HR Automation – Here’s How to Do it Right

Introduction

Companies that don’t invest in HR automation will spend much time and money running their HR processes manually, only to find them laden with mistakes, oversights, and other issues. Moreover, their HR department will be busy handling the administrative workload, leaving little to no time for focusing on HR strategy.

Despite this being a major disadvantage, many organizations have still not automated their HR operations. This is often because they’re not sure how to make the transition without disrupting business, and the shift can feel overwhelming.

In this guide, we explain what HR automation is, including its benefits and challenges, and provide examples of the tasks that can be automated. Plus, follow our eight steps to automate your HR processes so you can make the transition with confidence and ease.

Key Takeaways

  • HR automation is the use of tools and technology to simplify and expedite manual and time-consuming HR processes, such as payroll, benefits administration, employee onboarding, and more.
  • The first step to automating your HR operations is to identify your company’s pain points and pick suitable tools to automate the processes that need improvement.
  • Additionally, conduct pilot tests and gather feedback throughout the adoption process to ensure your technology is ready for a full-scale launch.
  • Finally, provide training and change management support to employees, HR personnel, and other stakeholders for quick and effective adoption of your new software.

What Is HR Process Automation?

HR process automation refers to the use of technology to simplify, streamline, and optimize a company’s HR tasks. It uses tools such as Human Resources Information Systems (HRIS), AI-powered solutions, chatbots, and other HR automation software to reduce manual intervention, improve accuracy, and enhance efficiency in HR operations.

HR automation works best on repetitive, rule-based, and transactional tasks, such as payroll processing, employee onboarding, performance reviews, leave management, and more. It aims to save the time and effort HR professionals spend on routine tasks, allowing them to focus on strategic initiatives that contribute to organizational success.

Examples of HR Processes That Can Be Automated

Here are some examples of processes that can be streamlined using HR workflow automation tools.

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  • Recruitment processes: Automating job postings, screening candidates, scheduling interviews, and managing candidate communications.
  • Employee onboarding: Managing paperwork, sending welcome emails, assigning training modules, and setting up access to the necessary systems.
  • Time and attendance tracking: Approving and tracking leaves of absence, ensuring accurate accruals, and staying compliant with company policies.
  • Payroll processes: Pay calculations, tax deductions, direct deposits, and generating payslips to facilitate seamless and accurate payroll processing.
  • Benefits administration: Managing enrollment, tracking eligibility, handling changes in coverage, and facilitating communication regarding employee benefits.
  • Performance management: Setting goals, conducting performance reviews and self-appraisals, and storing and tracking performance data throughout the year.
  • Training and development: Creating custom courses, automating training assignments and reminders, and tracking completion.
  • Employee self-service: Enabling employees to update personal information, request time off, access policies, and enroll in benefits without HR intervention.
  • Offboarding: Automating exit interviews, returning equipment, revoking systems access, and managing final paychecks.

Benefits and Challenges of HR Automation

Automating your HR processes comes with many advantages but can also be challenging to execute.

Benefits

Let’s look at some key advantages of HR process automation.

Enhanced Efficiency

Automating HR processes streamlines repetitive tasks and completes them faster, saving you time that can be better spent on HR strategy. For example, you can use employee onboarding software to send automated welcome emails to new hires instead of writing individual emails every time.

Improved Accuracy

HR tasks such as time tracking and payroll are prone to fewer errors when automated. For instance, you’ll see fewer mistakes in data entry, calculations, and tax deductions.

Cost Savings

Implementing HR automation can also save you money. As an example, applicant tracking systems can help you make faster and more effective hiring decisions, thus reducing the costs associated with prolonged job vacancies and mis-hiring.

Better Compliance

HR software manages personnel records in compliance with data protection laws, provides tools for data security, and helps you adhere to other labor laws, such as those for minimum wages and overtime.

Positive Employee Experience

Self-service portals let employees manage their personal information, benefits, pay stubs, and time-off requests without waiting for HR assistance.

Data-Driven Decision-Making

The best HR software provides reporting and analytics tools, giving you insights into performance trends, training histories, and more, so you can make better decisions regarding pay, promotion, and employee development.

Scalability

Automated HR systems can easily accommodate the administrative workload of a growing workforce without the need to increase HR staff.

Challenges

Although it has many advantages, automating HR operations isn’t always straightforward. Here are some challenges you can expect.

High Set-up Costs

The initial costs of investing in sophisticated tools can deter companies from adopting HR automation—especially those with lower HR budgets.

Integration Complexities

It can be time-consuming and complex to input or migrate paper-based employee data and other records to HR systems or integrate legacy systems with newer ones. At this stage, there may also be an increase in mistakes, such as data duplication, data security breaches, or incomplete records.

Customization Challenges

HR solutions tend to provide fixed features with limited options for customization, which may not suit an organization’s unique HR needs. For instance, the reporting tools available in off-the-shelf solutions might not let you download reports for key metrics that are critical to you.

Resistance To Change

Employees, leaders, and HR staff might resist adopting new technology due to unfamiliarity or fear of job displacement. Further, a lack of proper training and change management might lead to underutilization or misuse of the technology.

Technical Glitches

Automated systems may encounter technical issues occasionally. Additionally, these systems could need frequent software updates or maintenance that can be both costly and disruptive to HR operations.

8 Steps To Automate Your HR Processes

Follow these eight simple steps to automate your HR processes effectively.

1. Assess Your Company’s Current Processes

The first thing to do is to identify and document your existing HR operations. If you already have these documented, make sure they’re updated and reflective of how you run your HR practices today. Additionally, survey your HR team to dive deeper into the daily tasks and projects they’re working on.

With the above information, you’ll need to analyze pain points and bottlenecks in each process. For example, you may learn that your payroll team spends too long fixing errors. Don’t forget to outline if something is working well already, so you can avoid trying to fix what’s not broken and focus solely on critical areas for improvement.

2. Set Clear Objectives for Your Automation Project

Once you’ve gained clarity on areas for improvement, define the specific goals and outcomes you aim to achieve through automation, such as time or cost savings, better accuracy, enhanced employee experience, or all of the above for different HR processes. Additionally, set key metrics and milestones for each of these outcomes.

For instance, you could target automating employee onboarding by the end of the next quarter. This way, your team has a clear set of goals and deadlines to work toward. Moreover, you can later measure success by going back to these key metrics.

3. Choose the Right Automation Tools and Technologies

Consider tools that align with your specific HR needs and the functions you’re looking to automate. For example, you may want an all-in-one solution that streamlines all administrative tasks. Alternatively, you may want to start with targeting a few key functions and upgrade later.

Here are some of the types of HR automation software solutions available today:

  • Human Resources Information Systems (HRIS): These are great for automating employee data management. You can store personnel data like personal information, training and performance histories, pay and promotion records, and more.
  • Applicant Tracking Systems (ATS): These solutions help to simplify and streamline the hiring process. You can post open roles to job boards, track job applications, communicate with candidates, schedule interviews, and share notes with other hiring team members in one place.
  • Payroll solutions: These let you automate pay calculations and tax deductions, making seamless and timely payments to employees. Some software even integrates with accounting tools for easy reporting.
  • Performance management tools: These allow employees to input or upload their own goals. Managers can review and make adjustments as needed. Further, managers and employees can complete appraisals, make notes, and rate performance during performance review cycles.
  • Learning Management Systems (LMS): This type of software enables you to create and publish online training courses and development programs. You can also track progress, send reminders, and add quizzes into the mix.
  • Human Resources Management Systems (HRMS): These offer features for multiple administrative and strategic HR processes from a single platform.
  • Human Capital Management (HCM): This software offers more features for strategic HR processes but has fewer tools for automating administrative tasks.

4. Conduct Pilot Testing

Run a small-scale pilot project to test the chosen tools before full-scale implementation. Evaluate usability, functionality, and integration capabilities to ensure you’ve picked a solution that works for your needs.

Additionally, gather user feedback through surveys and focus groups so you can make the necessary adjustments before rolling it out to other stakeholders.

5. Customize and Configure the System to Your Needs

You’ll need to tailor your system to align with your company’s specific HR processes and workflows. For example, in your new applicant tracking system, create relevant departments and add hiring team members to each one.

Further, configure user permissions, third-party integrations, and other settings so the system is fully set up and ready to use before launch. Most HR systems will have sales or account management agents who can help you through this process.

6. Migrate Your HR Data and Information

Next, it’s time to migrate your HR data into your automated systems. You could be migrating data from an old system to a newer one. It’s best to collaborate with systems experts and IT professionals to ensure data consistency and workflow continuity.

Alternatively, you may be manually transferring information stored in paper-based files, Excel docs, and more. This method is prone to data entry errors, so assign a dedicated team to input information and cross-check it in an organized, methodical way.

Finally, seek guidance from a compliance officer to check that you’re above board with data regulations and ask an IT specialist to make sure the new data is stored privately and securely.

7. Roll Out, Training, and Change Management

Consider rolling out the system in phases or modules rather than all at once, allowing employees to adapt to it gradually without feeling overwhelmed.

Provide comprehensive training to employees, managers, and HR staff on using the new tools effectively. You can do this through e-learning courses or hands-on workshops led by a facilitator who provides additional time to address questions and concerns.

In addition to training, develop change management strategies to address resistance and encourage adoption.

For instance, assign a few change champions. These are employees who may have been involved earlier on in the process, are familiar with the tools, and can help encourage other employees to adopt them. You can also consider recognition and other incentives to motivate your staff to use the new system.

Finally, offer continuous support through dedicated help desks, forums, or support tickets to address queries and issues promptly.

8. Monitor, Measure, and Iterate

Continuously monitor the performance and adoption of your new automated process using the key metrics established earlier. Moreover, collect feedback through focus groups and surveys and by analyzing employee queries through the adoption phase, so you can identify areas for improvement and optimization.

Best Practices When Automating Your HR Processes

Here are some best practices to consider when automating your HR processes.

Engagement and Communication

Involve key stakeholders from different departments early on. Understand their pain points and incorporate their feedback into the process.

Furthermore, communicate the benefits and purpose of the new system clearly, addressing how it will improve efficiency and solve their pain points. This way, they’re engaged and help encourage user adoption in their teams when you go live.

Thorough Research

Picking tools based solely on price or popularity can be disastrous, and you could end up committing to a system that’s not well-suited to your company’s specific needs. A poor system could damage your credibility with stakeholders, such as employees and HR team members.

Choose software that aligns with your needs. Additionally, consider scalability, integration capabilities, user-friendliness, and vendor support. Finally, ask the software sales team to provide you with a live demo or, preferably, a free trial, so you can test the product out before committing to it.

Maintenance and Support

Ensure ongoing maintenance and software updates for the new systems so they’re always current and running efficiently. The most effective way to do this is to collaborate with internal or external IT teams who can help with integration and technical support.

Importantly, communicate upcoming black-out periods to users and other stakeholders well in advance so you can minimize disruption during updates.

Don’t Forget the “Human” in Human Resources

While automation expedites HR processes, it may create a disconnect between employees and HR due to the lack of personal interaction and tailored support. Check in with employees from time to time to keep them engaged and assess their morale.

Further, automated tools are great for handling structured data and processes but struggle with nuanced decision-making that requires empathy or contextual understanding. HR professionals should still stay involved in conflict resolution, personal circumstances, and other sensitive matters that demand a human touch.

Conclusion

Today, a large chunk of administrative HR processes can be streamlined and automated, saving HR professionals time and effort and enabling them to focus more on strategic HR. However, HR automation is a mammoth project and can feel overwhelming to implement.

Breaking it down into simple steps can help you make the transition. Assess your current HR practices, identify pain points, and choose what processes to automate. Further, conduct pilot tests, customize the system, migrate your HR data carefully, and provide users with training to ensure minimum disruption at the time of launch.

FAQs

Can HR be fully automated?

How is automation expected to impact the future of HR?

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Yashna Wahal

Yashna has nearly a decade of experience in HR, covering topics like Talent & Development, Hiring, HR Business Partnering, Employee Engagement, Compensation and Performance Management. She's the former VP of HR at JP Morgan in London, followed by being the Head of HR at Plotify Financial in both London and New York. Yashna earned a BSC in Psychology from UCL and an MBA from Imperial College London.