Today’s groundbreaking HR tech solutions are automating day-to-day HR processes, securely storing data, providing analytical tools for more strategic decision-making and more. By driving more productivity and efficiency, these solutions are becoming vital to a business’ success.
These technological innovations are radically transforming the Human Capital Management (HCM) landscape, which is a good thing for small and medium-sized businesses (SMBs) and Professional Employer Organizations (PEO) that provide that technology to their clients.
There are several trends to be on the lookout for when it comes to HCM:
- Cloud-based computing provides instant access to massive amounts of digitized employee data and helps streamline the data acquisition process with modern, intuitive, accessible design.
- Artificial Intelligence (AI) will continue to evolve and improve, including to help match employees to job openings and track employee engagement.
- Self-service tools will allow employees to swap work shifts, double-check paystubs and even get paid quicker through Earned Wage Access (EWA) while SMBs can do background checks, manage benefits and more with integrated tools.
Effective HCM systems streamline, simplify and automate HR functions. That includes in areas like Applicant Tracking and Onboarding, performance reviews and Performance Management, and Learning Management as well as Payroll and Time & Attendance.
New technologies also help SMBs attract top talent and retain employees by keeping them engaged. And HCM can also streamline the experience for a company that decides it wants to graduate from a traditional PEO model to a self-service one.
So what’s next? Glad you asked. Here are a few important HCM industry trends heading into 2024.
Improving the Overall Employee Experience
A key HCM industry trend is a focus on user experience (UX) that transforms traditional HR tech into a more intuitive, accommodating and inclusive option through state-of-the-art HR technology.
Easy-to-use tools that create a “journey” for employees provide a more cohesive, user-friendly experience. Self-service portals enable employees to manage personal information, view paystubs and request time off, reducing workload for HR departments.
Leveraging AI and Machine Learning, Albeit Cautiously
AI will continue to evolve and drive innovation that alleviates HR’s workload, such as supporting hiring and promotion decisions. It will enable HR managers to automate countless talent acquisition and management tasks, as well as refine and streamline HR processes.
A significant HCM trend we’ll be seeing is using AI in people analytics software to better understand what is happening in the workforce, especially as it relates to engagement and the employee experience.
That said, there are still concerns about AI in HR, for example, possible threats to data privacy or how algorithmic bias could be considered discriminatory.
As ReNika Moore, director of the racial justice program at the American Civil Liberties Union, said at a U.S. Equal Employment Opportunity Commission (EEOC) hearing on AI discrimination in 2023: “We must have comprehensive public oversight, transparency and accountability to guarantee that job seekers and employees do not face the same old discrimination dressed up in new clothes.”
Nurturing an Inclusive Workplace
Instead, Diversity, Equity and Inclusion (DEI) should become a top priority and core business strategy for SMBs. One way to combat AI bias is by ensuring there is human oversight of data. Another way is to use AI that incorporates fairness-awareness algorithms in machine learning to help ensure, for example, that minority candidates aren’t being overlooked because of AI.
Creating a positive, more inclusive culture not only helps a company attract new talent but also increases job satisfaction and retention. It’s also a competitive advantage, as hiring from a broader labor pool means fresh ideas are brought to the table.
Emerging HCM technologies can help automate many of these HR processes. They can also be used to gather feedback on DEI policies and practices, such as Employee Resource Groups, to help ensure equal access to success.
Supporting Remote and Hybrid Work Models
The rise of remote and hybrid work models has forced many SMBs to adopt and implement a work environment that helps employees feel connected, engaged and productive.
Technology is obviously an extremely important part of allowing people to work remotely, but it’s also a key component of managing those workers.
New technologies help with onboarding, training and fostering collaboration in this environment, while keeping lines of communication open between HR managers and office and remote employees.
SMBs have been slow to adopt data analytic tools, but investment by companies of all sizes will continue to grow. HR analytics drives smarter decision-making, such as determining the best time to hire to address staff shortages or evaluating whether workers are taking full advantage of employee benefits.
Cloud-based HR Systems
The use of cloud-based HR systems also continues to grow, providing collaborative tools that help increase productivity. Other cloud-based applications include offering employees online access to all training and onboarding materials and enabling self-service portals and chat functions.
Additionally, PrismHCM will be able to help SMBs with their employee experience, Payroll, Benefits Administration and more.
PEOs can benefit, too, by being able to provide these functions to SMBs with a familiar, intuitive platform.