The first article in this series discussed how HR tech can help drive the business strategy and that the Ultimate HR Tech Stack is comprised of two groups of tech working as one ecosystem. In this article, we will focus on the first group of tech – the ‘transactional HR’ tech group.
While both groups of tech have a lot in common, they are different in what they focus on and the outcomes achieved through them. Let’s unpack each group separately, starting with the foundation group, the group that must be in place first.
Group 1: Transactional HR Tech
Laying the foundation correctly via transactional HR tech leads to two very important outcomes. The first, and traditionally the most important, is the automation of HR processes. By automating HR processes, the organisation increases the efficacy of the HR function and in so doing reduces the costs of executing basic HR processes. The second, and lately vastly more important than automation, is understanding our employees (via advanced People Analytics). HR departments sit on mountains of data. On a case-by-case basis, one can argue that HR has more info on an individual (employee) than the marketing department (customer). Just compare the volume and richness of personal data that HR has about an employee and compare that to the data you have on individual customers. Using this data correctly, HR can understand their employees better than the business understand their customers.
The ‘transactional HR’ group of technology includes 7 of the 12 HR tech categories identified by Josh Bersin. These categories are:
The focus areas of each group represent the tactical approach of your HR tech stack. The decisions you take around each focus area and your ability to successfully implement these decisions will ultimately dictate how your HR tech will function.
Under the transactional HR group of tech, there are five elements that you must to focus on:
Although collaboration with IT is important from the start, this relationship and collaboration grows stronger as your tech maturity grows. As your transactional HR tech becomes more advanced, the lines between HR and IT almost becomes blurred. In many cases, the IT department employs at least one HR tech specialist, and the HR department employs traditionally IT roles such as business analysts, systems analysts and data analysts.
This article is the second of three in a series around the Ultimate HR Tech Stack. Keep your eyes open for more articles.