HR Technology

HR technology, often abbreviated as “HR tech,” comprises software and digital tools that organizations use to manage human relations functions, such as hiring, payroll, benefits, time tracking, and performance management. HR technology can help streamline repeatable personnel processes and centralize employee information. It also can provide more consistency in data management, making data-driven analysis and reporting easier. It can be a standalone tool or an integrated set of systems that share data across functional areas.

What Is HR Technology and How Does It Work?

Human resources technology, often called HR technology or HR tech, is a software system or set of integrated systems designed to support HR processes such as:

Hiring and onboarding
Payroll processing
Scheduling and time tracking
Benefits administration
Performance management

Many businesses use HR software to provide employee self-service (ESS), which empowers employees to handle many HR-related tasks, requests and questions through a single sign-on (SSO) portal.

HR technology can enhance productivity, improve the employee experience and simplify data-driven analysis. However, it cannot take the place of HR leadership and expertise. Businesses still need experienced people who can address employee well-being and engagement and foster a workplace culture that supports the organization’s mission and goals.

What Problems Does HR Technology Help Solve?

HR operations often require repetitive processes and detailed data to properly manage day-to-day tasks, from hiring and onboarding to managing open benefits enrollment.

Without HR technology, small and medium-sized businesses often find difficulties with:

Manual data entry, whether in spreadsheets or computer systems, typed in by different staff members.
Inconsistencies created as managers and other personnel from different departments must record approvals and hand off documentation.
Challenges in analyzing trends and writing reports due to data inconsistencies.
Finding the time to manage employee requests, such as changes in schedules, time off requests and updates on direct deposits.
Managing tasks across multiple locations so that, no matter where they work, employees all receive the same information and service.

What Are Common HR Tech Tools?

HR technology is often outsourced to a third party. Among the common HR outsourcing providers are:

Professional employer organizations (PEOs).
Administrative services organizations (ASOs).
Human resources outsourcing companies (HROs).
Payroll processors and similar single-service providers.

Let’s review some common HR tech tools that can be contracted for individually or as part of a comprehensive human resources management system (HRMS).

Core HR

A core HR system is the foundation of HR tech. It’s the system of record that holds employee data, employment status, and compliance documentation that the rest of the HR system depends on.

Applicant tracking system (ATS)

Applicant tracking system (ATS) software helps organizations manage hiring from start to finish: job postings, applications, resume screenings, interview scheduling and making offers. ATS systems may use AI to make the process even more efficient and incorporate machine learning to reduce the chance of bias.

Onboarding workflows and document collection

The onboarding process involves different departmental workflows, including verifying employment eligibility, collecting personal information and emergency contacts, enrolling in benefits and more. HR technology coordinates activities to cover all the bases.

Time and attendance

Scheduling, attendance, and requests for time off (paid or unpaid) can be tracked using HR technology.

Payroll processing and payroll reporting

Many SMBs regard HR technology as essential for payroll processing and payroll reporting, including the accurate calculation of withholdings and payroll taxes, as well as remittances.

Benefits administration support

Benefits administration involves designing, managing, and delivering employee benefits programs, including health insurance, retirement plans and wellness initiatives. It encompasses such tasks as enrollment, eligibility management and compliance guidance.

Performance management

Effective performance management is a key to keeping good employees, tracking improvements in performance and keeping an eye on marginal performers. Documentation is critically important, and HR technology helps to keep performance management on track, consistent and organized.

Learning management system (LMS)

Employers can use HR tech to help develop employees through training. An LMS can serve as the repository for required training documents, videos and other training tools while tracking performance and completion.

Employee surveys and engagement

Employee engagement is a core focus of modern HR technology, with tools like human capital management (HCM), pulse surveys, and analytics to help organizations measure sentiment and support career growth.

Employee self-service

An employee self-service portal (often called an ESS portal) is a secure online site or app that allows employees to access and update HR information and tools without having to submit every request to human relations staff.

HR analytics and reporting

When you want to find out something regarding your workforce (for example, average retention time or progress on learning goals), HR technology will let your human relations staff pull the data you need when you need it.

How Do Different Types of HR Technology Compare?

Businesses use a wide range of HR technology systems to serve their HR needs. Here’s a quick look at three of the most common types: HRIS (human resources information system), HRMS (human resources management system) and HCM system (human capital management system).

Type of system	What it usually means	What it typically covers
HRIS	Core HR information system	What it typically covers
HRMS	HR management system	HRIS + broader HR management features
HCM	Human capital management	HRMS + talent/performance/analytics emphasis

How Do You Choose HR Technology for Your Business?

Choosing HR technology for your particular business needs is a complex decision driven by many factors. The size of your workforce, your business goals and your budget are three main factors, naturally.

That said, here’s a checklist to help you decide how to make the choice.

What processes are taking the most time right now?
What data must stay accurate and consistent across systems?
What must integrate (payroll, time, benefits, accounting)?
What reporting do leaders need monthly/quarterly?
What user groups need access (HR, managers, employees)?
What implementation resources do you have (time, owners, budget range)?
What security, privacy, and access controls are required?

FAQ

Is HR technology the same as an HRIS?

Not exactly. HR technology is the broader category of tools that support HR work. An HRIS usually refers to the core system of record for employee data and workflows.

What tools are typically included in HR technology?

Common tools include core HR records, payroll and payroll reporting, applicant tracking systems, onboarding workflows, time and attendance, benefits administration support, performance management, and HR analytics and reporting capabilities overall.

How can a business choose the right HR technology?

To choose the right HR technology, businesses can start by mapping the processes that consume the most time, then define data and reporting needs, required integrations, user access, security requirements and implementation ownership before comparing options and vendors.