Technology investments at multinational organizations could not be described as uncommon, however there is a trending investment status around human resources technology that has been very much in evident in 2021.
Whether this hr tech funding is a continuation of investment strategies adopted by companies a few years back or a direct response to the global pandemic is a subject of debate. Inevitably, the pandemic will have accelerated urgency around HR tech investment particularly if existing or legacy technology at a company is no longer fit for purpose in a world where recruitment and HR services have become virtual or almost exclusively online.
In this article, we will take a look at the key drivers behind the HR technology investment boom-why it is happening and what global employers are hoping to achieve in the employee experience space with the substantial investments they're making in this next generation technology
What kind of HR tech?
A good starting point is to describe what we mean by human resources technology as it is a broader subject than you might think. It is not solely related to video conferencing technology and remote onboarding experiences, this is simply a narrative that dominates the media, understandably so because of the huge shift to remote work in response to the global pandemic.
And it is definitely true to say that companies everywhere are making investments in digital technology that make the recruitment, talent management and onboarding process achievable in a virtual or online world. It is also fair to say that some organizations are already beginning preparations for this new culture of hybrid working that is expected to achieve relatively widespread adoption in the coming months and years.
A globally dispersed workforce, under this hybrid model, would spend a specific number of days a week in the office and the rest delivering their duties remotely. This needs to be supported by robust, flexible and secure digital technology. Those who do not have this technology in place or have not made plans to invest in it will find themselves quickly behind the digital transformation curve, and it may impact their ability to recruit or retain employees.
But there are other forms of technology investments happening in the global HR space- compensation and benefits tailoring options for employees is one, and there have been numerous new entrants to the technology market offering digital products that focus on empowering employees to make their own decisions and remain in control of their compensation and benefits.
Productivity and collaboration platforms are also on the rise-a number of different organizations have chosen to invest in these even before the pandemic began. This is about maximizing talent and optimizing collaboration opportunities, particularly when it comes to a geo dispersed workforce who cannot meet face to face. These platforms are a step forward from basic video conferencing, and they focus a little more on creative collaboration and employee interaction.
Other notable mentions include technology innovations in areas like jobs boards and performance management portals, virtual office experiences and platforms that enable gig and shift workers to interact and get in front of global employers who need their skill sets.
HCM Systems
Unsurprisingly, HCM systems are needed by many organizations, especially those who are going through a period of intense growth or those who are mandated to scale and enter new countries and markets as quickly as possible.
Human resources managers and hr professionals need a secure and reliable digital platform to help them keep track of everything and meet some very demanding recruitment objectives. Those companies who do not have a HCM/ hr system or rely on outdated, legacy technology will find themselves struggling for the level of visibility and control they need to manage a growing and globally dispersed workforce.
This is about more than workforce management; it is also about reporting and crucial data flows. an example would be the very necessary data flows between a HCM and a global payroll system. Without these data flows it becomes difficult to track all of the joiners and leavers, and also ensure that all of the necessary data is being consolidated and properly monitored in a secure cloud environment.
HCM systems also need to share data with financial and accounting software. The office of the CFO will be interested in any technology platforms or integration technology that can provide seamless data flows between a HCM, accounting software and global payroll systems. This is the kind of inter-departmental connectivity that is required to keep track of everything and any HR tech investment around a HCM should consider this functionality as a priority. A significant number of HR tech investments in the market have focused on HCM suites that are directly linked to global payroll, as more and more people realize that an investment in one of these at the expense of the other can negatively impact their ability to scale and grow at the speed they want to. Some things just go hand in hand.
Wellness and Diversity
Another area of significant growth is hr tech investment in wellness related work tools. Stress, employee burnout and mental health challenges have been highly prevalent in the global media ever since the pandemic began.
Proactive employers are beginning to recognize the importance of healthcare and wellness tools to ensure the safety and well-being of their global workforce. There are strong links between creativity and productivity and employee wellness & satisfaction levels, so it is in the interest of global employers to examine what strides they can make in this area.
It's an evolving landscape with more and more technology coming on the scene that is designed to gauge stress and burnout levels as well as overall levels of contentment. No organization likes having to deal with high turnover levels, so those that make the effort in this wellness space may well be rewarded with strong employee retention levels and long-term loyalty from the global workforce.
Diversity is another area that gets a lot of attention in the media. Global employers now feel a greater responsibility to take proactive steps and ensure that they do their level best to create a globally diverse workforce. Any technology platforms that give global employers an insight into the breakdown of their cultural diversity or access to a more ethnically and gender diverse pool of talent is something that is increasingly being looked into.
Cloud and SaaS
Human resources, like a lot of business-critical services now has its future firmly rooted in cloud applications. It should be no surprise then that investments in SaaS platforms have become much more common place as global employers look to manage their HR services in the cloud. There is strong investment in digital platforms that focus on user friendly and intuitive design together with a suite of smart tools and digital analytics.
SaaS platforms that lead the way when it comes to insight and analytics along with automation are at a distinct advantage as many global employers believe that this is the kind of technology stack that will best serve them in the future.
It is clear from the above that HR technology investment is on the rise and there is likely to be a steady path of consistent investment into HR tech space in the next three to four years. Multinational companies and global employers are looking for agile, responsive and future proof technology. Integrations with related departments such as finance and global payroll will also prove to be essential as companies everywhere look to develop a more cohesive internal technology ecosystem.
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