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3 ways to achieve the full potential of HR technology
Challenges like resistance to change and working in silos can hinder HR technology use. Learn more about how HR leaders can overcome some of these issues.
HR leaders are being asked to take on more responsibilities than they ever have before. Technology can help HR address these new demands, but according to Gartner research, only 24% of HR departments are realizing the maximum business value of their technology.
Two important roles for HR technology are taking care of transactional work, which expands HR staff's capacity for more strategic work, and enabling HR staff to deliver better on business objectives. The end goal is to maximize the business value that HR technology brings to the entire organization.
Unfortunately, many HR departments only focus on the first role, and doing so traps them from maximizing business value. As a result, only 35% of HR leaders are confident their department's approach to technology is helping them achieve business objectives, according to a February 2024 Gartner survey.
Three problems with a capacity-focused approach that prevents HR leaders from realizing the full value of HR technology are focusing too much on foundational technology, HR staff wanting to preserve current ways of working, and working in silos so that end users are overwhelmed by competing HR software.
According to Gartner, to address this struggle, organizations must pivot to augmented HR, enabling HR to do its "new work in new ways" with technology. Gartner research showed that taking this approach can increase HR technology business value by up to 54%.
Here are three steps that HR leaders can take to achieve the full potential of HR technology.
1. Start with foundational building blocks
HR has struggled to move beyond the foundations when implementing HR technology software, often failing to resolve ongoing process issues. In fact, 47% of HR staff agreed that the use of HR technology software has damaged the function's reputation across the organization, according to Gartner research.
Unfortunately, because of low confidence in HR's ability to drive technology transformation, HR does not receive the stakeholder backing for more transformational technologies. HR needs to start small and take a building-block approach when engaging stakeholders by getting leader buy-in on smaller changes that build toward bigger, riskier transformational goals.
When taking a building-block approach to a technology roadmap, organizations should put the ultimate business need, such as driving employee productivity, at the top of the pyramid instead of an HR want. HR can then map the technologies they believe meet this need. They should start with the ideal technology, such as an AI coach chatbot, and then work down to the foundational HR technologies and processes that form the basis for these technologies, such as performance and workforce management platforms. The key is seeing that foundational changes are in service to the ultimate transformational technology and business need.
By breaking the transformation down into building blocks, leaders see business value taking shape and are able to envision leveling up to more transformative tools, such as HR virtual assistants or generative AI.
2. Shift mindsets to focus on value
Many HR staff are currently concerned about how evolving technology like AI may affect their jobs and careers. A Gartner survey from June 2023 found that nearly one-quarter of all employees think AI could replace jobs in the next five years.
Wondering about the potential impact of new technology is natural, but HR leaders must work to shift their staff's mindset so employees understand how new technology can help them do their jobs better instead of taking them away.
Shifting employees' mindsets requires showing them how technology can address the business problems that they want to solve. One way to achieve this is by becoming more transparent with vendors about the business value HR wants to deliver with their technology instead of only communicating with vendors when technology problems occur.
One example of shifting employees' mindsets is a global paper manufacturing company that uses a series of "wow" moments to convince their HR staff to feel excited about new technology. These moments happen when technology combines with the HR employees' expertise to improve an important moment in the employee experience.
The company first maps inputs to expand HR's aspirations for activities and how they could have more impact. Next, they identify a time when a key moment in an employee's overall experience, a technology's capability and the HR process all come together. Finally, they embed these "wow" moments into roles. This approach has led to increased engagement among end users and HR staff.
3. Formalize shared goals and create new roles
Often, HR technology is focused on process-driven solutions instead of a shared business outcome, which creates silos and leads to a frustrating end-user experience. As a result, nearly seven in 10 employees experienced at least one barrier when interacting with HR technology in the past 12 months, according to Gartner research.
In order to drive higher adoption of HR technology software and greater business value, HR leaders should institute shared goals and redesign roles that help align complementary solutions.
Some organizations have found success by focusing on a universal, shared outcome and judging every HR process against that outcome. The universal outcome helps HR compare investments, prioritize them and identify the skills that are needed for the best result.
HR teams are taking on more work and are more responsible for enabling organizational strategy than they have been in the past. Technology can best address these business demands. HR leaders need to ensure they are avoiding common HR technology value traps by leveraging foundational technology building blocks, inspiring staff to see the potential of new technology, establishing shared goals and redesigning roles to unlock the full value of technology.
Mark Whittle is vice president of research and advisory with Gartner's HR practice. He has particular expertise in HR function strategy and management, HR organizational structures, ways to increase CHRO influence with the CEO and board, employee experience and company culture.
