What is HR Tech?

Human Resource Technology, better known as HR Tech, combines software and hardware properties to manage employee activities effectively.

HR Tech enhances Payroll systems, travel management, expense management, employee management, recruitment process, and more.

The goal of HR Tech is to provide ease and comfort to the daily running of these activities. The HR Tech initiative is an HR solution that guarantees speed, smooth working experience, and maximum flexibility for every employee.

In addition, it goes hand in hand with the safety compliance of data storage, which is necessary for the operation of the systems.

The HR software is built to suit a matching task based on the workload that needs attention. For some, it can be an upgrade of the company’s workflow, while others look for time management and efficiency solutions.

The current state of the HR Tech industry

Change is a constant phenomenon that would always be effective in the world's progression from one dispensation to another. Digitalization through some series of HR trends is not an exception.

The effects of digital disruption have a significant impact on HR Tech.

Digital disruption is a process that involves changing the expectations and behavior of an individual in a culture, market, or industry as a result of changes in digital channels or resources.

One of the examples of digital disruption in HR is the process of changing operational HR processes to become automated and data-driven.

Statistics have spelled out the boom HR technology is experiencing. For the record, there has been a rapid increase in investment from January 2017 till 2021, where spending for HR Tech reached a total of $28.4 billion. A total of $13 billion has gone into HR Tech's investment this year (2021) alone.

HR Tech is a market of "products" and "platforms." According to "HR Technology 2021: The Definitive Guide," more than 12.1 million employers in the U.S. spend over $5 trillion on payroll, benefits, training, and other employee programs.

Moreover, there is still a space for more HR solutions to be implemented in the companies or offered to them.

What effect does digital disruption have on HR Tech?

It increases the speed of HR Management: Over time, the manually operated activities have folded upon the arrival of the HR software - which is used to automate those activities. For example, the manually operated payroll system, which could be so time-consuming, has been accelerated.

It enhances the HRIS's (human resources information system) efficiency: Digital disruption in HR has facilitated the automation of activities and has greatly aided the increased productivity rate in HR technology across different sectors.

It reinforces a regular performance management process: With the aid of HR solutions, employees' daily performances can be easily compiled and provided when needed. It also helps to estimate which processes need improvement.

It aids active engagement: It is easy to initiate engagement on the go in any organization or company. This, in turn, improves the organization's overall functioning and cooperation, and information flow.

It encourages learning: HR solutions through digital disruption have made learning easier, faster, convenient, and effective. There are so many online courses that are readily available which broaden knowledge and strengthen skills for the benefit of the employer and employee.


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The future of the HR Tech industry

The future ahead of the HR Tech industry is quite thrilling and very broad. A number of trends are yet to be discovered since they are largely driven by technology, culture, and the economy.

Following industry trends becomes the requirement needed for the success of the company. We gathered ten trends that are becoming the norm now and those that are developing:

1. Gamification Experience. The company's growth is often dependent on employees' productivity and experience. Introducing a gamification experience can significantly improve it. It's a process where game mechanics are incorporated into a non-gaming environment. An aspect of this experience can assess an individual's mood for an overall better gaming experience. It can be used to engage and regulate an employee's performance towards achieving a particular task.

2. Cloud-based HR. Cloud-based HR can also be referred to as the front line of Human Resource transformation. The advancing digitalized world often takes advantage of the cloud-based HR Tech to enjoy service delivery and good customer service. The cloud system is a handy reservoir where whatever you need can be easily accessed, provided the system can make it available. Cloud-based HR synchronizes data for centralized usage, which could be accessed from any device and location.

3. Wearable Devices. Introducing wearable devices, such as smart rings, wristbands, and watches, in HR is an innovative idea aiming to drive workplace efficiency, productivity, and safety. Collected data about an exercise routine, sleep activity, or even mood are used for tracking information on a real-time basis. Then such data implemented in the HR department can help deliver a better work experience, alleviate unnecessary strain on workers, and make a workflow tailored to the specific employee.

4. Data Security. One of the growing concerns for HR and software creators is to ensure the data is correctly processed, stored, and managed. The use of employee HR self-service platforms is increasing, and the threat of data breaches has become real. Existing HR software will need a lot of reworking and require the implementation of more data security solutions like encryption technology. It opens a whole new space for data protection products.

5. Chatbots. Chatbots became known due to the WeChat platform in 2009. They have been gaining popularity since 2016 when Facebook Messenger allowed developers to place chatbots on their platform. Previously chatbots were used for customer service, marketing, and sales to answer questions and increase customer engagement. Now the rising trend is integrating chatbots with CRM platforms. This aspect of HR Tech focuses on automating and simplifying data entry, providing faster access to data, enhancing the user experience, and empowering sales.

6. Employee’s Mental Health. Employees' wellness impacts their productivity and customer satisfaction. Therefore, employee well-being becomes a priority and a vast developing trend. Businesses are investing in tools that focus on helping employees avoid burnout and improve mental health, leading to the fast growth of the meditation apps market. Its size is expected to reach USD 4,206.1 million by 2027, and key companies like Headspace and Calm witness over 50,000 downloads each day worldwide.

7. E-learning. Remote work has had a meaningful impact on reinventing the learning experience. Employee training is moving increasingly to the digital realm and developing towards self-paced, personalized courses that match employees' individual learning styles. Learning experience can't stay behind the technological revolution and be indifferent to behavioral changes. That's why e-learning takes advantage of the latest HR Tech innovations like AR/VR, gamification, and AI.

8. VR Solutions. Just as the name implies, virtual reality puts you inside the activity. Making the experience as real as possible. This is another exciting aspect of HR Technology that helps connect with the respective action in 3D. For example, Bank of America rolls out a VR training program across nearly 4,300 locations to improve customer service. Walmart uses a VR training platform to teach new hires goods-pickup skills. PwC worked with the VR platform to conduct soft skills training.

9. Performance Management. Companies often expect high employee performance. However, the performance process generates countless essential data, and companies are getting tired of having too many tools. The current challenge is to design end-to-end systems that offer to conduct such activities as collaboration, check-ins, OKR goal management, development planning, and other features in one place.

10. Employee-centric HR software. The HR software is built to suit a matching task. Types of HR software vary from Talent Acquisition and Applicant Tracking Systems to Communication tools, Benefits Administration and Payroll Systems. The significant shift in 2021 focuses on employee experience (EX). No employee wants to log in to the HR system unless absolutely necessary. Current systems need an upscale in the running and design to make employees willingly use it and stay engaged.

The Mindy Mindfulness Application

Why do companies need HR Tech software?

  • Enhanced Decision-Making Process: You can never go wrong with HR Tech software. Manually handling the daily routine or activities of staff could be quite tedious, and important decisions could be omitted. HR software is used to enhance decision-making and to get things done effortlessly.
  • Data Security: One way of securing tons of staff’s details with maximum security is implementing data safety solutions in HR Tech software. With proper data management systems, companies can keep employees’ data highly confidential. 
  • Daily Routine Monitoring: HR software helps to do more in less time and effectively. Those daily attendance long payroll lists can be properly attended to just at the snap of your fingers.
  • It Reduces Errors: Machines do not get fatigued, therefore, are not prone to making errors compared to the human brain. Thus, speed and accuracy are guaranteed when you make use of the HR software system.
  • Cost Minimization: HR software allows employees to enjoy a pleasurable work benefit without incurring extra cost. Activities as regards payroll sorting, insurance, and other work experiences.
  • It Promotes Employee Development: With HR software, you don’t have to spend so much as a company hiring staff and then sending them to get trained for their roles when software could come to your rescue. Your team develops their intellectual skills with constant interaction with the software.
  • Efficiency and Productivity: Through HR software automation, many actions can be done more effectively in less time and with little effort.

Technologies we use at LeanCode

Why are mobile-first solutions a must for HR Tech?

According to IBM, 70% of HR executives say the HR function is ripe for reinvention. One area that requires improvement is the deeply personalized experience-centric design of HR software.

Mobile applications nowadays simplify many business functions and operations and should match behavioral patterns.

1. The lack of mobile-centricity causes unnecessary complications and delays in the company's functioning. The number of employees working remotely or while commuting created the need for technology to work, for all staff, wherever they are, and it has become more critical than ever.

2. Mobile-centric HR processes and technology is key success factor for business. Users expect to be able to do anything on their phones, from browser searches to online shopping, bank payments to bookings. If any business is not adapted to it, it lowers its chances of profit.

3. Mobile-first HR technology simplifies complexity. No matter if it is just adjusting the website to be mobile-friendly so the users can easily access a website with their mobile devices or adjusting the systems such as Applicant Tracking Systems to be easily manageable by employees on the go.

How to increase an HR Tech product's success rate?

The overall spending on HR technology is several thousand dollars per employee per year, making it a very attractive market for investment in digital HR Tech products and services.

According to the latest SierraCedar report, the average large company has 11 core HR systems. It's worth considering a few aspects before building another one:

1. Clarify the core problems your product is going to solve and prioritize them. Having too many features to offer at once may make the operation of the product incomprehensible to potential users/buyers and lead to a lack of interest.

2. Conduct in-depth research on your potential users' behavior and prepare a user story based on it. A user story is a general explanation of a software feature written from the perspective of the end-user or customer. Its purpose is to articulate how a piece of software will deliver a particular value back to them.

3. Take into account HR trends while designing your product. Trends often reflect cultural and behavioral changes that are closely related to users' needs and their way of using the product. For example, in 2020, there were over 3 billion smartphone users worldwide. If you don't make your product mobile-friendly, you will decrease your audience.

4. If you plan to build the next HR software, talk with business leaders about what is seen by them as a strategic business solution. Your product shouldn't be just another tool because the market is already broad and competitive. It should also fit the existing infrastructure in the company.

5. Ensure there is a Product Owner on the team who has control over the purpose of the developing product, the design, and implementation. There are hundreds of decisions to make during software development, and you need people who stay involved and are committed to this process from beginning to end.

At LeanCode, our priority is to help you develop great digital products. We have vast experience in the HR Tech industry, of which you can take advantage. We can guide you through the entire product development process, from validating the idea to delivering the final software.


Build with us the next successful HR Tech app!