HR Automation Challenges: 9 Roadblocks in Digital Transformations You Must Know About
Are you considering implementing HR automation in your company? You're not alone.
In a survey conducted by consulting firm McKinsey on select companies, 56% of respondents indicated that they had adopted AI technologies in at least one function. Among respondents who adopted automation in human resources, 40% reported more than 20 percent cost savings.
SHRM also surveyed its members and discovered that about one-quarter of the respondents had used intelligent automation to support HR-related tasks.
While digital transformation can bring many benefits, it's essential to be aware of the potential challenges that may arise. From data privacy concerns to cost considerations, these nine challenges of HR automation technologies are roadblocks you'll want to watch out for.
🤖 What is HR automation?
Human resources automation comprises tools that automate repetitive manual tasks in workforce management, including onboarding, training, and feedback and development.
Some of the primary goals of automation efforts and HR automation tools are to:
- Release the burden of performing repetitive and mundane work tasks.
- Eliminate human manual errors, particularly for sensitive tasks covered by employment laws like payroll and tax filing.
- Enable employees to access HR services 24/7.
- Promote seamless and meaningful collaborations.
- Enable People Ops to perform more strategic tasks rather than exclusively focus on administrative tasks.
- Enable process improvement for complex processes with a dense series of activities and multiple stakeholders.
Fundamentally, HR automation is not meant to pre-program human interaction but to free up people so they can pursue more meaningful professional relationships.
😟 What are the 9 main challenges of HR automation?
With HR departments, the main difficulties lie in balancing technological advancements with the needs of employees.
With so many competing technologies and tools that serve different functions, it's understandable that HR departments can feel overwhelmed by all the possibilities.
According to a McKinsey survey on digital transformation, companies where people in key roles collaborated to ensure the success of digital transformations experienced a success rate 1.8 times higher than those who didn't. In addition, those whose senior management didn’t foster a sense of urgency in implementing digital transformation only had a 12 percent success rate.
Funding AI initiatives
Unfortunately, many small and mid-sized businesses (SMBs) don't have enough resources to devote to AI solutions. For those that allocate budgets for automation, the management teams may not assign as much importance to it as they would to product development and marketing campaigns.
AI investments are often costly at the beginning because some legacy tech may have to be overhauled.
The good news is that there's an increasing number of subscription-based solutions that SMBs can explore.
Many tools offer free trials so you can test some of their functionalities before fully committing to a pricier software solution.
Integrating AI solutions into existing in-house infrastructures
This challenge is where an in-house automation expert can help best. It is essential to understand the company's current digital ecosystem and how the new tools can integrate with them.
Plus, firms must be ready to let go of their legacy systems if needed.
In fact, old tech infrastructures are the most prone to cyberattacks because they employ outdated cybersecurity solutions.
Some of the questions that HR firms need to ask their automation vendors include:
- What is the integration process going to look like?
- How safe and secure will our files be during the transition?
- What other types of technologies does this platform support?
Lack of scalability
Some of the signs that an HR system isn't going to evolve and support the company's expansion are:
- It's still primarily manual, including letting employees manage their own time tracking and absence management.
- There's no room for flexibility, such as accommodating different types of workers like freelancers and contractors.
- Systems don't sync, and their tasks overlap. For example, you might use a tool for training and skills development and one for feedback. But you cannot sync the feedback on training effectiveness with the development and training tool.
- There is no consistent auditing of processes to determine if they can be streamlined/automated.
- There are no knowledge transfer and resiliency plans in case of employee turnover.
These issues are why HR departments need to have a clear automation strategy before implementing any initiatives.
Expensive and complex IT support
With the increasing popularity of subscription-based software-as-a-service (SaaS), companies have more freedom to experiment with different platforms. This development is also a good way for HR teams to evaluate potential vendors. Some of the questions firms can use to evaluate solutions providers are:
- What are your customer support services? How can we reach you for emergencies?
- How often do you train your clients if new updates come out, and are they for free?
- What are your cybersecurity plans?
Some vendors have hidden charges or are not upfront about how much additional features can cause, including enhancements and troubleshooting.
HR systems can comprise different vendors, depending on the needs of the business.
Aside from technology providers, companies also need to grapple with operations providers such as office and equipment suppliers. This area is where automation can provide the most benefit because many tasks can be programmed, including inventory and supply chain checks.
The primary challenge here is selecting a versatile tool to accommodate different types of vendors. Otherwise, it can be very time-consuming to oversee each supplier and ensure they consistently meet expectations.
Security and privacy concerns
According to the 2022 McKinsey survey, The state of AI, most firms identify cybersecurity as their main automation roadblock, as cyber attacks have continued to increase since 2019.
For HR systems, data breaches are disastrous as these files contain sensitive employee information, including addresses and performance evaluations.
Aside from cyber attacks, HR departments must balance providing customer service to employees and respecting their privacy, particularly for healthcare concerns.
Cybersecurity should be one of the main selling points of any automation system, including end-to-end encryption and multi-factor authentication. In addition, employees require constant training to safely and responsibly navigate digital systems.
🔐 Check out Zavvy's Data Security training course. You can try it for yourself and your team with our 14-day free trial.
Nothing inspires more fear in HR departments than compliance hiccups, whether tax filing errors or underpayments. To make matters more complicated, different countries have different labor regulations.
For example, each state can impose its laws in the US, and these policies can change quickly.
Many HR teams have scattered resource centers for regulatory-related information. Worse, these portals are often not as updated as they should be.
Multiple data-collecting and reporting tools
Since different types of technology develop at different rates, it's understandable that HR systems might need separate dashboards for specific needs. However, it is important to regularly evaluate existing tools or to scope the market for systems that can handle multiple complex tasks. Often, many software solutions essentially do the same thing.
Another disadvantage of having separate systems is that there is no standardized reporting methodology. This issue makes it difficult for companies to collate data effectively and run accurate reports. HR teams need to determine which solution works best for them and build their systems around it.
For example, you might use a tool for your employee onboarding process and another for employee surveys. But you cannot link the results of your onboarding survey with your onboarding reporting generated via the onboarding tool.
Complicated employee lifecycle management
During the onboarding stage alone, employees can drown in redundant paperwork that requires too much time and effort. This practice not only frustrates new joiners but adds to the manual work done by staff.
Instead, HR teams need to focus on a holistic enterprise resource planning (ERP) tool that can streamline all the processes on one dashboard.
Employee experience management tools don't have to be complicated. They just need to be user-friendly, accessible, and easy to operate and maintain.
😱 3 Key reasons why not having automated HR processes can be a problem
While there are several roadblocks in any digital transformation project, exploring potential automation solutions is still worth your time.
For example, according to SHRM, 69% of companies that used automation for recruitment said their turnaround times for filling positions have improved.
Aside from long-term cost savings, the following issues can escalate if HR processes are not automated:
- Error-prone. Some lapses are forgivable, others not so much. In the fiscal year 2021, the US Department of Labor discovered that the average back wages (salaries that were not paid) equaled three weeks' worth of work. This incident is why payroll management should be one of the first functions to be automated.
- Lost efficiency. At least 45% of repetitive work activities can be handled by automation software, reducing HR workload. Some companies lose months of labor to tedious work that a robotic process automation (RPA) algorithm could have handled in minutes. In addition, employees feel burnt out when having to extend their shifts to complete manual processes.
➡️ Check out how our customer, Storyblok, saves 68 hours per month with Zavvy's automated onboarding solution without compromising employee experience.
- Bad candidate application experience. The recruitment process is the company's best advertising campaign. Candidates can have a long-lasting impression of a firm based on how it handles the application process. Most job seekers ghost recruiters or give bad reviews if they feel that the process is too complicated or lacks transparency.
🤔 Is automation the answer? Only when done right
The answer is yes and no.
It all depends on how willing a firm is to future-proof its business.
It takes a lot of careful planning and investment to undertake automation projects. These efforts start with business leaders identifying how they want their companies to evolve.
Disruptions are here to stay, but a company's survival heavily depends on its capacity to embrace change.
Before embarking on an HR automation project, you'll need to establish what your company needs and focus on one solution at a time (agile methodology). And don't forget about leadership and employee buy-in.
Automation only works when your business has accepted and prepared for a bumpy road ahead.
With Zavvy, you don't get only a software tool but a partner that will guide you along your journey and help you address your specific challenges.
Our employee experience experts use industry and academic best practices to address the needs of your people and business.
Book a free 30 minutes demo to discover the many benefits of using Zavvy for automating your HR processes.