Small and medium-sized businesses (SMBs) invest in Human Capital Management (HCM) tools to drive productivity and efficiency across all HR functions. Looking at HCM trends in 2024 and where the industry is headed in the future, robust new data-driven solutions will continue to become more widely available.
The rapid rise of big data, analytics, artificial intelligence (AI) and machine learning in HR may seem intimidating, but new, more intuitive tools are making it easier than ever for PEOs, HR outsourcers (HROs) and their SMB clients to capitalize on HCM technology. It will allow them to make better long-term, data-driven business decisions.
1. Harnessing the Power of Data Analytics
Today, companies have access to a sea of data, and most SMBs understand they must dive into a more data-focused analytical approach to stay afloat. Analytics can help improve hiring, employee engagement, talent development and retention, and Performance Management.
The question is how.
HR managers are often swamped with tasks, and there just isn’t a lot of extra time to take a deep dive into data; some might not have the proper skillsets to do so as well. The good news is a plethora of new tools are easy to use. They provide meaningful and actionable insights that allow managers to make faster, more accurate decisions.
Data Visualization promises to bring patterns and trends to the surface in a modern, customized, easy-to-understand format. Tables, charts and datasets offer a clearer picture of benefits, payroll or any other HR-related topic. Using advanced analytics, PEOs, HROs and their SMB clients can drill down even further and see emerging trends in ways previously impossible or at least nearly so.
2. Continued Emergence of AI Solutions
Transforming vast quantities of data into actionable insight demands AI and machine learning in HR.
Imagine an Applicant Tracking System (ATS) communicating with a Performance Management system. Leveraging information from both systems, AI could help HR managers identify hiring needs and new job openings quickly and easily, and conversely, it could help employees navigate their career paths more strategically.
This reality is closer than you might think. Rapid developments in generative AI and machine learning in HR are also helping companies make smarter benefits decisions almost in real time, with more insight than ever before.
These are just a few of the many ways AI is evolving in human resources. As a general-purpose technology, possible uses for AI in HR are endless, including chatbots, screening tools and recruitment automation. AI-powered virtual assistants can answer questions, generate documents, analyze information, compare concepts and more.
No doubt, the potential for AI to transform the HCM landscape and create greater efficiency is vast. However, AI will continue to generate fear among employees about being automated out of their jobs.
To mitigate this fear, HR teams must communicate that the value of AI in Human Capital Management (HCM) is more than just completing tasks more quickly. AI frees up time for employees to focus on strategic tasks such as improving customer satisfaction, increasing revenue or boosting innovation.
3. Continued Advancements in Integration
As your SMB clients’ businesses “graduate” from a Professional Employer Organization (PEO) co-employment model, they will look to you for HCM solutions so they can bring HR in house. Additionally, advances in integration are making it easier for various HR systems to communicate with one another so SMBs can get all the tools they need through one platform.
Application Programming Interfaces (APIs) provide a set of tools that enable HCM systems to integrate with an SMB’s preferred solution, such as their payroll or benefits management system. Think of an API as a middleman acting behind the scenes, helping different HR tools talk to each other easily.
This means HR teams can spend less time inputting data or reconciling information across different platforms and more time focusing on attracting, developing and retaining talent.
4. More Efficiently Managing Performance
In today’s fast-paced business environment, sustaining employee success should be top of mind. Another important HCM trend involves Performance Management. This type of tool helps track employee performance in a way that is consistent and measurable, offering better insight to reduce turnover and maximize business outcomes.
SMBs still relying on a single annual performance review are falling behind. Waiting a year to provide feedback helps neither party. By compiling data throughout the year, Performance Management software identifies course corrections needed more frequently to better ensure employee success. They drive growth by building a culture of employee engagement, two-way communication, ongoing performance conversations and strategic alignment with business goals.
PrismHCM will offer Performance Management tools that are scalable to your clients’ specific needs and are easier to use than ever before.
Learn more about PrismHCM.