HR Tech Market in 2023 appears to be very different from the enthusiasm that surrounded the sector at the start of 2022. This is primarily due to a catastrophic failure in the overall macroeconomic environment, with inflation at decades-high levels and interest rates significantly raised in response to inflation fears. When combined with central bank quantitative tightening, this has resulted in a so-called funding winter, with start-up valuations falling across the board and venture capital becoming much pickier.
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HR technology exploded in late 2020/2021 as CEOs realized that strong HR practices and overall employee well-being were critical to a company’s bottom line. Employee mental health, engagement, and retention became key metrics against which HR professionals were evaluated.
Some trends that began during the Covid pandemic will continue as the world enters a post-Covid state in 2023. Emerging technologies can help companies stay ahead of the curve in terms of employee experience. In our previous post we discussed top HR tech trends that transformed business culture in 2022.
In this article, we’ll look at the top 8 HR tech trends that will be shaping the future of human resource management in 2023.
Automation powered by AI
According to 96% of senior HR professionals, artificial intelligence (AI) has the potential to significantly improve talent acquisition and employee retention. Human resource (HR) management is one of the top features that can gain from intelligent automation as companies turn to hyper-automation as a new approach to digital transformation. Intelligent automation can help with the following HR processes:
Processes of recruitment: AI-powered bots can collect and screen resumes, direct qualified candidates to the next stage of the hiring process, and send personalized emails to rejected candidates.
Onboarding: Intelligent bots can empower self-service onboarding by creating email addresses and user accounts automatically, allowing access based on role, and mailing onboarding documents to the new employee.
Performance management: Bots can gather employee performance data from disparate company systems for data-driven analysis.
Payroll processing: Bots can collect data from login systems and use it to calculate overtime compensation and commissions, and create reports on various payroll statistics.
Offboarding: Exit documents and exit surveys can be generated by intelligent bots.
Improve HR decision-making
Business processes generate massive amounts of data, which machine learning models can use to perform people analytics and delve deeper into employee and HR performance. Among the metrics are:
- Time to complete
- Competency analytics
- Rate of retention
- Rate of replacement
- Cost per hire
Furthermore, by utilizing data generated directly from business operations, such as event logs, incident records, or audit trails, process intelligence techniques such as process mining and digital twins enable organizations to:
- Recognize the trends, patterns, and discrepancies of various business processes in real-time
- Visualize the current status of processes
- Reduce errors and opportunities for improvement
- Determine the potential for automation of business processes or specific tasks
Boost productivity while reducing HR staff workload
HR processes can be repetitive and exhausting, from hiring and onboarding new employees to tracking employee performance. HR departments, for example, spend roughly half of their time responding to the same questions and providing procedural data.
Virtual assistants or chatbots, which are based on technologies such as conversational AI and natural language processing (NLP), assist organizations in automating mundane HR tasks such as:
- Organizing candidate interviews,
- Responding to job candidate inquiries,
- Answering employee questions about benefits or policies,
- In absence management, leave requests are processed.
Chatbots can free up HR teams’ time to focus on tasks that require human judgment and conversation.
Furthermore, virtual assistants can be implemented across a variety of platforms that employees are already familiar with, such as web chat, mobile chat apps like WhatsApp, or voice assistants. This means that they require less modification when incorporated into existing workflows.
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Cloud-based HR systems are becoming increasingly popular among businesses, particularly among younger employees who are acquainted with working almost entirely online. Cloud software, which is hosted on servers and easily accessible by authorized users, provides real-time access to secure company and personnel data from virtually any location.
Other cloud-based advantages that are becoming increasingly popular include:
- The ability to use HR analytics to enhance prior recruitment experience and develop new systems to attract job candidates
- A thorough training program that includes employee access to company materials
- Improve employee satisfaction by allowing them to utilize self-service portals and chat functions
- The ability to narrow down individual employee peak performance and appropriately reward their efforts
An efficacious cloud-based HR system also lays the foundation for future workforce expansion. As the company expands, this automated technology can be expanded to meet the increased demand for more employees.
Blockchain: Improved verification and cybersecurity
The blockchain is a distributed storage system that records and verifies transactions while safeguarding data from unauthorized changes.
Blockchain technology is a longer-term trend in HR technology, with Gartner expecting it to reach mass adoption in more than ten years.
As of now, the foundational use cases of blockchain in HR are:
Background checks: Without having to wait weeks for manual checks to be completed, recruiters can accurately determine the authenticity of prospective employees’ resumes. For example, MIT has begun to offer graduates the option of receiving a blockchain-based diploma that allows employers to instantly verify them.
Employee data security: Blockchain can encrypt and securely store private information, as well as provide data integrity and store sensitive employee data.
Payroll management: Through smart contracts that automatically make wage payments when certain conditions are met, blockchain can reduce manual time spent on payroll processing. Furthermore, blockchain can improve payroll data security by ensuring that only authorized personnel have access to sensitive financial information.
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Employee experience as a priority: influencing HR tech stacks
Companies have begun to boost their investments in the employee experience and emphasize its importance in their HR departments in order to increase retention and attract fresh talent. For example, Airbnb has rebranded the CHRO role as head of employee experience.” This increased focus has an impact on the HR software stack as well.
Adoption of Hybrid Work Environments
Companies can leverage hybrid possibilities to build in additional flexibility for employees by investing in new HR platforms that support remote work. Human Resources functions such as new-hire training and onboarding can now take place in hybrid environments, with some employees on-site and others joining remotely.
HR professionals can also use technology to better interact with remote employees, allowing for more hybrid schedule options. HR professionals can stay competitive in today’s hiring landscape by embracing the hybrid work model through the use of technology.
Employee Wellness, Safety, and Support
Even though the goal of achieving a healthy work/life balance is not new, the COVID-19 pandemic caused work life and workspaces to become fixtures in many employees’ homes.
Providing a safe and healthy work environment for employees is critical to maintaining a strong workforce, especially in times of labor shortages and staffing challenges. Employee health and work/life balance programs are widely available, and momentum is building to meet the physical and emotional needs of an increasing number of remote workers.
In a Nutshell
The foundation of any sound HR strategy is effective HR solutions software. An integrated HR technology solution may allow for a single employee record across multiple areas of the business. It also provides the ability for employers to customize how they utilize the system based on their individual needs. This includes selecting modules that are appropriate for the business, such as recruiting, benefits administration, and time and attendance.
This ability to customize allows businesses to invest in their key objectives, improve the efficiency of the most important HR processes, control costs, and help expand technology and build on new HR technology trends as business needs change.
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