HR Tech: Evaluating and Selecting the Right Tools for Your Organization
The market is full of promising HR tech startups as well as powerful giants that promise to revolutionize your HR department and make the work easier, more fulfilling, and cost-effective for different companies.
Decision anxiety is a real thing, though!
Having a tool, a platform, and a gadget for every task imaginable makes the choice more difficult. To overcome indecisiveness, we’ll show you how to recognize your HR tech needs and learn to pick must-haves for your organization.
What is HR tech, exactly?
Human Resource tech consists of specific software tools HR professionals use to facilitate their day-to-day operations and tasks. An HR tech stack is a set of interlinked tools that work in unison, to provide a seamless workflow for HRs.
In general, HR tech tools come in two forms:
- Complete HR solutions — Big HR platforms (such as BambooHR, Factorial, and ADP) that let you perform a multitude of different HR tasks within a single platform. They can replace quite a lot of integrations, but none of them can handle everything with the same level of quality. While providing other services at the same time, some will, for example, have more advanced time-tracking capabilities.
- (More or less) specialized HR tools — HR software that focuses on particular HR tasks, for example, PTO tracking tools such as VacationTracker. Provided that they integrate well with the remaining tools you’ve picked, they work exceptionally well for their respective areas.
Which tasks does HR tech help with?
Everything — that’s why the market is saturated with innovative HR tools, and why HR pros continuously try them out to find the best ones!
Applicant Tracking System (ATS) is an HR software that handles everything related to potential employees and candidate lifecycle, including candidate sourcing, outreach, attracting, and communication throughout the employment process. The purpose of an ATS is to make the hiring process more efficient.
Learning Management System (LMS) covers employee learning and development. Investing in employees’ knowledge and skills improves employee retention and job satisfaction — so LMS covers not only training required for their position, but onboarding, evaluation, and additional education. LMS reports will provide precious data about their learning pace and knowledge scores, among other things.
Leave management software handles everything paid and unpaid leave-related. Knowing the type of leave an employee took (holidays, personal time off, sick days, etc) lets you file the taxes and payroll correctly, and stay compliant no matter where your staff works, and when. Additionally, it will help you plan ahead, and assign work and shifts accordingly.
Here’s an example of what it looks like in Vacation Tracker:
Payroll management software automates payroll-related activities: they calculate gross and net salaries, other payment types, tax withholdings, and portions dedicated to insurance, benefits, and retirement. Payroll software can also generate tax forms, print checks, and track time for employees paid by the hour, so the company stays compliant.
Employee engagement is a thing of strategy more than software. There are many ways to keep the workforce happy and just as many types of employee engagement tools. Virtual water cooler, quizzes, employee birthday calendars, reward systems… The list goes on, and sometimes your existing tools can help keep staff engaged. Think Slack and the built-in huddle option for quick calls, group chats, or dozens of apps you can add with a click or two. It’s what you have in your ❤️, not what you have in your tech stack!
What to consider when picking the tools for your HR tech stack
On a more precise note, here are the most important facts to consider when you’re deciding whether to pick a specific tool or keep looking:
- Current organization size and budget. Buying what you’ve heard was “the best thing in HR” will not only waste your resources but slow the processes down and annoy your HRs. Huge platforms aren’t really intended for SMBs and startups, although they may have affordable plans and generous free trials. When you need a comprehensive platform, penny-pinching is even worse: cheapskate always pays twice! 👀
- The organization’s growth potential and tool scalability. Company growth is one of the rare wonderful stressors to experience — don’t ruin it with tools that can’t keep up for a while.
- Specific business needs of your HR department. Who will better know what they need than the very people who will use the HR stack in question?
- The cloud service model of the HR tools you need. There are three cloud service models of HR tech tools:
- SaaS (Software as a Service) is the most popular choice, ideal for companies that only need minimal customization. SaaS-based HR tools are convenient and straightforward, requiring little technical upkeep and knowledge — service providers take care of everything.
- PaaS (Platform as a Service) is a better option for companies with highly specific needs, as it allows more custom HR solutions. PaaS will provide you with tools to create and manage your own application, while the PaaS provider handles the servers and storage.
- Iaas (Infrastructure as a Service) is good for companies that require notably high-security levels for sensitive data. Iaas is the most complex and advanced in terms of security and compliance, letting users fully configure the software.
- The recent developments in HR tech regarding AI. AI use in HR isn’t new: ATS uses machine learning to crunch the numbers and paint the bigger picture with data. However, here are some ethical concerns regarding hiring bias and losing human connection… among other things.
The bottom line
Assembling an HR tech stack is a challenge, with the rich offer at your disposal.
To avoid investing in an ill-fitting solution:
- Learn what exactly you need help with, and let your HR staff fill you in about their needs;
- Decide whether would you prefer an all-in-one HR software, or would you like to have a couple of top performers for several areas;
- Consider your current organization size and structure;
- Make sure your tools are scalable enough to allow use when you expand and grow;
- Decide between SaaS, PaaS, or IaaS, depending on how custom your HR tech needs to be, and how secure;
- Stay on top of new HR tech and try new, AI-powered tools, but tread with care.
A journalist turned content writer – Anja uses her investigative skills to produce high-quality SaaS, Marketing, and HR content.