According to a report released earlier this year by professional services network Deloitte, venture capital and private equity companies have invested $1.87 billion in human resources and workforce-related products over the past two years, marking a huge increase over decades passed.
The report took a look at growth in the HR technology marketplace, how it has changed in recent years, and what’s to come.
According to the report, 45% of large companies and 51% of mid-sized companies are increasing their spending on HR technology. The report states that only 8% and 10%, respectively, are spending less.
This investment is important, Deloitte posits, as the technology currently being used in HR can help address a number of workforce problems that have long plagued companies. One issue for example, is that productivity has remained largely stagnant in the United States for several years. But now, HR departments are utilizing new technologies to get the most out of their employees.
Today technology is an integral part of every operation and in HR, it’s being used in a variety of ways from hiring and talent retention to employee engagement and payroll. As a result HR departments are seeing positive results like reductions in employee turnover, more efficient employee benefits management and smoother onboarding.
Among these technologies is artificial intelligence, a much buzzed about innovation that’s been finding its way into hundreds of different industries outside of the tech sphere. Here are three ways AI is changing the HR landscape.
At 3.7%, unemployment is at a nearly 50 year low in the United States. And while this might be good news for the overall economy, it can lead to problems for hiring managers looking to fill positions.
The hiring and onboarding processes can already be long and arduous for many companies, so HR managers have begun utilizing technologies that makes these processes faster and more efficient. And perhaps that is why chatbot technology was among the stars at this year’s HR Technology Conference & Expo in Las Vegas.
While many have been using chatbots in HR for a few years, tech giants like IBM and Google are now getting in on the action and offering their own solutions. Google uses AI in it’s conversational recruiting platform which allows users to create automated voice and text conversations.
With this technology, recruiters can pre-write answers to traditional questions a candidate might ask. These answers are then fed to a chatbot that can conduct initial screening interviews to reduce the pool of applicants to a more manageable number. This frees up hiring managers to conduct other duties.
Since the hiring and onboarding process can often be time consuming, it’s vitally important for HR managers to ensure they are retaining the talent they hire. High employee turnover can be a drain on companies. For example, at a company employing 150 people, the cost of employee turnover annually could be as much as $1.5 million.
In order to address these concerns, several companies have begun adopting AI solutions in hiring that can help them determine whether a candidate will be a good fit with the company long term. These solutions use predictive analytics to look at internal employee data to create a profile of a candidate most likely to see longevity. This profile can then be used to measure the potential of applicants.
Similarly, predictive analytics can be used internally to address employee concerns. AI can be integrated into employee feedback systems to ensure concerns are delivered to the HR professional best capable of addressing it. AI can also be used to determine which workplace conflict resolution strategies have led to the best outcomes.
While vitally important, hiring and retention are really only half of what HR departments are tasked with. The bulk of their responsibilities involves seemingly mundane tasks such as payroll and employee benefit management. But while these everyday tasks might seem simple, they are also extremely time consuming.
When it comes to payroll for example, there is little room for error. But this is one of the most data intensive components of HR meaning that error can be inevitable. Unfortunately this can have a negative impact on employee morale when paychecks are late or incorrect.
Automation has already revolutionized payroll processes for many companies, but AI can be used to detect costly errors and address. According to the Association of Certified Fraud Examiners, employees commit payroll fraud at 27% of companies. AI can also be used to address this issue.
Similarly, AI can be used in the benefits realm to detect fraud and ensure things run smoothly so that employees are not without much needed care. AI can be used to remind employees of important benefits information and deadlines. It’s can also be used to analyse employee profiles to ensure they are taking full advantage of their benefits and suggest ways for doing so.
Photo by Tim Mossholder on Unsplash.