Typically, automation is applied to customer-facing processes, since customers drive revenue which directly impact a company's financials. Fortunately, businesses have realized that they can't maintain happy customers without ensuring happy employees. This is especially true given the high cost of talent acquisition, the employee impact on satisfying and retaining clients (think sales, customer success, ops), and the need to retain great talent.
Furthermore, employees have accrued increased leverage, given their greater work mobility, a market shortage of skilled labor, and increased demands for inclusion, participation, diversity, and compensation.
That said, companies are now focused on improving the employee experience.
In this article, we'll deep-dive specifically into how businesses are automating Human Resources to improve productivity, decision-making, costs, and the employee experience:
What is HR automation?
"HR automation" is the process of leveraging technology, rather than human labor, to execute reoccurring tasks across the various functions of a Human Resources department (e.g., talent acquisition, talent onboarding, learning and development, performance recognition, workforce analytics, etc...), in an effort to improve productivity, consistency, speed, costs, and/or accuracy.
Why is automating Human Resources important?
Automating Human Resources is not a priority for every company. This is especially true for smaller companies that don't yet need scale and can manage most workloads by themselves. In fact, many may want to be more closely involved with each decision as the company grows.
But, what about fast-growing organizations that quickly outgrow their HR bandwidth and begin to add new systems, tools, and policies? Or, what about global enterprises with policies and systems that can differ across countries, cultures, and languages? Or what about mature companies looking to streamline their existing processes simply to deliver a better experience? For these companies, the cost of NOT automating Human Resources can be very high!
According to research by Careerbuilder, HR managers who do not fully automate say they lose an average of 14 hours a week manually completing tasks that could be automated; more than a quarter (28 percent) waste 20 hours or more, and 1 in 10 (11 percent) spend 30 hours or more!
HR managers who do not fully automate say they lose an average of 14 hours a week manually completing tasks that could be automated
Automating Human Resources, therefore, becomes a requisite and will deliver benefits that far outweigh the money, time, and resources invested. In doing so, the short-to-long term benefits for a company can be several:
Productivity improvements - By automating aspects of a process, a resource can now get more done! In other words, if onboarding new employees previously took 1 hour every two weeks, but now takes 10 minutes, that resource can now onboard more employees in the same amount of time.
Shift to higher-value, strategic activities - By leveraging HR automation software to address high-volume, low-complexity tasks, HR staff can now shift their time to focus on the key strategic priorities needed to address the ongoing employee demands listed previously.
Lower HR support costs - HR automation software can reduce workload requirements and, therefore, potentially the number of resources you'll need to support that workflow. For example, leveraging AI to automate responses to employee HR inquiries can reduce HR support tickets, which can reduce the number of resources required to address those tickets (which, in turn, reduces your cost structure).
Better satisfaction via improved employee experience - HR departments are beginning to track and monitor employee engagement and satisfaction. HR automation is one aspect that is helping to drive that metric, as employees are finding it easier and quicker to execute their day-to-day activities.
Data-driven business decisions - HR automation software can enable data-driven insights to help business leaders make more informed decisions. With insightful employee analytics that help you determine what's on the mind of your employees, where they are getting value and most importantly, what are the areas in the business where there is friction that further automation can help solve.
Creation of new, higher-value jobs - According to an IBM paper, automating Human Resources can create higher-level, new roles, such as that of a Talent Scientists and Talent Influencer. The former marry the science of data to the art of sourcing, and continually drive a successful hiring outcome with higher predictability. Another new role at IBM known as Talent Influencers makes up the next generation of digitally and socially connected recruiters who have a personal brand tied to domain and industry.
Where is HR automation taking place?
Not every aspect of HR is suitable for automation. In fact, processes best-suited are those that meet one or more of the following criteria:
Tedious and repetitive work
Occupations that affect a large number of employees
Error-prone and potentially inaccurate tasks
Roles that involve large volumes of data
Logical and rule-based duties
A recent study by KPMG International has highlighted exactly which of the 21 HR services are best positioned to benefit from HR automation. There are a few takeaways:
76% of HR services (16 of 21) CAN benefit from partial or full automation. The majority of these are low value-add and low complexity, but still require valuable resource time. The easiest to automate are data management, forms & workflow, and payroll services, all of which could be good places to start a pilot.
24% of HR services (5 of 21) CANNOT benefit. These are highly complex activities that will always require more human involvement, such as HR strategy, change management, and system architecture.
Further, for those less inclined to disrupt current workflows and processes, a McKinsey analysis estimates that 56% of "hire-to-retire" HR tasks can be automated with existing technologies (i.e., automation, machine learning, and employee agents) and minimal process change.
"HR can and should be a significant deployment opportunity for automation technologies" - Neel Gandhi, McKinsey
What are specific examples of HR automation?
To make HR automation a bit more tangible, below are common HR automation examples:
Answering frequently asked employee questions (most common starting point)
Often, HR staff find themselves answering the same employee questions across the various HR domains of compensation, payroll, learning, benefits, etc..., For larger organizations or those with a small HR staff, HR can quickly become overwhelmed!
That said, this is a common starting point for many HR leaders adopting automation and AI, since it's relatively easy to implement and prove the value. In fact, some companies saw a 60% decrease in inquiries & calls after applying AI to their HR department to better scale support and improve productivity.
While there is quite a bit of HR automation software out there that can handle this use case, consider your current skills and willingness to spend, since some products can be cheaper to maintain and easier to build with pre-built automation skills and SaaS delivery models (Quick Scout is one example).
Reviewing candidate resumes
Often considered one of the most important priorities for a growing organization, talent acquisition can also be the most difficult and time-consuming. Reviewing and qualifying hundreds of applications for an open role is tough. With automation, HR teams can automate the upfront qualification process, so they can spend more time on deeper, more personal evaluations & interactions with potential candidates. At the same time, they can qualify more potential talent with fewer bottlenecks and improve the candidate experience.
Improving employee retention
Since the cost of talent acquisition is far higher than the cost of talent retention, HR departments are leveraging retention risk analyses to quickly identify and understand the danger of employee departures for the entire organization or for a specific department. The software can predict whether top performers are at a high risk of leaving in the next year and project the cost to replace them, says Cristina Goldt, vice president of human capital management products at Workday. Such automation insights enable HR to take proactive measures to ensure employee retention
Submitting & reviewing expense claims
Expense automation helps organizations accurately track expenses, coordinate an approval workflow across multiple stakeholders, maintain policy compliance, and reduce the possibility of errors and fraud. Without such HR automation technology, this process becomes very tedious for employees given its complexity and frequency, while subjecting submissions to a higher probability of errors.
Transferring internal employees
The process for transferring an internal employee can often involve several stakeholders and a tedious process. While not common for small companies, internal transfers are actually quite common for large, global organizations that encourage internal talent mobility. HR leaders are leveraging AI and HRIS automations (think Workday or Kronos) to automate this process, so managers can spend less time on process and more time enabling and developing their teams.
Predictive workforce analytics
Albeit a more advanced use case, businesses are beginning to leverage their datasets to better understand their future workforce skill needs. Some do so by analyzing their existing project pipeline, the skills required to deliver those projects, and the skill matrix of their current workforce.
By leveraging automation and AI for such predictive insights, HR leaders can better understand the skills they'll need in which geography and at what time to ensure a happy client and minimal revenue loss.