also equipped to develop employee-specific learning plans and content to assist in developing and retaining talent. AI is also used to create a customised career progression path for internal management. In addition to this, digital wellness apps and platforms are used to monitor the mental health of employees. Data analytics is used to scan the data gathered from the employee feedback for certain keywords like ‘burnout’, ‘stress’, ’depression’ etc. and predictive analytics is applied for risk assessment for every employee. Based on the risk profile, the employees are guided on the future course of action, like taking time-off, seeing a licensed therapist etc.

HR tech can address some of India’s unique challenges. In India, with a population of nearly 1.3 billion, recruiters receive hundreds of thousands of applications for a single position. Technology can be used to filter out the resumes, making the process quicker. Additionally, tech-enabled hiring platforms have been developed that work even with an intermittent internet connection. Companies can use them to hire from emerging markets and tier-2 cities. In a country like India that has 22 languages, software solutions can be adopted to transcend the language barrier. Messaging apps based on AI and ML can support immediate in-line translation, useful for internal communication in organisations.

In recent times, the interest in the HR tech space is growing rapidly. One of the reasons is the evolution of the gig economy. When companies employ people on a contractual basis, they need to invest more in hiring and training to ensure quicker onboarding and delivery of results. In such cases, tech interventions, applied especially to last- mile training can bring down costs significantly.

The central government’s announcement in the Union Budget 2021, to extend social security to gig and platform workers will increase compliance for on-demand startups and further provide an impetus to this sector.

Another key reason for the buzz in the area of HR tech is the Covid-19 pandemic. As remote working has become the norm, companies have realised the significance of developing technology aided HR solutions.

A PwC report estimates the global HR tech market to be around $148 billion. According to research by Statista, the revenue generated worldwide in the HR tech market amounted to nearly $ 47.5 billion in 2019 and the figure is predicted to increase steadily in the following years, reaching a total value of $ 90 billion by 2025. Today, the HR tech space has immense potential and investors as well as organisations must seize this opportunity and make the most out of it.

-Sanika Tapre

(Sanika is a Youth Fellow at MCCIA.)




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