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February 03, 2021

A Look Back And Ahead At HCM Digital Technology Adoption

By Tony DiRomualdo  – Senior HR Research Director

The Hackett Group’s study of HR priorities and plans for 2021 delves into adoption of a wide variety of applications of digital technology. These encompass a broad cross-section of important tools now available to HR organizations. It is widely believed that the coronavirus pandemic, and the switch to digital business models and working from home that it triggered, accelerated HR’s adoption of digital technologies by years. Our study data confirms this and presents a snapshot of the scale and scope of HR’s embrace of digital technologies before and during the pandemic, as well as projections for 2021.

The selected applications of digital technology in HR include:

  • Talent acquisition and onboarding: Recruiting chatbots, candidate screening/assessment algorithms, video interviewing, onboarding chatbots
  • Learning: Learning videos, learning program delivery platforms/content libraries (e.g., Coursera, Udacity), learning experience platforms (e.g., Degreed, EdCast), virtual and augmented reality learning applications
  • Employee performance and engagement: collaboration tools (e.g., MS Teams, Zoom, Slack), employee sentiment analysis tools, pulse surveys and feedback systems, employee online activity monitoring tools
  • Reporting and analytics: Predictive modeling, real-time interactive dashboards
  • Employee services: Chatbots to handle employee inquiries, employee online health service

The data collected on these digital technology applications is shown in the chart below. It plots the adoption rates of the different categories along the following stages: Emerging: <25%, Gaining Traction: 25-50%, Majority Adoption: 50-75%, Pervasive Adoption: >75%.

 

Prior to 2020 most digital technologies were in the early stages of adoption

Only three of the digital technologies tracked in our study had been implemented by a majority of respondents before 2020. Learning videos were in place at 61% of HR organizations polled, making it the top application. Other applications adopted by a majority of participants were employee on-line health services and video interviewing. Learning program delivery platforms and collaboration tools were on the threshold of “Majority Adoption” while sentiment analysis tools and candidate assessment algorithms placed just barely in the “Gaining Traction” category. The rest of the technologies, representing more than half of those included in our study, were in “Emerging” stage prior to 2020.

Gauging the Covid-19 effect

2020 was a year marked by substantial growth spurts for the adoption of every technology we tracked. More than half jumped into the next stage of adoption maturity, and one – collaboration tools – leapfrogged an entire stage from “Gaining Traction” into “Pervasive Adoption”.

The percentage of HR organizations using virtual collaboration tools jumped by 46% making it the leading application in 2020. Video interviewing grew by 41% and is now ubiquitous among enterprises. Growth in these and the other leading applications in the past year was spurred by the impact of the pandemic on the organization, including the shift to working from home, which placed new demands on employee skills and behaviors. As a result, learning program delivery platforms experienced a boom with nearly three-quarters of organizations making extensive use of them by the end of last year.

Many of the technologies in the emerging stage before 2020 saw substantial growth. Employee sentiment analysis grew by 24% and is now used in a majority of respondent organizations. It allows for real-time monitoring of e-mail, social media and other electronic communications to identify patterns and gauge what’s top of mind for employees.
2020 appears to be the year when adoption of predictive modeling technologies finally got off the ground as HR organizations grappled with the volatility of supply and demand for workers impacted by the effects of the coronavirus. The number of organizations utilizing this digital technology application grew by 27%, more than double its previous adoption rate.

Another emerging technology that doubled its adoption rate was chatbots used to handle employee inquiries. The pandemic brought a slew of employee queries about health, leave and benefits providing an opportunity for more HR organizations to launch these tools. Adoption of recruiting and onboarding chatbots also increased twofold (although from a small base) as these processes were forced to become fully virtual.

The use of learning experience platforms doubled as the appetite of remote workers for engaging learning opportunities increased dramatically, especially during the initial lockdown period.
Lastly, adoption of virtual and augmented reality learning tools grew by two-fold fueled by a jump in the demand for bias-training tools as organizations stepped up their efforts to address diversity, inclusion and belonging issues.
Real-time HCM dashboards also saw a growth spurt as HR sought ways to monitor the real-time impact of Covid on the workforce and stay on top of the myriad initiatives launched to respond to the crisis.

 

What’s in store for 2021

Looking ahead to 2021, the top five applications reflect new priorities as the effects of Covid-19 on business and the workforce are expected to last well into the year, if not longer. Topping the list is pulse surveys and feedback systems, with 27% expecting to adopt them this year. These tools have become essential to stay abreast of the mood of the workforce operating under continued stressful conditions.

A quarter of respondents say they will be deploying monitoring tools to track and measure employee online work. This reflects concerns among some corporate leaders about sustaining the productivity of the remote workforce. Adoption of predictive modeling tools is on the agenda of another 24% of HR organizations, pushing it well into mainstream usage and suggesting this is not merely a fad tied to pandemic-driven volatility.

Other applications with notable growth prospects of 22% include candidate assessment algorithms and various types of chatbots. AI continues to make inroads into talent acquisition processes, especially efforts to increase the efficiency and effectiveness of candidate screening.

These tools have been growing in sophistication and are well suited to the virtual recruiting processes that organizations have had to adopt during the pandemic.

Furthermore, recruiting and onboarding chatbots are expected to more than double in growth, fueled by the virtualization of these processes. Chatbots to handle employee inquiries are poised to reach majority adoption.

These tools are potentially key enablers of digital HR service delivery and are seen as an effective way to automate high volumes of routine transactions, while at the same time making it easier for employees and managers to access information and get questions answered immediately. They also allow HR staff to concentrate on higher value work requiring expertise.

 

Digital service delivery at scale is the next learning curve for HR

While HR organizations have made impressive strides adopting a wide variety of digital technologies, the hardest part is just beginning. HR must master using these tools at scale. This means integrating them into the HR services and technology infrastructure.

Processes must be redesigned to ensure smooth human-technology co-delivery of services. Data generated by these tools must be standardized and aggregated so that it can be used across all of HR. Some HR jobs will need to be reconfigured and staff reskilled and upskilled. In order for HR’s digital transformation to keep pace with that of the business, it will need to prudently manage a growing portfolio of digital technology applications that make the business, the workforce, and HR itself, more productive, agile and innovative.

This is a challenge that will likely consume HR organizations well beyond 2021, but with a critical mass of digital technology adoption now occurring, HR must accelerate its learning curve and transformation efforts.