December 11, 2019
The global HR tech market is booming and further growth is predicted by experts. With a skyrocketing number of latest HR tech tools, companies struggle to keep up and choose the right ones.
Even though they implement technology, they might not really see the effects. It’s not so rare that technology actually changes business for the bad. In what instances technology could have a negative effect? When technology is used to “patch up” processes that aren’t good, do not deliver value, aren’t effective or aligned with the organization’s mission.
Enrique Rubio is a founder of Hacking HR, a global learning community of HR leaders, practitioners, vendors, consultants, technologists, gathered together to discuss HR and technology. Enrique is also the co-founder of Cotopaxi, an artificial intelligence based recruitment platform for Latin America. Enrique was the advisor for the CHRO at the Inter-American Development Bank. With over 20 years of experience on the intersection of HR and tech world, he knows how to address the needs of both worlds.Enrique Rubio Founder
of Hacking HR
He commented on the current state of HR tech and outlined the biggest challenges lying ahead of this sector. Enrique also listed the most promising niches to automate or invest in and didn’t hesitate to access Amazon’s attempts of digital transformation. If you want to know why we should be hacking HR and what it really means, read on.
Enrique Rubio: We are having and will continue to have gigantic people and organizational challenges in the new world of work. These challenges are global in their nature and it’s not possible to overcome them individually. If we continue to see the global HR practice as fragmented as it is today, those challenges won’t be resolved. The problems we're dealing with are global and therefore need from a global approach to be resolved. In Hacking HR we bring people together to contribute to the conversation and help resolve some of those challenges. That’s why we are so eager to connect people and inform them of all things important at the intersection of future of work, technology, organizations and people.
ER: Hacking means changing things from the core. And doing so has implications on the “frontend” of whatever you’re working on. I chose the word hacking because although HR has undergone some changes in recent years, they have been quite superficial. We still have a lot of work ahead of us, profound work. But the question is, how do we change the “core” of HR so that the frontend also sees the necessary results? I think hacking perfectly reflects our approach to making changes on the back- and the frontend.
ER: One of the main challenges is that we are used to using technology to enhance existing processes or to make them more efficient. What’s happening now with the technology in this new world of work is that this technology can enhance both the bad things and the good things.
We have to take a step back in HR, to first look at our processes, assess whether they are adding value, and only then implement the technology, not the other way around. We won’t be able to find the proper software to improve our current processes if we can’t even find out whether they add value or not. The main challenge in connecting HR and technology is to instill this mindset among the HR community. Once we re-engineer our processes, we can move onto implementing the latest tech solutions.
The launch of Hacking HR San Diego Chapter, source: Enrique Rubio Linedin's profile
ER: I’ll give you one example which illustrates the risks quite well. Some time ago, Amazon introduced AI-based recruitment software and they had to turn it off rather quickly as it turned out to be biased against women and minorities. So what happened here was a case of not having the right processes and maybe the right people in place. Maybe the team wasn’t diverse to understand how their programming could affect the end result. If the implemented technology aggravated the process, then the process wasn’t good in the first place. The problem in their case wasn’t technology, it was the data they used to make recruitment decisions. The problem lay in the core processes: the approach to data and data collection methods.
ER: The examples I really like are Textio and Pymetrics cases. Textio realized that their written job descriptions might be biased, as in they used specific words which might have led to people thinking the job wasn’t for them. So what they did, they rewrote the job description to make it neutral. Using technology and data. Pymetrics used gamification for the recruitment process at Unilever which resulted in decreasing their hire time by 75%. Now, they can also find people who are a better match for their companies.
Let me just clear one thing up real quick: before you start thinking about automation, make sure you have the right processes in the right shape.
Still, there are HR areas that are stuck with paperwork like payroll, compensation, onboarding, leadership development. Concerning the latter, many organizations continue to use this old school model of one-size-fits-all solutions for learning. For example, they want you out of the office on a three-day training session catering to the whole sales department. But it’s out of the question that everyone in the department lacks the same capabilities, so the costly training time addresses the needs of only a part of the group. What technology can improve here is identifying the needs of individuals. Technology can help customize content for them or help HR create an outstanding learning experience. So it’s not all about automation but rather using technology to provide a better learning experience to your employees. And that’s one tiny example!
Another example is the chatbot phenomenon. Still, in a number of organizations, people answer questions in a one-on-one formula. Human to human, even when the questions are tier-1 in a shared services model. This is unsustainable because of the costs and inefficiencies. I’m not saying human contact is outdated, but what’s the point in a human employee answering a mundane question about the number of days off, when it could be easily answered by a chatbot in a matter of seconds? I see a lot of value in these areas.
ER: It’s booming! Whenever I see visualizations of the HR tech market, it’s gigantic. It’s fantastic to observe these companies doing all that work to help HR. Very often, HR doesn’t have the necessary capabilities to lead their own digital transformation, let alone the one in their companies and to overhaul the functions of their departments. And that’s where the level of digitization usually drops off, and considerably so. Lots of companies don’t understand how technology can help them. HR departments and managers should prepare for the outreach coming from tech folks and seek out opportunities for smooth digitization around them. We are still far from this point.
Right now, HR is at a point where it’s mostly collecting information from tech companies that come in a form of shiny sales pitches. What they often miss, is helping HR understand how the technology impacts both the front- and backend of the processes. Some unconsciously reject the idea of change, while others are quickly implementing everything they can get their hands on without giving the whole process a second thought. The bottom line right now is that HR needs to transform and think about what lies at its core. What is it that we’re doing? Maybe we should stop? What processes could deliver more value if we automated some of the things we’re doing?
ER: What could be happening soon is that a lot of HR tech companies will try to get into the same space. Artificial intelligence in recruitment became kind of mainstream. I think HR tech companies will start thinking about how to make themselves stand out from the rest of the market, because the solutions themselves will not be enough.
The market is getting crowded and solutions are increasingly overlapping. Some companies will probably disappear faster than others. I still see a lot of opportunities, but we need to be aware of the upcoming market boom. In addition, I look at the extreme fragmentation of the HR tech space with optimism and concern. While it is good to observe creativity and innovation thriving, it is also dangerous to think ahead and difficult to predict how to integrate all the pieces together.
Dive deeper into the experts' insights
Have you read our interviews with Hung Lee, Phillipa Penfold or Anna Ott? Based in different countries, they were able to provide us with various perspectives on the most important HR tech matters.