Home Topics HR Automation What is human resources (HR) automation? 
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What is HR automation?

HR automation is the practice of using digital tools to streamline time-consuming HR tasks in human capital management.  

HR automation uses software and algorithms to handle activities previously done manually by HR professionals. These activities include data entry for applicant tracking, drafting job requisitions, onboarding new hires, offboarding protocols and managing time-off requests. It enables a data-based approach to talent acquisition, employee advancement, and retention that seeks to mitigate bias and enhance the job seekers’ and employees’ experiences.

Using automation, artificial intelligence (AI), machine learning (ML) and natural language processing (NLP), organizations can streamline HR processes with fewer manual tasks. Reducing the administrative workload for HR staff can reduce errors, enhance efficiency, ensure consistency, and improve the overall employee experience. These functions enable HR professionals to focus on the truly human aspects of human resources, such as shaping company culture, facilitating employee mobility and making strategic growth decisions.

However, the implementation of task automation might require more training and upskilling for HR employees, as highlighted by the Association for Intelligent Information Management (AIIM).1 Poor implementation can impede person-to-person interaction.

Putting human resources at the center of strategy

HR process automation is about more than saving time. Using HR automation—or even hyperautomation that merges multiple technologies and tools—equips HR professionals with valuable data and insights in near real-time. This is so they can make informed decisions amid changing economic, technological and labor landscapes. With the increasing prevalence of artificial intelligence (AI) and intelligent automation in various industries and employee skill sets, the need for HR automation has become even more critical.

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Benefits of HR automation

Organizations are continually undergoing major changes. According to a global study from the IBM Institute for Business Value (IBV), executives estimate that 40% of their workforce will need to reskill as a result of implementing AI and automation over the next three years. This shift is viewed as an expansion of job possibilities. With 87% of respondents saying that employee roles are more likely to be augmented than replaced by generative AI, with the effects varying depending on job function.

HR departments are leading the way in navigating significant workplace shifts in the economy, labor market, and technology. Talent scarcity and rising costs are prevalent, and AI tools and other technological advancements promise accelerated digital change. HR teams face the challenge of managing employee career mobility and ensuring adequate resources in these complex contexts. Here are some benefits that HR automation software can provide for addressing the challenges that are faced by HR departments.

Boost efficiency and scalability

HR automation software minimizes the time HR professionals need to spend on routine tasks such as data entry, applicant tracking, paid time off (PTO), overtime management and new hire benefit enrollment. It enables HR teams to address complex people-related challenges and provide the wanted face-to-face engagement.

Automation helps ensure efficiency, accuracy and consistency, enhancing employee experiences, satisfaction, and retention rates. HR automation also helps a company handle the increased demand for fast growth.

AI can speed reviews by digging deeper into data and helping HR staff make more informed decisions or streamline work. For example, AI can help analyze the outcomes of recruiting efforts, enabling recruiters and hiring managers to identify and refine their most successful outreach strategies.

Another time-saving tool is using AI to select from a prebuilt catalog of skills to execute tasks specific to human resources and integrating with the apps HR already relies on. Natural language processing can be used to create tools that speed interactions and data capture.

Improve decision-making

HR teams use HR automation to align their work with the broader corporate strategy. By generating data, insights and analytics, HR automation empowers HR professionals to identify trends, make data-driven decisions and formulate effective HR strategies.

This might include developing hypotheses based on employee listening systems and gathering insight into remote working by using advanced data correlations that can drive culture decisions. It also involves using advanced analytics to design and deliver internal products to enhance the employee experiences. Evidence-based products such as these, made possible by data that is the byproduct of automation, deliver business value, securing HR departments a position at the corporate strategy table.

Enable continuous performance management and assessment

HR automation supports the shift already underway from traditional annual performance reviews to continuous performance management. Real-time feedback, goal tracking, and agile performance conversations will assist HR teams through automation tools, fostering ongoing performance improvement and talent development.

Increase employee retention

HR team burnout and churn can be reduced by offloading tedious tasks so that HR professionals can focus on the work they want to do and were trained to do. This greater satisfaction can encourage more supportive and successful HR operations.

Challenges of HR automation

AI is a disruptive technology that comes with some challenges organizations might keep in mind.

Culture shift: HR professionals play a crucial role in establishing talent pipelines and training employees for added-value positions, enabling companies to stay competitive amid technological disruptions. However, if IT teams seize the opportunity to oversee HR automation initiatives, there is a risk of HR professionals being automated out of their roles.

The Society for Human Resources Management emphasizes that understanding and using automation's power can determine the advancement or marginalization of HR professionals.2 By using automation software to reduce time spent on routine data entry, HR professionals can focus on addressing these significant external shifts.

Cybersecurity: AI is susceptible to hacking, especially during the training phase, when machine learning algorithms are created. Data poisoning attacks seed malicious code or information in the training sets, potentially infecting countless machine learning model runs and, ultimately, the company network. Business leaders can work alongside IT and security operation centers (SOCs) to create plans that keep AI projects secure throughout their entire lifecycle.

Employee privacy: Using AI to optimize processes and evaluate performance might raise concerns. Organizations can take employee privacy seriously and address privacy in a data management strategy before AI systems are used to collect and analyze personal data. HR can alert employees what data is being collected and used for AI systems. Creating or using an AI system founded on transparency is a first step toward helping to address privacy concerns.

Integration: Some stand-alone HR programs can be difficult to integrate into the existing IT infrastructure. Conversely, if the data captured is not fully integrated, then this might lead to multiple data values that do not agree.

Reskilling: AI and automation can eliminate certain types of work that is traditionally done by people and might impact the roles of some employees. Tackle this challenge head on with a plan for reskilling talent and restructuring job roles.

Time to implement: Automating any HR process requires an initial time investment configure an automation system, migrate data, analyze processes, and redesign them to enhance the automation. Before company-wide deployment, an HR team implementing automation can train and familiarize themselves with the new tools and then conduct testing and troubleshooting to make sure that the automation is working optimally. If all works well, though, teams that undergo automation have laid the groundwork for long-term time savings.

HR automation use cases

Popular HR automation systems include functions for tracking applicants, managing performance, attendance, and payroll, as well as employee self-service portals. However, advancements in artificial intelligence can boost the capabilities of HR tools. HR automation examples include:

Benefits administration and self-service enrollment
Managing employee benefits and eligibility, including medical insurance, pension, retirement, and PTO can be a huge administrative load for HR teams. Benefits administration tools can centralize employees’ benefits data to a single platform for everyone’s visibility. Allowing employees to access the information they need when they need it minimizes HR’s administrative effort. Companies can use the data aggregated by these tools to better manage benefits spending and budgets in the future. Some tools even offer healthcare analytics to help employers make decisions and ensure compliance with regulations such as the Affordable Care Act.

Employee self-service portals are centralized online sites or gateways through which employee stakeholders can access information and conduct transactions. Self-service portals enable employees to access and update personal information, view pay stubs, request time off, and access HR policies and resources—reducing administrative time for HR professionals. According to Forbes, “Self-service portals have become increasingly common in a few areas, from customer service to health care and more. Self-service portals have also taken on a prominent role in the workplace, though many companies have yet to embrace this technology.”3 Self-service portals are one way to meet employee requests for easier access and transparency.

Candidate sourcing and hiring
A common complaint about the hiring process is that it’s slow. AI can help pick up the pace by helping managers nurture each potential hire automatically, and this enables them to receive notifications, for example, when a candidate applies for an open position.

An enterprise-grade applicant tracking system can touch every part of the recruitment process. From helping employers advertise open jobs, collecting resumes, creating a shortlist of candidates, scheduling interviews with shortlisted candidates, managing the interview process, and extending offers to selected candidates.

Along each step of the recruitment process, from hiring to onboarding, AI can help managers save time and better reach top talent. For example, managers can prompt generative AI tools to create customized messages to be automatically sent to each candidate. These messages can encourage engagement and move candidates along in the hiring process.

AI can also help organizations quickly fill short-term and temporary positions. By using natural language processing capabilities, AI tools for HR can automate manual procurement tasks, saving time. For example, AI tools can help managers compile requirements from stakeholders. And then work within a vendor management system (VMS) system to open a request with suppliers to find potential contractors and schedule interviews with hiring managers.

Compliance management
Companies can ensure that they are operating in accordance with local, state, federal and international regulations. This compliance might mean anything from paying taxes on time, adhering to labor laws and regulations, and safety in the workplace, to ensuring that any licenses, permits, and certifications remain up to date.

When deadlines or expiration dates loom, companies can take immediate action. And, as companies begin digital transformation processes and become more reliant on ambiguous legal spaces such as artificial intelligence (AI), cloud computing, 5G, and the Internet of Things (IoT), new compliance regulations, and issues will crop up. Automating compliance whenever possible alleviates the administrative workload of an HR team and greatly reduces human error. Not only do these automations streamline HR workflows, but they also enable HR departments to track and analyze data for optimization.

Employee onboarding
Onboarding new hires require the sending and receiving signed documents, granting software access, making device requests, submitting tax documents, and setting up tools. And introducing the new hires to their team and giving them everything they need to confidently begin their new role. A system for onboarding automation can set up access to IT resources and workflows for automatic notification, or for example, push notifications and approval. It can collect e-signed forms and generate official PDF documents. It can deliver devices to employees without waiting for IT support and ensure seamless enrollment into benefits plans.

AI can make the process of collecting information smoother and more personalized. AI-powered chatbots can guide new employees through the onboarding process, answer questions, provide information, and send reminders about key documents—reducing time-consuming tasks and enhancing the new hire experience.

In addition, HR automation can assist with offboarding by automatically withdrawing IT access and scheduling employee exit interviews.

HR support or service desks
Responding to employee needs is key to improving engagement and productivity. But navigating through complex corporate policies and HR and IT support processes can sometimes leave employees struggling to find answers—causing frustration and wasting time. AI-powered HR chatbots can help empower employees with fast answers and self-service support.

An HR chatbot that uses natural language processing and machine learning can understand, communicate, and even automate actions to support candidates and employees. For example, an intelligent HR bot can answer FAQs, suggest learning resources and assist employees with requesting days off or checking their remaining leave balances. Chatbot platforms can also provide reminders, conduct surveys, and collect feedback to enhance employees’ experiences.

Performance management
By gathering productivity data for individuals, teams, and organizations, a performance management tool can then present this data in easy-to-review templates in a central location. This data offers HR departments and managers insights into employee workload and enables them to make informed decisions about resource allocation, delegation, training, support, and promotions for the employees they oversee.

Professional learning and development
When HR onboards a new employee, deploys a new company policy or initiates training to keep employees in compliance with regulations, learning management systems can help. These automation software platforms automate the delivery of online courses and the tracking of employee progress.

AI can recommend personalized training modules. By analyzing data on each employee, such as their skills and preferences, AI can tailor training according to personal goals. AI also has the potential to help HR managers identify hidden talent or identify employees ready for promotion.

Time and attendance tracking
Some HR automation tools track employee time and attendance to help companies operate at their optimum capacity and ensure that they have enough human resources to take advantage of growth opportunities. Where HR teams of the past might have manually entered PTO and attendance into spreadsheets, new attendance tracking software enables HR teams to review and approve timesheets and leave requests or time off. They can now quickly verify available PTO, notify team members when a teammate will be out of the office, and analyze employee time-off trends to help avoid burnout.

When to implement HR automation

Given the rapid and continual changes in technology—AI in particular—knowing when to move to HR automation or move to a more powerful system can be challenging. Other updates or new IT solutions might also require detailed planning for integration. Keeping all of that in mind, here are some potential triggers for beginning the move to HR automation or more sophisticated HR automation.

HR is underperforming: Once HR’s most important functions are agreed upon and understood, how well is the team delivering? Delays or inefficiencies in hiring, onboarding, reporting, or payroll processing would be red flags that a change is needed.

Fast organization growth: If new hires are coming in faster than HR can handle, too many requisitions are slowing organization effectiveness, or training is delayed. Then HR might look to HR automation to help pick up the pace.

Budgets are strained: When new hiring is limited, offloading manual effort to HR automation can help keep pace with the work demands with a limited staff. Keeping HR people in the people business not only helps prevent burnout, but can also helps preserve what budget is available.

Risk of audit noncompliance:  If mandated recordkeeping practices are not being properly managed, the organization might be at risk—and a more automated and reliable system might be the answer.

How to implement HR automation

A systematic approach to HR automation often includes these steps.

1.    Survey and document manual processes primed for automation
First, the HR team identifies manual administrative tasks and other HR processes that can be automated. They can look for any cumbersome and repetitive tasks within recruitment, onboarding, talent management, time and attendance tracking, benefits administration, payroll processing and more. Robotic process automation (RPA) can assist with offloading repetitive tasks.

2.    Select HR automation tools
Next is research. The reviewing team can compare HR automation software packages and decide on an expenditure. Or, pitch corporate leadership for budgetary approval. The HR automation tools that are chosen can range from specialized HR software for specific tasks and use cases. To integrated human capital management (HCM) systems that encompass multiple HR functions, including employee recruitment automation, training and management planning.

3.   Integrate automation tools with existing systems
After selecting the automation tool, the team can roll out the new software and integrate it into existing HR systems. Such as a Human Resources Information System (HRIS), payroll system, benefits enrollment systems or applicant tracking systems—to ensure seamless data flow and synchronization.

4.    Collect and manage employee data
Once the new automation tool is in place, the HR team is no longer responsible for manual data entry. So they can now automatically collect and store relevant employee data, such as personal information, performance metrics, attendance records, and training history. To do this well, HR teams need to ensure compliance, ethics, and privacy of this data, which will also serve as a foundation for future predictive analytics, reporting and optimization decisions.

5.    Standardize the process
After an automation is running, the team can review it to help ensure that the new tool or process automation delivers maximum value to employees. An audit of the deployed automation will reveal areas for expansion, streamlining, or other improvements.

6.    Analyze data, optimize, and report
When data starts flowing, insights are not far behind. Automation analytics might be used to make data-driven decisions and recommendations to corporate leadership. Analytics can help HR professionals monitor employee performance, evaluate the effectiveness of HR programs and policies. And identify trends with meaningful business implications—that can then be brought to the C-suite’s attention for investment.

7.    Maintain and update regularly
HR automation requires regular maintenance, updates, and system checks to ensure data accuracy, security, and optimal performance. This may involve monitoring data integrations, applying management software patches, and addressing any issues that arise.

The future of HR automation

More application integration: It can feel cumbersome for HR teams and employees to work across the long list of HR automation software on the market, each of which addresses a single HR task or action. One advancement on the horizon is the integration of these tools into a single platform.

In the future, HR automation platforms, including watsonx Orchestrate, will deliver a comprehensive HR solution for automating across HR functions, encompassing recruitment, onboarding, performance management, payroll, benefits, and analytics—a one-stop shop for all HR automation. This can enable a seamless flow of data for predictive analytics.

More personalization: Recent advancements in artificial intelligence and machine learning enable HR teams to offload even more manual tasks, while offering greater personalization from the perspective of the employee. For example, while AI-powered chatbots can already provide employees with round-the-clock HR support, and virtual assistants can already automate routine tasks. New advances in sentiment analysis can enable bots to gauge employee satisfaction throughout all communications.

Advanced analytics and predictive modeling can help HR teams to better predict attrition and identify high-potential employees. Advances in natural language processing might make employee engagement with these tools even more seamless.

Mobile solutions for mobile work: With the rise of remote work, hybrid work and mobile workforces, HR automation will serve the needs of distributed teams. Mobile apps and cloud-based platforms will provide seamless access to HR systems, self-service portals, and collaboration tools, ensuring a consistent HR experience regardless of location.

Ethical AI and data privacy: As HR automation becomes more reliant on AI, HR professionals can ensure the ethical use of AI and safeguard employee data. HR departments will need to establish robust data governance practices, ensure fairness and transparency in AI algorithms, and comply with data protection regulations.

Employee well-being and mental health support: The global COVID-19 pandemic illuminated the need for companies to address employee well-being and mental health in a meaningful way, and this has become a high priority for employees and candidates. Chatbots and virtual assistants can provide resources, self-help guides, and access to mental health support services, promoting employee wellness and work-life balance.

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1 Association for Intelligent Information Management (AIIM): “The Pros and Cons of Automating Human Resources
2 The Society for Human Resources Management: “HR Needs to Stay Ahead of Automation
3 Forbes.com: “How to Increase Employee Satisfaction Using Self-Service Portals