How to Build a Powerful Human Resources Tech Stack

4 Min Read
By Jaagriti Sharma
August 20, 2021

Building a Successful HR Tech Stack

A strong human resources team is one that quickly evolves alongside its growing and evolving workforce. In addition to the shifts in demographics, trends, needs, and values, compensation and benefits have grown more mobile and adaptable, and regulatory complexity has increased. This ever-changing landscape requires human resources teams to use equally agile solutions to handle employee information, recruitment, retention, and more. Attracting quality talent and keeping your best employees, calls for an efficient and strong human resources tech stack.

A well-planned human resources tech stack can help you streamline activities into one comprehensive, user-friendly, and integrated process. But, there are a plethora of tools for HR professionals available today, and hundreds more are being released annually. Navigating the array of alternatives accessible to HR professionals can be intimidating.

What exactly is an HR Tech Stack?

HR management is seen as a strategic business department with responsibilities that include hiring, onboarding, training, succession planning, and more. An HR Tech Stack helps HR professionals to successfully accomplish these tasks, but what exactly is an HR Tech Stack? 

Any set of integrated digital tools and software used to streamline, optimize, or otherwise support a company's HR capabilities is referred to as a Human Resources technology stack. 

At its most basic, traditional operations, such as recruitment and hiring, can be systematized, and administrative activities, such as payroll and benefits, can be automated using an HR tech stack. Transactional tasks, such as payroll and benefits administration can also be handled by the tools in an HR tech stack, allowing HR professionals to focus on more strategic priorities. These tools can also generate detailed reports that aid in decision-making relating to larger organizational objectives, such as increasing staff retention and engagement. 

How to Set Up an HR Tech Stack?

So, where do you start when it comes to putting together the best HR tech stack for your company? To begin, you must assess your company's size, which includes your employees, revenue, and current HR processes. It’s also important to have an awareness of HR technology available on the market and the price range that best matches your needs and budget. Since no company is the same, HR tech stacks should not be built in exactly the same way. There is no hard formula to follow, but there are a couple of exercises that can help you to map out the best path forward.

First, you need to ask yourself: What does my team need? 

  • Set up a meeting with your human resources department's key parties. Walk yourselves through the steps of various standard HR processes together (think recruiting and interviewing for an open position, mandatory training, or any other procedures the department regularly oversees).
  • Visually map out every process to help improve your understanding of the needs at hand. Building a visual workflow can be as simple as writing down each stage of your process on sticky notes or a whiteboard.
  • Ask your team members to highlight any areas of your map that they believe could use improvements. This will allow you to identify bottlenecks, such as manual processes or communication failures that are impeding your team's efficiency. While designing your tech stack, keep these bottlenecks in mind as prioritized areas to improve. 

What to Address with an HR tech Stack?

To start a human resources tech stack, we recommend focusing on three core HR areas: administration, talent management, and workforce management.

Administration

Traditional HR back-office activities are the administrative functions of HR. Softwares that help with HR administration can include:

  • Payroll software automates payroll and helps your company keep track of employee wages and salary rates. With a single click, payroll software calculates total compensation for a specific pay period, debits the company bank account for that amount, and distributes funds to employees. Time monitoring, tax management, and reporting are common features in many payroll packages. Payroll software can also assist your company with duties such as time tracking, payroll management, tax management, reporting/analytics, and direct deposits. Payroll software should be one of the first tools your company invests in.
  • Employers and employees alike can also benefit from benefits administration software that makes enrolling in and managing benefits, such as health insurance or a 401k, simple. These systems are oftentimes combined with payroll softwares, as is the case with Gusto, and usually keeping track of employee data for cost and compliance reasons. A comprehensive platform can successfully manage online benefits enrollment, health/life insurance administration, HSA/FSA administration, retirement plan management, and deduction management.

Talent Management

Attracting, hiring, and retaining great hires are all part of talent management. In other words, developing and sustaining a competitive workforce. 

  • There are a few technologies that fulfill talent management functions, but applicant tracking software and job performance software are typically among the first software to be adapted.
  • By gathering application information in a structured database, applicant tracking softwares (ATS), like bambooHR, assist recruiters in managing job opportunities. ATSs can assist your company with tasks such as candidate tracking, candidate profiles, resume uploads, interview scheduling, and resume parsing. 
  • Employee feedback management software is used to gather employee feedback proactively and create safe spaces for employees to submit anonymous concerns, or just ask a question. Comprehensive platforms such as AllVoices can help your company with 360-degree feedback, case management, pulse surveys, whistle-blowing compliance, and more.
  • Hiring and recruitment are undoubtedly some of the most critical and frequent responsibilities of a human resources department. HR tech stack solutions like SingleSprout, or Lever make the recruitment process much more efficient with features like candidate databases, matching algorithms, white-labeled emails, interview schedulers, and ATS integrations- decreasing the time to hire by up to 90%.

Workforce Management

Workforce management focuses on allocating resources to increase an organization's productivity. While workforce management varies with every company, it usually entails the use of data analysis for scheduling, budgeting, or forecasting. 

  • An HR professional can spend the majority of their time on day-to-day workforce management. Maintaining updated information about employees used to take a lot of manual hours. Now, time & attendance softwares like PurelyTracking can take care of the heavy lifting, increasing staff productivity and reducing the number of manual hours spent by supervisors.
  • On the other hand, HR analytics software assists your HR department in making data-driven choices. HR analytics software, or business intelligence software like datapine, can combine large amounts of data, process it, and analyze it for relevant trends.
  • The majority of recruiters and managers believe that technology assists them in making better HR decisions. In fact, over 40% of HR professionals use advanced technology like AI to help them in their day-to-day. AI-based training platforms like Emtrain provide HR professionals with tools such as data-driven online training programs and microlessons to maintain relevant dialogue in their workplace.

Final Considerations

It is important to remember that the solutions of your HR tech stack can integrate with one another via built-in integrations, third-party platforms, or an open application programming interface (API). Keep compatibility in mind when choosing solutions, since tool integration can produce considerable benefits.

HR data such as social security numbers and other information such as salary, health insurance, and retirement plans must be protected from falling into the wrong hands. In building your tech stack, be sure to collaborate closely with internal IT specialists, IT services providers, or cloud HR software suppliers to guarantee that your employee information is protected from external breaches.

As the competition and responsibility of hiring, recruiting, maintaining, and developing employees grow, companies are turning to more advanced HR tech stacks to help them stay competitive. So, take a look at the HR tech stack you are developing, or have in place, how can you better manage and automate your processes, and connect with your employees in ways that matter?

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