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Digital Transformation via HRTech

Digital Transformation has been at the top of the CTO and CIO agenda for many years now, and within today’s enterprise one of the largest bottlenecks has always been the human resources department. HR departments are responsible for such a wide variety of functions covering the entire life cycle of someone’s employment from hiring to dismissal which generates a significant amount of ever changing data. In most organizations, this data is still often processed manually in spreadsheets which can lead to critical errors and hampers efficiency. In recent years, the lack of digitalization has severely hampered the growth of companies in countries facing skills shortages which in turn has led to the rise of technologies designed to improve and streamline HR operations, otherwise known as HRTech.

According to a recent study by US-based HRTech firm GNA Partners, HR staff spend most of their time on functions which could largely be automated. According to their survey the most time-consuming job tasks are recruiting, onboarding and termination (30.4%), maintaining records and auditing (26.7%) and developing new HR systems (16.7%). Only 26.8% of time is currently spent on strategic initiatives and hence the HRTech segment of IT products and services has emerged to address these inefficiencies.

HRTech first started in earnest several years ago thanks to the proliferation of cloud computing. Currently many organizations are automating functions like employee payroll, attendance management, benefits management and expense management are now commonly managed via software-as-a-service offerings. And while this has certainly increased the efficiency of the HR department, there are other areas which still remain as bottlenecks such as recruitment and new employee onboarding. Fortunately new technologies such as Artificial Intelligence, Virtual Reality and Chatbots are emerging as powerful business tools, which will become key services in the next generation of HRTech. Some key examples of the implementation of these technologies are described below:

Using Artificial Intelligence for Job Recruitment in Japan

Recruiting is one of the biggest challenges for an HR department, especially in industries such as software development where there is currently a large lack of skills in the market and a high degree of competition. This problem is especially severe in Japan where the population is decreasing, and companies have turned to Artificial Intelligence to try to address this problem. One company who is using Artificial Intelligence for recruiting purposes is Scouty Inc. This Japanese startup has created a service which can scan the Internet for developers and automatically created profiles job candidates. By using AI, Scouty totally eliminates the need for the time consuming process of searching for candidates and does not require candidates to submit resumes. Scouty also claims that its software can predict with a high degree of accuracy if a candidate is open to accepting a new job. This service is currently used by well known game developers in Japan such as CyberAgent and DeNA.

HR Interviews Using Virtual Reality in Australia

Virtual Reality is starting to be used by HR departments in order to conduct interviews with potential job candidates. Not only does VR potentially eliminate the need for candidates to travel, saving costs, time and physical space, but VR can also allow interviews to become more interactive. One company that has been using VR in its job recruitment process is Australia’s Commonwealth Bank. The company has been using the Oculus Rift to interview candidates in a VR environment. This allows the company to give potential employees tests which gage their decision making and problem solving abilities in a virtual environment that would be difficult to emulate in the real world. Other major companies who are currently using VR to interview candidates include Jaguar and the British Army.

Chatbots for Better New Employee Onboarding in the USA

Chatbots are currently the hottest topic in next-generation HRTech, and one of the most important functions that they will be able to do is to automate much of the onboarding process for new employees upon joining a company. Chatbots will be able to undertake tasks such as answering basic new employee questions about their benefits and company policies. In the near future these chatbots will also be able to handle basic IT inquiries such as how to set up a password or use a printer. Therefore these chatbots have the potential to significantly decrease the volume of inquiries that need to be answered by real people. This is already happening within some companies. For example in Chicago IT consulting firm West Monroe Partners created its own chatbot to assist with new employee onboarding. The chatbot is able to interact with new employees and collect information needed to fill out forms for new employees in order to gain entry into IT systems. Because the company has automated this process, the overall time required has been decreased from 25 minutes to 5 minutes and human labor is no longer required.

What Does the Future Hold for HRTech?

HR departments of the future will be increasingly reliant on technology, which will far exceed the functionalities of today which are mostly cloud computing based services. Artificial Intelligence, Virtual Reality and chatbots as just starting to be adopted by HR departments and represent the next generation of HRTech, but it is also fair to say that these technologies are still fairly immature. Therefore going forward it is possible to envision an HR department where all headhunting is completely automated by AI. All company interviews might be done within Virtual Reality which will be driven by ultra-fast 5G networks. Virtual Reality is already branching into new areas for example HR executives are being given training on how to properly dismiss an employee in a virtual environment. Chatbots are just starting to appear for HR onboarding but in the future might fully manage new staff and even replace the IT helpdesk within enterprises. As previously discussed, HR staff are currently spending about 75% of their time on processes that can be replaced with HRTech. Therefore the HRTech department of the future will itself be transformed and will spend most of its time on strategic initiatives.

Selected Sources:

(February 28, 2020)

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