Human resources professionals hold the keys to the success of a company. But, as with any other sector, the role of HR is continuously being reshaped by advancements in technology. One such transformational trend is the rise of HR process automation, such as the use of AI recruiting software.
This article explores the exciting world of HR automation, examining its benefits, practical examples, potential drawbacks, key areas of implementation, and the return on investment. It also offers insights into the emerging trends in HR process automation and the tools that can facilitate this transformation.
What is HR Automation?
HR Automation refers to the application of technology to streamline and enhance various HR functions. It aims to eliminate repetitive, mundane tasks, allowing HR professionals to focus on more strategic and value-adding tasks. These high-value tasks can focus on improving workflows and employee experience, employee engagement and retention, managing organizational change, and fostering a culture of innovation.
This shift from an administrative (reactive) role to a strategic (proactive) role not only has the potential to increase efficiency and accuracy but also enhances the HR department's overall effectiveness.
Automation in HR, at its core, is the application of technology to perform HR tasks more efficiently, effectively, and accurately. It's not about replacing human HR professionals, but about empowering them to perform their roles more efficiently by reducing the burden of repetitive, mundane tasks.
What makes HR automation special is that it's designed to handle the unique needs of HR teams. For instance, an HR process automation tool, such as an applicant tracking system, can manage recruitment process automation, where it might sift through hundreds or even thousands of resumes to identify the most promising candidates based on pre-set criteria. It can also facilitate employee onboarding by automatically sending out welcome emails and notifications, providing information about company policies, and guiding new hires through the necessary paperwork.
The Amazing Benefits of HR Automation
Key benefits of HR automation include faster workflows, fewer human errors, cost savings, and scalability, plus easier compliance and the ability to leverage data. Let's explore these (and several more of the most compelling benefits of implementing automation in HR workflows) in more detail:
- Faster workflows: Automation helps get things done faster. Imagine having to go through thousands of job applications by hand. With automation, this process can be done in a snap.
- Fewer mistakes: People make mistakes, especially with repetitive tasks. Automation reduces these human errors. Think of it as having a super-accurate calculator that never hits the wrong key.
- Automatic compliance: There are many rules, compliances, and laws HR has to follow. Automation helps keep track of these regulations, so HR doesn't have to worry about accidentally breaking them.
- Data-driven decisions: HR has to make important decisions about hiring, promoting, offboarding, and many other things. Automation tools can provide useful information on metrics, benchmarks, and performance to make these decisions easier and more effective.
- Convenience for employees: HR automation tools such as an HRIS or HRMS create online systems (or employee self-service portals) where employees can check their pay or overtime, ask for time off, or change their contact information. This makes life easier for everyone, not just HR.
- Cost savings: By doing routine tasks faster and with fewer errors, automation positively impacts a company’s bottom line.
- Scalability: As a company grows, its HR needs to grow too. Automation can handle these increasing needs without requiring more HR staff, making growth smoother and more manageable.
According to a survey conducted by SHRM among 1688 professionals, 85% of employers who utilize human resources automation or AI report that it saves them time and increases their efficiency. Additionally, the number of applications that HR professionals need to manually review decreases to 44% or, in some cases, even 24%.
Drawbacks of Automation in HR
As with any other technological implementation, HR automation comes with its own set of challenges that companies need to anticipate and manage effectively:
- Jobs might change: A lot of HR professionals worry that automation could replace them. But it's more about changing jobs rather than losing them. As machines, software, and artificial intelligence handle routine tasks, humans may focus more on jobs that require strategy and people skills. Companies should help their staff learn new skills to absorb these changes and use it as a vehicle for career development.
- The options are overwhelming: Picking the right software from the thousands of vendors and solutions on the market can also be difficult.
- The set-up and implementation process is tough: Starting off with HR automation can be hard. It takes time, effort, and buy-in from various stakeholders to maintain an adoption process. Moving human-managed processes over to automation can be met with resistance from people who prefer the old ways of doing things.
- Data safety matters: HR automation systems handle sensitive employee data. If this data is not protected properly, it could lead to serious issues. Companies must choose secure systems and teach employees how to handle data safely.
Balance is Key
Becoming overly reliant on technology is risky. While automation is useful, it can't replace human interaction and judgment. HR is about people. Things like decision-making, empathy, and communication are areas where humans are needed.
It's important to find a balance between using automation and keeping the human touch in HR workflows.
HR Tasks That Should Definitely Be Automated
HR tasks that should be automated include hiring talent, welcoming new staff, keeping track of PTO and attendance, payroll/benefits administration, performance management, and training. These tasks, typically repetitive and time-consuming, can be transformed through automation to improve efficiency, accuracy, and productivity.
Hiring People
When a company needs to hire new talent, they usually receive lots of applications. The manual process of screening these candidates can take days (or weeks) and slow down time-to-hire so much that great candidates are lost in the process.
Automated software can help parse and screen these applications quickly, flagging the ones that best match the job requirements. This saves time, letting HR staff focus on the top applications and interviewing only the best candidates.
Welcoming New Employees
When a new employee starts at a company, there's a lot they need to know. Automation can help share important onboarding documents, explain rules, and get the employee set up in the company's systems. This makes the process faster and smoother for everyone.
The HR automation tool can also deliver a pleasant introduction to the company by sending various preloaded templates with welcome messages for new employees as well as prompts to check in and follow up on their employee experience.
Keeping Track of PTO and Employee Attendance
Automated systems can keep track of holidays, sick days, and other time-off requests, making sure everything is fair and clear.
Payroll and Benefits Administration
Automation helps do timesheet and remuneration calculations quickly and accurately, making sure everyone gets paid correctly and on time.
Asking Employees How They Feel
It's important for companies to know if their employees are happy and engaged. Automated employee engagement surveys can collect and analyze this information in real-time, making it easier for companies to make improvements to the employee experience they offer.
Performance Management
Keeping track of how well employees are doing can be streamlined with automation. Automated performance management tasks make it easier to set goals, schedule performance reviews, track progress, and provide feedback.
Employee Training
Organizing training sessions and tracking progress can be simplified with automation. This makes it easier for employees to learn new skills and for the company to make sure their training is effective.
In simple terms, automating these tasks makes life easier for the HR department. It lets them focus on the bigger picture, like helping employees develop their skills and making the company a better place to work.
Real-World HR Automation Examples
The power of automation in HR is best demonstrated through real-world examples. These case studies highlight the transformative impact of HR automation across different industries and business scales, offering valuable insights and learnings for organizations contemplating a similar journey.
Storyblok
Storyblok, an Austrian tech firm, developed a remote onboarding automation strategy to manage their expanding team using the Zavvy platform.
The strategy includes preboarding, company onboarding, and role-related onboarding, all integrated with tools like BambooHR and Slack for a smooth experience. This innovative approach has resulted in an improved remote onboarding experience, with new hires rating their onboarding experience 9 out of 10.
Notably, this strategy saved considerable time, approximately 68 hours per month, translating to over €2,448 in monetary savings.
Starling Bank
UK-based digital challenger bank, Starling Bank, leveraged Workable's recruitment solution to scale from 50 to over 1,100 employees in five years. Workable's video interview feature played a significant role in streamlining communication and screening processes, especially during the COVID-19 pandemic.
Starling Bank reaped the benefits of video interviewing: As a result of this automation, it managed to maintain its hiring pace and transition to a fully online recruitment process, positioning itself for continued growth.
PwC
Global professional services firm PwC used Workday Skills Cloud to transform into a skills-based organization. The project led to a 90% increase in recorded skills within one year, providing territories with various assets to support the transition. They also developed a global dashboard and a skills maturity matrix to measure success and track skills adoption.
In another initiative, PwC invested in a talent optimization and acquisition strategy using Workday Recruiting to standardize its global hiring processes. A year and a half after the initial survey, 90% of its member firms were using Workday Recruiting, representing a 60% increase. This digital shift improved data integrity and efficiency, expected to save up to 9,000 hours in one fiscal year.
Mondelēz
Fortune 500 company Mondelēz International focused on enhancing its HR data and organizational agility using Workday technology. The team successfully transitioned from traditional, encrypted flat-file transfers to API-based integrations, enhancing data exchange, and business agility. The deployment of Workday's Payroll Effective Change Interface (PECI) improved visibility and control over payroll data entry and exchange, leading to significant time savings and operational efficiencies.
CHRONEXT
Swiss luxury watch retailer CHRONEXT implemented a performance management solution by Leapsome to overcome challenges with their outdated process. The successful rollout of these tools led to a more efficient review process, improved employee engagement, and team development. The company now enjoys automated review cycles and insightful data-driven decision-making, reflected in an increase in their eNPS score.
Each of these examples underscores the transformative potential of HR automation. From employee onboarding and recruitment to skills development, performance management, and beyond, automation is enabling HR teams to perform their roles more efficiently, effectively, and strategically.
AI and Automation Trends in Human Resource
AI for HR is not just about automating routine tasks but also increasing the value of HR operations making data-driven decisions, improving employee experience, and fostering a culture of continuous learning.
AI-powered chatbots are handling queries, virtual reality is being used for training, predictive analytics are aiding in talent acquisition, and machine learning is personalizing learning experiences. The value of using AI for recruitment is becoming increasingly clear, with AI being used to automate sourcing, screening, and interviewing candidates.
Future AI Automation Trends
Future AI automation trends may include the increased use of AI for personalized employee learning and development, predictive analytics for workforce planning, and advanced automation for comprehensive talent management. That is why learning about AI in HR is essential now more than ever.
It is important to note that, while the benefits of these technologies are substantial, HR software implementation should be carefully managed to ensure an organization's unique needs and objectives are met. Moreover, the human element of HR should always remain at the forefront, with technology serving to enhance, rather than replace, human interaction and decision-making.
Cost and ROI of HR Automation
In terms of costs, the expenses associated with HR automation tools can vary greatly depending on the needs of the organization.
The right HR software for small businesses may not be suitable for the needs of a large enterprise. The price you pay for a tool such as an HRIS or an ATS depends on the features you need, the number of employees or hires it must be able to process, and the vendor.
The payment plan you choose and the service provided (Saas, once-off purchase, or subscription-based fees) can also significantly impact the cost. It's important to note that these tools usually require an upfront investment, which often includes costs related to the software license, implementation, and training of employees.
For more information on this refer to our HR software pricing guide and HR Tech pricing datasets.
For ROI, HR automation can provide substantial returns by increasing efficiency and productivity. Interest in AI for recruitment, for instance, has grown as businesses recognize its potential in streamlining hiring processes. Automating the employee onboarding process can further enhance the procedure, reducing the time and costs associated with manual tasks such as filling out forms and coordinating with various departments. Automated onboarding also means the process of integrating the new hire into workflows goes faster than with in-person training by team members, thereby making their contribution to overall profitability kick in sooner.
HR chatbots, another example of AI for HR, can assist with answering common employee questions, reducing the workload of HR personnel and allowing them to focus on strategic tasks.
In each of these examples, and many more applications of automation, the time-saving and accuracy technology brings to HR operations can be translated into real dollars saved. The ROI of moving from completely manual human resource management to processes that incorporate AI and automation can therefore be shown in the company’s profits.
Making a business case for using these tools is easier when projected ROI can be calculated. We cover HR tech ROI calculations in this online course.
Examples Where Automation Can Result in Significant ROI Include:
- Applicant Tracking Systems: An ATS can streamline the hiring process, making it less costly and more efficient at filling vacancies for optimal organizational productivity.
- Payroll Automation: Automating payroll administration can save significant amounts of time, money, and resources by eliminating the need for tedious hours reviewing spreadsheets and other manual payroll processing tasks.
- Time-Off Management: Automation can streamline attendance management, reducing the chances of errors and ensuring efficient handling of requests and PTO approvals.
- Employee Performance Management: Automated systems can help track and manage employee performance, boosting productivity and satisfaction.
“Machine learning and AI will be important for helping jobseekers find more relevant jobs during their search, while heavily investing in ATS integrations will help job boards create faster and better application experiences for users. By default, this will also increase conversion rates as more and more candidates complete the easier application process instead of dropping off, as well as decrease the CPA (Cost per application) for employers.”
© Lucas Martinez, Co-founder and Co-CEO of Talent.com for MatcHR Annual Report.
Moving Towards HR Automation
In essence, automation in HR is about leveraging technology to streamline HR processes, improve accuracy, enhance compliance, and ultimately, allow the HR department to focus on strategic tasks that can't be automated, such as building relationships with employees, fostering a positive workplace culture, and aligning HR strategies with the company's overall goals. It's about making the HR teams more human by letting machines handle the routine.
Understanding AI in HR is integral to fully leveraging these benefits.
However, while automation brings numerous benefits, it's crucial to remember that it's not a magic bullet. Organizations must consider their specific needs, potential drawbacks, and the cost of automation tools before embarking on the automation journey. Successful automation is a balanced act of applying technology where it is most effective and retaining the human touch where it is most valuable.
In conclusion, HR automation is a powerful ally in managing and improving HR tasks. It is an exciting avenue to explore as we continue to advance in technology, and its impact on HR management is undoubtedly profound. As we look forward to a future where machines and humans work hand in hand, it is clear that HR automation will play a pivotal role in shaping efficient, effective, and human-centered workplaces.
