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The impact of technology on HR: The good, bad and daunting

Technology is changing HR in both positive and negative ways, and keeping up with these changes can feel overwhelming. Four leaders share tips for managing the changes.

Both human resources departments and business leaders are feeling the impact of technology on HR -- a trend that will only grow.

By 2025, the market for HR technology will be worth an estimated $30 billion, according to business consulting firm Grand View Research. Measured from 2019, that's a compound annual growth rate of 11%.

"The speed at which new HR tools are being created is breathtaking," said Ben Butina, director of employee experience at Phoenix Rehabilitation and Health Services in Pittsburgh. "[Yet] most organizations don't have the time, budget or risk tolerance necessary to jump on every new piece of bleeding-edge technology."

Technology has changed certain processes, but it's done so only incrementally, he said.

What does the impact of technology on HR look like on the ground? How has it impacted enterprise operations, leadership's decision-making and the employee's day-to-day working life? Here's what CHROs, HR professionals and technology analysts have to say.

Even if the HR technology hype and reality are different, changes are happening -- and not all of them are good. Here's a look at some of modern HR technology's most important effects.

User-friendly analytics

With an increasing number of user-friendly technology systems on the market, HR teams -- and business leaders -- have greater power to assess what is and isn't working. 

HR technology has enabled the democratization of data, said Mirco Gros, assistant vice president of talent management at telecommunications company RingCentral.  

Complex information and analytics no longer rest solely in the hands of data scientists, he said. Decision-makers themselves can now directly access the data they need.

"Leaders for the first time have excellent and easy access to data," Gros said.

User-friendly analytics means that not only can HR get insight easier, but other leaders can as well. Just as they can assess customer segment or budget data, they can also get insight on issues that affect people management.

"For the first time they have their own insights at their fingertips," Gros said.

HR workflow tools  

The impact of technology on HR is evident not only when executives make workforce-related decisions, but also on how HR itself does its job. For example, companies such as Workday or SAP SuccessFactors provide workflows.

"Over the next few years, more companies will adopt best practices that are baked into their HRIS tools," Gros said.

At the same time, businesses that might otherwise spend time and money trying out new ways to build procedures will work within the technology's processes.

"[They'll] be forced to work within the constraints of the tool they've invested in," Butina said.

HR process automation

The impact of technology on HR is also evident in how organizations tame their bureaucratic beasts.

HR technology has automated some of the labor-intensive paperwork and freed up HR staffers to take on more strategic work.

Not only does HR technology streamline internal processes, it can provide employees with smartphone access to benefits, payroll, retirement accounts and learning tools, said Marilena Acevedo, vice president of human resources for PetroChoice Holdings, a nationwide lubricants distributor based in King of Prussia, Pa.

The impact of technology on HR is particularly evident in PetroChoice's applicant tracking system (ATS), Acevedo said.

The ATS "has gotten the most buzz and acceptance from managers" because it simplifies their life and keeps everyone involved in hiring on the same page, she said.

That's especially important for a company that has more than 50 locations in 23 states, she said.

The ATS also helps ensure compliance through its record-keeping capabilities and saves time by handling approvals and other administrative chores within the platform itself.

Unintended consequences

The impact of technology on HR can be a doubled-edged sword.

Systems that make life easier for some employers may complicate the work of others. For example, the widespread use of applicant tracking systems is a blessing or a curse, depending on who you're speaking to, Butina said.

On one hand, the systems automate much of the recruiting process, he said. On the other, an ATS can allow unqualified candidates "to flood companies with applications with little effort and no negative consequences."

That forces recruiters to spend extra time weeding out applicants who should never have made it through the initial screen, and allows less time to develop relationships with candidates who show real promise.

HR teams have more data at their fingertips than ever before and more tools than ever to take advantage of that data, Gros said. But more data has not meant actual insight, Gros said.

Increasingly, HR departments must separate relevant data from information that won't contribute to business success.

"One of the worst changes is that we are throwing too much data, and irrelevant data, at ourselves," Gros said.

Proliferation of disparate HR systems

Ironically, as vendors develop more systems to address HR challenges, the number of available products itself has become a complicating factor.

"The IT functions and the HR job functions are struggling," Gros said. "We have so many different systems and tools right now, and many of them don't have a good integration, so it's really tough, still, to integrate data into one overall system."

Plus, many vendors offer solid products, but none of them address all of HR's issues, Gros said.

"[HR confronts] almost a mosaic of data, a mosaic of technologies and a mosaic of tools, but that mosaic is not fitting nicely… into one big picture yet," he said.

Integrating technology into HR

HR is at the cusp of becoming a systems science, where a major impact of technology on HR will be to greatly expand the function's role, said John Sumser, principal analyst at consulting firm HRExaminer in San Francisco.

"We're beginning to really understand how to monitor and assess overall organizational performance at a human level," he said.

The array of new intelligent tools helps manage everything from people analytics to network analysis to AI.

"The realities of actually managing the company's investment in people will take us from blowing smoke on the topic to really making a difference," Sumser said.

Still, many people question HR's ability to effectively manage the explosion of technology.

Because the impact of technology on HR is dramatic, it's surprising that no meaningful credentialing options have been developed to combine knowledge of HR with knowledge of its tech, Sumser said.

"It's a bad sign that credentialed HR professionals don't actually know how their technology works or how to effectively hack it," he said.

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