The phrase “HR automation” is almost comically ironic—robots and algorithms running the “human” resources department!
Lucky for us who fear a dystopian future run by machines, that’s actually not even close to the reality of HR automation.
Before we dive into that topic, however, it’s important to grasp the actual purpose of HR, which often gets lost in jokes about “TPS reports” and other cliches of endless bureaucracy and paperwork linked to HR processes—both true and fictional.
There are two reasons HR is necessary for a modern business:
- Compliance—without HR, an organization opens itself up to massive liability. Without the proper documentation and training, corporations risk fines from government, lawsuits from customers, sabotage from employees, and many other terrible no-good things that seem to happen anyway. Good HR reduces instances of those terrible things and lessens the overall risk.
- Businesses need HR because they have direct influence on an organization's most valuable asset—its people. From recruiting top talent to staff training to employee retention via providing a company culture where people enjoy coming to work, HR has a massive responsibility to steer the ship.
HR departments are constantly being asked to do more with less. No matter how many budget cuts an HR department must endure, they will never be allowed to slack in the employee documentation and compliance areas—the show must go on!
This is when HR automation can help alleviate stress for your HR department while also improving security, onboarding workflows, and time-to-hire.
In today’s post, we’ll do a deep dive into the functional aspects of HR automation, the signs indicating you need it, benefits you can expect, and an overview of what’s possible. It’s a lot to cover, so let’s get started!
What Is HR Automation?
HR is a document-driven business function. Consider the paper difference between a sales negotiation and onboarding an employee:
Sales = 1 product brochure, 1 PowerPoint presentation, 20+ hours of travel and meetings, 1 contract.
Employee onboarding = 2 hours of meetings/interviews, 1 offer letter, 1 candidate NDA, 1 restrictive covenant, 1 insurance packet per provider, 1 401k packet, 1 employee handbook, 1+ training manual… and the list goes on.
As you can see, it sort of goes without saying that there’s a lot of paperwork involved with HR processes.
At its core, HR automation seeks to optimize business processes while reducing risk.
Things like payroll accuracy, sensitive document compliance, and high employee morale all reduce an organization’s risk of damages from independent regulators, government, or unhappy employees.
In order to automate, however, companies must digitize their entire document workflow. So instead of paper contracts and filing cabinets, modern HR departments are using electronic signatures and Enterprise Content Management (ECM) systems.
Here are several examples of electronic documents stored in an ECM:
- Recruiting documents like applications and résumés
- Onboarding documents (waivers, confidentiality, etc.) and videos (training)
- Employee records management. Retain employee records according to government regulations in the repository.
- Employee benefits
- Tax forms
Once those items are digitized and stored in ECM software, that’s where the real fun begins because then you can introduce automation. Features like email reminders, sequenced checklists, and permissions-based access can all help HR processes happen, wait for it, automatically.
This means HR managers don’t have to type out email reminders, conduct repetitive staff trainings that can easily be handled through video, or walk around cubicles reminding people to review their stock options. (Related: see how the developer Q&A platform Stack Exchange used the HelloSign API to send and track regularly batched employee stock option grants paperwork.)
So that’s HR automation in a nutshell, but how do you know when you need it?
The Signs You Need HR Automation
The need for HR automation is akin to the need for email, or even oxygen—there’s no HR department that couldn’t benefit. But there are definitely some signs that you need to make HR automation a priority.
Here are a few warning signs to look out for:
Increased errors - Everyone makes mistakes, and most companies have a way to deal with correcting those mistakes; either through training or punishment. If mistakes are trending upward regardless of the corrective measures in place, it may be that the percentage of human error is mathematically too great to overcome. Machines and algorithms are fantastic for repetitive, mundane tasks that humans lose interest in quickly.
Dagrofa experienced the benefits that come along with reduced human errors when they automated their employee onboarding. After automating their HR paperwork with HelloSign’s API, they shared “... processes and contracts are more efficient with almost no errors. They're completed faster, employees are better onboarded, better trained, and the advantages are amazing: positive ROI in record time, less paperwork, less hassle..." Read the full case study here.
Before it’s time to scale - If your company plans to add several hundred employees, can your current HR system handle the increased workload? Instacart, the grocery delivery service, had the foresight to plan their HR processes digitally, giving them the ability to onboarding thousands of contractors without slowing them down. Read the full Instacart case study here.
Time management issues - HR manages a massive strategic advantage to the overall company – maintaining a great culture. But if they have no time to focus on innovative approaches to deliver employee experiences because they’re bogged down in paperwork, the organization won’t be able to make game-changing leaps.
Shrinking budgets/resources - HR departments are continually being asked to do more with less. Whether it’s based on a recession or just a general cutback, HR managers need a plan of what to do if they suddenly find themselves with 20% less staff. Things like recorded trainings and automatic document processing can be huge time savers that can fill up the gap left by a few fewer employees.
Be on the lookout for any of these signs that your HR department could use some digital assistance. And when/if you do make the leap, you can expect some pretty valuable outcomes.
The Possibilities of HR Automation
Automation and digital HR present a host of possibilities that can provide significant benefit to large organizations. Corresponding to the pain points of HR mentioned in the previous section, here are several ways automation can help.
Recruiting & Onboarding High Volumes of Contractors and Full-Time Employees
With the rise of the gig economy, many companies are leveraging contractors in order to innovate. Rather than the traditional hiring process, companies are increasingly using contractor application portals to handle onboarding. These web portals need to be fast, secure, and easy for both the applicant and the HR professional to use.
When a system like that is automated and transparent, both sides win. The HR department doesn’t have to sift through loads of paperwork and gets to use tags, search, and algorithms to make their job easier. In addition, the contractor knows exactly where she stands in terms of where she’s at in the application process.
Policies, Procedures, and Training
The use of learning management systems (LMS) are becoming more popular, and for good reason. An LMS allows you to capture institutional knowledge and distribute it throughout your entire organization with carefully configured access levels. This insures everyone gets the information they need on demand, as opposed to having to wait around for an in-person training.
When your company exists in multiple different time zones and regulatory areas, this service is invaluable!
Additionally, you can configure access based on prerequisites, meaning that an employee won’t have access until certain documents are signed or certifications passed. This helps keep organizations compliant.
If we know two things in this world, it’s that people love to get paid, but hate errors when it comes to their paychecks. Automating payroll has been around for a while, but wow, it is handy. It also delivers huge cost savings, cutting payroll processing up to 80%, according to Inc. Automated payroll is also more accurate and adheres to strict financial regulations like the Sarbanes-Oxley Act.
In overall utility, HR automation is extremely useful– and arguably necessary– to the modern business. We’d be remiss if we didn’t leave a word of caution, however.
Be wary of over-automating certain processes, especially recruiting. Make sure there’s a personal touch at strategic points along the way—nobody wants a job offer from a robot. You want to prioritize automating the mundane tasks, like paperwork, that can drag down an HR strategy into the ground. These will help free your HR department to make the most of their expertise.
HR automation, which is already widely in circulation among large organizations, is a component of an overall digital HR strategy. This is, of course, the key factor in using HR as a major strategic force for your business, as opposed to a bunch of paper pushers and compliance experts.