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HRTech Defined: I. Core HRTech

On June 19, 2016, in HRExaminer, by John Sumser

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John Sumser looks at the technology trends that are driving the scope and content of Core HRTech.

One way of thinking about HR is that it begins its life when the company gets to about 20 people. That’s when someone has to really pay attention to the payroll and paperwork problem. Usually, the fledgling company’s accountant or bookkeeper ends up with the chore. At its most primitive level, HR is a set of files and forms that companies must attend to to meet regulatory requirements and deliver payroll and benefits.

Core HR is the current vogue term for those basic functions. In recent memory it’s been called HRIS (for Human Resources Management Information System), HRIT (Human Resources Information Technology), and HRM (Human Resources Management) among other things.

For now, let’s say that Core HRTech is all of the automation and processes required to manage the administrative functions associated with having employees. The basic functions include:

IA.  Payroll
IB.  Scheduling
IC.  Workforce Management
ID.  Workforce Planning (Leave)
IE.   Benefits Admin
IF.   Case Management
IG.  Employee Comm
IH.  Wellness
II.   Time and Attendance
IJ.  HRIS
IK.  Employee Portals (Self Serve)
IL.  Asset Management
IM.  Risk Management
IN.  Compliance Monitoring

As the company grows, each of these functions expands to include all sorts of data about the employee. On some levels, Core HRTech is the most strategic asset in the company’s holdings. It includes precise inventories of what work is being doe and a solid picture of how employees consume benefits. Employee profiles are usually a part of the HRIS. Our decision to include Employee Communications (IG) is slightly controversial. Core Tech does not include Talent Management, Implementation and Transformation, Data & Analytics or Organizational Development. In an earlier era, it would have been called “the paperwork.”

Core HRTech is provided by both Suite providers and the subcomponents are available from specialists in each area.

Current Trends

Core HRTech is always driven by two things: changes in regulation and changes in technology.

The Affordable Care Act (ACA or Obamacare), shifts in immigration documentation and an expansion of the number of entities regulating payroll (now over 400 municipalities in the US alone) drive necessary improvements in functionality. The burden of meeting regulatory requirements has always been high. Today, many vendors offer a range of services designed to ensure that their clients are compliant with all of the relevant regulations. This includes tools for forecasting the relationship between labor expenditures and benefits obligations, payroll accuracy and benefits complexities. While it doesn’t feel like Silicon Valley style innovation, this is where HR departments fight the ground war.

There are a number of technology trends that are driving the scope and content of Core HRTech.

  • Social Media: As we become increasingly conversant in social technology, there is a growing treasure trove of information about our employees that is publically available. The information is useful for better understanding the scope and capabilities of the workforce. There are a variety of tools for collecting, understanding and analyzing this data. Sentiment analysis, based on consumer style analysis of online behavior (on the company’s system and on the open web) is becoming a part of the Employee Communications infrastructure.
  • Privacy and Security: Personally identifiable information (PII), or Sensitive Personal Information (SPI) is information that can be used on its own or with other information to identify, contact, or locate a single person, or to identify an individual in context. The company strategy for managing PII and SPI can vary widely. The prevailing view is that the best policy is to meet the most conservative legal requirements. Typically, this means applying European law. One way of understanding security is that it is the technical method for ensuring privacy.
  • Mobile: The dawn of the smartphone era means that Core HRTech vendors are all experimenting with the degree to which the technology can function in your pocket. Most often, this involves employee level (user) interfaces. The complexities of administration still seem to require a desktop/laptop machine.
  • Benefits: The ACA changed the meaning of benefits as a competitive tool. Now that everyone is eleigible for Health Care, it is no longer a way to distinguish your employment brand. As a result, benefits are becoming less tangible and more like workplace flexibility. This trend increases administrative complexity.
  • Multiple Communications Channels: SMS, Messaging, Social Media, Email are all possible methods for reaching the workforce with information. There seems to be some generational difference in communications style.
  • Embedded Coaching: Although coaching is covered in the Organizational Development Section, most large Core HRTech suite vendors are beginning to build context sensitive coaching into their employee profile system.
  • Consumerization: There is heavy emphasis on delivering a software interface that mimics the sort of user experience found on the open web.

Future Scenarios

  • Embedded HR: The idea that HR is separate from normal operations is an artifact of an earlier time. Having to leave the system you work in (which already knows how long you’ve been on the job today) in order to enter your time in a Payroll system is beyond silly. HR functionality is beginning its move into operational software.
  • Expanding Scope: Vast components of the workforce are not direct employees. The workforce contains contractors, subcontractors, crowd sourced workers, distribution partners, supply chain employees and more. Any company that wants a real bead on its workforce needs data on all of these elements. Expect the integration to begin.
  • HR Artificial Intelligence: expect AI to emerge in each of the HR Silos. While no system can be smart about everything, every system can be smart about itself. It’s simpler to think of HR AI as a lot of really smart four year olds than some overarching intelligence. If it’s dumb and repeatable, AI will understand it.
  • BitCoin: Global payroll will increasingly include the ability to pay in digital currency. You can gain more information about this new kind of currency at www.cryptobrokers.cc.

Suite Vendors

The usual subjects for Core HRTech Suite offerings are:

  • ADP
  • Ceridian
  • IBM
  • Kronos
  • NGA (Outsourcing)
  • Namely
  • OneSourceVirtual (Workday Implementation)
  • Oracle
  • Orange HRM
  • SAP
  • Ultimate
  • Workday
  • Workforce Software

Each of these vendors offer significant subsets of the total Core HRTech package.

 

graphic for The 2019 Index of Intelligent Technology in HR


 
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