What Is HR Technology? Types, Benefits and Who Needs It in 2024

Even as the HR Technology Conference co-chair, I still hear, “What is HR tech, and why does it matter?”

The HR tech evangelist in me wants to respond with questions like:

Why would a company want to reduce its onboarding process from a full week to less than a day?
What if employees could instantly access the data that matters most to them?
Why would HR want to reenter data that could automatically populate across the entire organization?
How would a company benefit from no payroll errors?
and many, many more

But frankly, that wouldn’t speak to the vast benefits of HR technology. At the end of the day, HR tech helps HR pros do what they do best: empower employees.

That’s simply impossible if HR is constantly weighed down by tedious and redundant manual tasks. Especially when those manual tasks come from entering data employees could — and always should — manage themselves.

Let’s explore what HR tech really is and why it’s crucial for businesses to use it and bust the myth that it can replace HR pros.

What is HR technology?

HR tech can refer to a lot of tools and programs, but essentially, it’s any software (and sometimes hardware) that helps automate and simplify HR’s role. It’s indispensable for many of HR’s core functions, like:

compliance
payroll processing
benefits administration
talent acquisition
talent management
development and performance reviews
reports, analytics and research

The ideal HR tech should also be available in a single software with one login and password. This removes the hassle of multiple, disjointed systems so HR can focus on culture, operations and more.

Why is HR technology important?

Just as tech simplifies our lives in nearly everything we do — from online shopping to brushing our teeth — HR technology makes work easier by automating tedious, data-driven tasks. Organizations that use it enjoy:

high productivity from automation
fewer overhead costs from manual work
lower liability from errors
a central repository for employee data

Together, these advantages increase a company’s ROI, as HR spends less time tracking down hard-to-find data or processing payroll.

But for employees, the right HR tech defines their experience. Think about it this way: Have you ever sat on hold, waiting for HR to update a simple piece of info that you could’ve easily changed yourself? Or have you ever submitted a time-off request months in advance, only to discover it idled in a supervisor’s inbox, unseen and unapproved?

It doesn’t take many of these types of scenarios to frustrate employees. In fact, 77% of them said they were fed up with outdated workplace technology, according to a OnePoll survey commissioned by Paycom. An astonishing 67% of workers said they would take a pay cut for tech that’s twice as good as what they have.

That’s because effective HR tech gives them instant access to everything they need — no matter when they need it.

HR technology tools: Types and benefits

The use of HR tech isn’t limited to access and answers. That’s only a fraction of what HR technology is truly capable of.

Let’s dive into seven applications for HR tech and how they positively transform businesses.

1. Payroll management systems

If there’s one function a company must get right, it’s paying employees. But between base salaries, bonuses, commissions, expense reimbursements, benefit deductions and taxes, there’s a huge margin for error.

That’s why HR professionals rely on payroll management systems — or software — to save time and ensure accuracy by automating:

earnings
payment calculations
pay stub generation
time and attendance tracking
leave management

More advanced tech even gets ahead of painful payroll errors by letting employees do their own payroll.

2. Benefits management software

Compensation is more than just salaries. Benefits management software, as the name implies, helps HR and employees easily manage the other half of the equation, including:

PTO
vacations
parental leave
health insurance
and more

It’s not enough for an organization to offer benefits; they also have to be accessible and easy to manage. And in a single HR software, any modification an employee makes to their benefits should seamlessly populate in payroll. Combined, this saves HR time, prevents costly data errors and simplifies the entire benefits enrollment process.

3. Talent management software

Every employee and applicant has a vast collection of data. HR uses talent management software to account for this information and simplify:

workforce planning
recruitment
onboarding
development
succession planning

Self-service HR tech is perhaps the most prominent example of these tools. After all, it helps HR accurately maintain data by empowering employees to manage it themselves.

Additionally, applicant tracking software helps recruiters easily screen candidates and maintain regular, transparent communication.

4. Expense management software

Beyond paying employees what they earn, businesses also need to track any expenses to be reimbursed through payroll. Expense management software automates the tedious aspects of this process and helps HR:

report
maintain records
reimburse employees in a timely manner
manage all company credit cards through one software

More versatile options will take accuracy a step further by pinpointing something like gas mileage to a precise figure.

5. Performance management software

By this point, we’ve covered how HR tech helps with the basics like payroll and applicant tracking. But how does it support a workforce’s long-term health?

Performance management software plays a vital role by monitoring and measuring employee productivity. This helps inform HR about:

training needs and goals
promotions and leadership potential
employee strengths and weaknesses

Perhaps most importantly, performance management software helps supervisors prepare for and conduct evaluations. Rather than relying on handwritten notes or other error-prone methods, a manager can access everything they need — like key statistics and evidence — right from their HR software.

6. Learning management software

Evaluating performance is only a piece of the formula for a thriving workforce. Organizations also need the means to efficiently develop it. Historically, instructor-led training was considered the go-to training method. For today’s fast-moving, technological workplaces, however, learning management software (LMS) is the most accessible and intuitive option to quickly upskill and reskill employees.

LMS helps HR create, manage, adapt and instantly deliver necessary training materials to any number of employees. The most effective LMS:

reduces training costs
strengthens compliance
boosts employee retention
facilitates upskilling and reskilling

Most employees seek growth in their careers. LMS is the ideal tool for developing and cultivating them.

7. Employee engagement software

With every tool to help employees manage their work lives, there’s just one missing component: communication! Sure, HR tech gives workers more agency — and efficiency — but it doesn’t replace the human touch. In fact, employee engagement software can help enhance it.

HR pros rely on this tech to interact with employees, collect feedback, and boost morale and workplace satisfaction. Employee engagement software also helps HR build and maintain a culture around communication. This can range from conducting surveys to a simple, easy-to-use interface for employees to ask questions. At its best, employee engagement software should help employers:

strengthen their brand and culture
encourage workers to share their opinions and voice concerns
increase retention through feedback and acknowledgement
identify the specific sources of recurring issues like attrition
make informed decisions about what their workforces really need

Really, employee engagement software is the exclamation point of comprehensive HR tech. While every other piece of software boosts efficiency and accuracy, this invaluable tool brings everyone in an organization closer.

How does HR technology help HR?

The right software is indispensable for HR pros. It automates the more tedious aspects of their roles while granting them the agility to pivot, adapt and knowledgably support employees.

But that’s the briefest summary of the abundant advantages HR offers. Let’s explore eight specific ways powerful software empowers HR to truly thrive.

1. Stronger recruitment

Since applicant tracking software eliminates the need to manually vet applications and candidate correspondence, HR can focus on finding the perfect fit for an opening. At the same time, the right HR tech offers hiring managers tools to easily schedule, organize and assess interviews — all from the same single software.

Beyond managing applicants, HR tech also helps recruiters vet and find them. Sourcing tools can target specific candidates and skills, scanning resumes and excluding talent that doesn’t fit a preset criteria. Some options even automatically post to popular job sites like Indeed and LinkedIn.

2. Real-time analytics

In Frank Herbert’s classic novel, Dune, “Mentats” are human supercomputers. They quickly analyze and assess data about planets, the empire, space travel and virtually everything beyond the stars. And with the right HR software, HR pros can act as Mentats for their company.

Comprehensive reporting tools help HR — and even the C-suite — make important decisions around key business areas. The tech quickly aggregates data around:

productivity
workplace trends
turnover
hiring
compliance
and anything a business finds relevant

And since reporting software can comb real-time data, HR has the means to identify problem areas and quickly start devising proactive solutions.

3. Less errors

When you need to remember a series of important dates, what’s easier: trying to dedicate the appointments to memory or entering them in a calendar app that automatically reminds you about the upcoming events?

If you lean toward the latter — and you absolutely should — then you already have a strong idea of why HR tech is vital for data integrity. Essentially, the fewer times information is entered means the fewer opportunities to get it wrong.

With HR tech that’s available in a single software, data only needs to be entered once by an employee (who knows it best). From there, the rest of the software populates without time-consuming data reentry.

4. Streamlined onboarding

Historically, new hires rarely start working on Day 1. They may not even have a chance to learn and train. Instead, they’re busy completing:

benefits enrollment
employee agreements
tax forms
data requests that could’ve been addressed sooner

With effective onboarding software, new hires don’t have to wade through a tedious process before they start working. The tech allows HR to create a template for onboarding and empowers employees to complete this important step early. In turn, new hires can focus on their jobs — not paperwork.

5. Employee data security

HR professionals wear a lot of hats. They can be advisors, analysts, researchers, moderators, educators and more. Whatever roles they assume, it’s unquestionably crucial they always maintain one: guardian of employee data.

Access and convenience should never come at the cost of security. Fortunately, truly seamless software doesn’t force HR to risk exposure for a better employee experience. It compiles data in one place — protected by one login and password — so HR or employees don’t have to navigate multiple systems to precariously reenter information they’ve already provided. Even better, a single HR software eliminates the need to store login or other important data on sticky notes or in unencrypted files.

6. Improved tracking and scheduling

Though organizations often work toward a single goal, every employee has their own unique responsibility in achieving it. Time management software helps prevent overlapping meetings and noncompliant shifts, like those that violate predictive scheduling laws.

Most importantly, it allows businesses to perform with maximum productivity. Even the most efficient individuals can waste time if their team is never on the same page. Strong tracking and scheduling tools encourage companywide alignment and automate an otherwise moving target for HR.

7. Intuitive talent management

HR tech should always be designed with the employee in mind. In fact, most executives and HR professionals agree it’s invaluable for engaging and retaining employees. An overwhelming 4 in 5 (81%) of them agreed functioning, up-to-date and user-friendly HR tech improves employee workflow and productivity, according to a January 2022 OnePoll survey commissioned by Paycom.

That’s not just wishful thinking on the organizations’ part, either. Nearly 2 in 3 (64%) employees claim HR tech has an impact on their overall job satisfaction, according to a July 2022 Morning Consult study commissioned by Paycom. It makes sense, given effective tech can help HR easily craft engagement and development programs to help employees:

grow and adapt
upskill and reskill
address important concerns
communicate and provide feedback
enjoy a lifelong benefit from their organizations

At the same time, powerful HR tech helps employees forge their professional journeys by tracking and identifying their strengths, weaknesses and general areas of improvement.

8. Reduced time

Whether it was manually calculating payroll or sifting through a seemingly endless spreadsheet of employee data, HR tasks have often been intensive, meticulous and time-consuming. HR software automates the tedious aspects of this work, so HR can focus on strategic tasks and improving life for employees.

It sounds simple, but it’s at the heart of not just HR tech, but technology as a whole. After all, the less time we spend ensnared by data, the more opportunities we have to simply live.

Does HR technology replace HR professionals?

HR tech doesn’t replace the need for human involvement, but some employers still believe that myth. HR tech doesn’t seek to cut real people out of the equation entirely. Rather, it transforms HR so it has even more time to focus on employees. It’s the tedious, mindless tasks that dehumanize HR pros — not the freedom to do more with their careers and focus on priorities like:

strategy
compliance
communication

HR tech handles repetitive processes so HR can focus on what the software can’t. For example, HR tech can’t resolve conflict, empathize with employees or develop new engagement programs. In other words, HR tech helps protect and emphasize the “human” component of “human resources.”

HR that’s less focused on re-keying data and more centered on enhancing workplace culture and the employee experience is a massive advantage for businesses and their employees. KPMG, an international accounting firm, explains automation helps HR pros handle “high-volume, repetitive, rules-based tasks” so they can focus on ways to boost their company’s:

efficiency
performance
competitiveness

The right tech gives HR pros the opportunity to consider and execute how to make their organizations better. The time they save through automation even gives them the rare chance to experiment and test methods for improving the workplace.

Ultimately, HR tech eliminates short-term annoyances in favor of long-term improvement and fully actualized HR pros.

Who needs HR technology?

If a company employs anyone, it needs HR tech. However, what’s most important to a business may vary depending on its:

size
industry
location

Consider how HR software benefits organizations with different levels of employee head count.

1. Small businesses

At a small business, it’s rare for HR to be run by a team — let alone a specialized professional. Leaders who run these companies frequently moonlight as their own HR pro, and effective software is indispensable for keeping them out of the data weeds. It also helps them quickly address key compliance concerns or verify the exact moment a relevant law could start to impact their company.

2. Medium businesses

As organizations grow, employers must reconcile larger head count with compliance. Medium-sized businesses need accessible, convenient tech to attract and retain employees. At the same time, these companies also need to account for regulations that suddenly affect their business.

The right HR tech empowers employees to address both concerns through scalability. As the business grows, its HR software should be able to identify compliance challenges, bolster security and instantly connect employees with their data, regardless of how much exists.

3. Large businesses

Enterprises may seem to have HR down to science, but even massive companies can still rely on outdated legacy systems that grind operations to a crawl. With massive amounts of data, large businesses need a simple way to store, organize and access it whenever necessary.

Additionally, even though a company may have more employees, it doesn’t mean any of their individual voices mean less. The right HR tech can help them conduct surveys and gather anonymous feedback to help employers proactively address potential sources of disengagement and turnover.

What is the right HR technology?

We’ve covered a lot about HR tech. But of all the options your company has at its disposable, remember this: The right HR software is one that addresses each of your organization’s concerns and reduces HR’s manual effort. Ideally, the tech will automate most of your HR processes, boost productivity and protect the bottom line.

Paycom, for example, is a truly single HR software that provides businesses of any size with seamless HR management tools. Paycom even cut the labor needed for payroll processing by 90%, according to a commissioned Total Economic Impact^™ study conducted by Forrester Consulting on behalf of Paycom in June 2023. It also reduced the time spent compiling data by 90% and saved over 2,600 hours annually for the HR and accounting teams for the 2,500-employee composite company created for the study.

Behind Paycom’s approach is Beti^®, its employee-guided payroll experience. This tool transforms a historically backward-facing process. It works by automatically identifying payroll errors, then guiding employees to resolve them before submission.

Paycom’s single software also offers automation, enhanced communication and insightful reporting capabilities in:

Explore Paycom to learn what a truly single software does for your business.

DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.