As digitization sweeps across the enterprise, human capital management is often overlooked. By infusing people management with precision automation, organizations can elevate workforce effectiveness and productivity, thereby increasing the role that individuals inside HR can play in advancing the overall business agenda.
New forms of digital technology are upending the ways and means of business. Hierarchical organizational structures are giving way to matrix configurations and project-focused teams. Simultaneously, the pace at which work is done is accelerating, thanks to the voluminous data generated by mobile and other Internet-enabled devices. However, not all processes are equal when it comes to automation. A survey by ServiceNow found that while 54% respondents use intelligent automation in at least one business process, there are still automation gaps that need to be filled — prominent among them is HR, in which only 37% of all tasks are automated.
This lack of automation adds to the time HR managers spend on completing repetitive tasks manually. The amount of time lost ranges between 14 hours to 30 hours a week. This is in stark contrast to the pace at which enterprises are automating their processes. A survey by Willis Towers Watson, for example, found that by 2020 nearly 20% of work tasks performed by U.S. companies will be automated. If HR remains a laggard in this automation effort, it will inevitably lead to problems. For one, automation will eventually change work dynamics. Second, automation will require a different set of skills, pushing enterprises to rely more on part-timers, consultants and other outside contributors who power the gig economy and provide specific expertise as needed.
This signals a profound change in the way enterprises manage their talent pools, requiring the HR department to be more agile in deploying talent anywhere in the organization at a short notice. This will be made more challenging by factors such as geographic presence, where varying regulations and cultural diversity call for more adaptive work structures that can flex with ever-changing requirements. Companies that resist HR automation risk being left behind when it comes to attracting and retaining talent in the digital age. Reducing manual processes to improve HR’s agility would be a no-brainer. More important are the benefits automation could bring to the HR department and the enterprise.
Impact of Automation
The basic tenet of automation applies to HR the same way as it does to any other function — i.e., the reduction in mundane tasks performed by employees, which allow them to use their creative skills on more pressing business challenges and contribute more constructively to creating business value. From the HR team’s perspective, this means HR can make meaningful contributions to strategic initiatives such as succession plans, and creating competitive benefits and compensation plans.
But HR automation also brings other tangible and intangible benefits to the enterprise. A survey by CareerBuilder revealed that 71% of respondents found that automation improved the candidate experience, 69% found it reduced errors, and 60% found it improved the employee experience.
Automation’s impact on key HR processes can be extensive:
Recruitment: Perhaps the most important HR process, recruitment is also riddled with challenges. Orthodoxies such as creating lengthy applications to filter out indifferent candidates have led to a situation where 60% of job seekers quit the application process midway, according to the CareerBuilder survey — this is something businesses cannot afford at a time when digital-driven innovation rules. Artificial intelligence (AI) can change this. For example, AI bots can parse hundreds of websites to identify ideal candidates. An AI-enabled chatbot, which is trained to answer routine questions about the employer, can then engage with the interested candidates, thus automating the initial screening process, which is often time intensive and inefficient.
Employee vetting: AI can relieve the HR department of the burden of validating candidates based on their resumes and online presence. This task is crucial to the talent acquisition process, but also relies heavily on manual intervention and is time-consuming. Using advanced analytical capabilities, AI can quickly and accurately construct candidate profiles for hundreds of applicants. Going forward, this database can become a reference for identifying ideal candidates as requirements arise, but, crucially, it will save time and allow the HR team to focus on tasks such as personal interviews.
Employee wellness and engagement: Today’s talent pool is dominated by the millennial generation, who place greater value on work-life-balance, health benefits and financial well-being than did previous generations. It makes sense, therefore, for businesses to broaden the definition of benefits, from providing health insurance and promoting good health, to proactively creating a workplace where employee wellness and the organization’s long-term vision go hand-in-hand. Creating a program like this would require employers to gain deep understanding of what motivates employees. Data from wearable devices such as fitness bands that track employee health combined with a mobile-first approach would be the ideal way to engage today’s hyper-connected workforce. Automated HR processes would be at the heart of this transformation by providing the HR team with a holistic view of the employees via dashboards that integrate data related to their work performance and wellness. Nevertheless, employers will have to consider the impact of the Health Insurance Portability and Accountability Act (HIPAA) and other relevant regulations on these programs.
Other processes that can benefit greatly from increased automation include:
Onboarding/offboarding: Forget folders full of documents that need multiple signatures from the employees. A digitized and automated onboarding process will not only be faster and smoother, but also a great way to introduce employees to the organization’s core values. For example, automated onboarding would eliminate the need for physical copies of all documents a new recruit needs to submit, thus making it easier for the HR team as well as any other team (such as the local IT team) involved in the onboarding. Reduced paperwork will cut down the time it takes to process these documents to a few hours. This will also ensure a smooth offboarding of employees who exit the organization.
Performance appraisals: A heavily manual performance appraisal system is prone to delays — from requesting evaluation through reviewing the results. However, an automated performance appraisal system that is tightly integrated with a human capital management system can track employee performance on a more regular basis and trigger the appraisal process at the scheduled time. Regular updates will allow managers to identify gaps in performance and provide feedback, ultimately resulting in better employee engagement and satisfaction.
Payroll: Payroll automation is especially beneficial in the digital age where employees are likely to be spread across multiple locations. A payroll system integrated with the existing human capital management system can save work and time for the HR team while making sure that regulatory obligations are being complied with, and data security is ensured.
Human capital management: Monitoring employee progress in real time allows the HR team to better match the right employees to the right tasks based on their skills. Moreover, a clear view of employee skills can also result in more relevant training programs that can help close the widening digital skills gap that is impacting multiple industries. Reskilling will also save companies the time and cost involved in hiring fresh talent.
Getting HR Automation Right
Numerous emerging technologies will play a major role in the acceleration of HR automation. The following are ones that decision-makers should carefully evaluate.
Robotic Process Automation (RPA)
RPA relieves the HR team from the burden of performing the most routine manual tasks. Often referred to as a software that automates other software, RPA imitates human interaction with rules-based automation that reduces manual errors and boosts the speed of work. HR tasks that can be automated through RPA include repetitive processes such as payroll, benefits enrollment and onboarding.
Integrating advanced analytics into existing HR systems will allow organizations to make more informed fact-based decisions by applying data from disparate data repositories. The ever-increasing volume of data can be sliced and diced using soft-coded rules to gain answers — such as understanding employee potential — that would be hard to gauge using hard-coded rules such as employee attendance, or targets achieved. If used correctly, these analytics can boost engagement levels while giving the HR team deeper insights into employee productivity, skills and motivations.
Chatbots are a relatively recent phenomenon, aided largely by the rise of social media platforms such as Facebook, and smart speakers such as Amazon Alexa and Google Home. In a very short time, chatbots have gained popularity with businesses and consumers alike (across generations) for their instant responses, and 24x7 availability. For HR teams, chatbots hold immense potential to make the enterprise-employee experience pleasant and productive. Beyond engaging with potential job candidates as noted above, chatbots can conduct background checks and enable easy onboarding of selected candidates. They can also answer FAQs from existing and new employees, improve training efforts by making an interactive experience instead of a one-way communication, and for end-of-year reviews, enable instant feedback and performance insights.
The distributed ledger technology that powers blockchain has found use cases across industries and processes, and HR is no different. Blockchain-based smart contracts can automate the release of incentives, benefits and compensation. Employee data stored on blockchain can act as an irrefutable record of performance and could potentially eliminate the need for a resume, making the recruiters’ job a lot easier. This would be a boon for seasonal and contract-based employees since their work credentials could be validated instantly and payments released automatically upon completion of tasks spelled out in the terms and conditions of a smart contract.
Despite its wide-ranging applications in HR, AI has drawbacks that need to be addressed if it is to truly become an extension of the HR department. Algorithms replace human processes, but replacing humans altogether needs careful implementation. By design, an AI-based process is only as good as the data it is built on. For example, natural language processing (NLP) algorithms have been found to be ineffective when handling African-American dialects of English because they were not trained to understand these dialects. Similarly, AI tools also need to be trained to understand terms commonly used on social media platforms such as Facebook and Twitter.