From robot servers at McDonalds to the recently released text-based conversational AI tool ChatGPT answering queries with incredible accuracy, automation has found its way into the daily operations of the enterprise by eliminating repetitive, mundane and administrative tasks. Automation is no longer a pipe dream – it’s very much here and already making a big impact on the transformation of many businesses.
According to a McKinsey survey, three-quarters of all respondents say their companies have already begun to automate business processes or plan to do so within the near future. There are many ways of describing the degrees of automation, however from usability perspective we like to think of three levels of HR Automation.
Level 1 is the Automation of Tasks, where an automation system such as RPA can take over the execution of structured matching and validation tasks such as scheduling interviews or running reports to ensure correct payouts before payroll goes for processing.
Level 2 is the Automation of Decisions, where an additional layer of decision making comes into play. Here the system follows a basic set of IFTTT instructions (If-This-Then-That) which enables the automation system to move transactions to their next logical stage. For example, an automated expense claim approval would go something like this – IF expense claim receipt is valid AND within budget, THEN automatically approve the request and inform the claimant, ELSE flag forward the claim for investigation.
Level 3 is the Automation of Insights, enabling the automation system to utilize HR and business datasets to predict future requirements and outcomes. Examples include predicting the manpower required to meet the future business plans (strategic workforce planning) or optimizing resource allocation given the demand and supply (employee rostering). Of course, there’s a lot more details to this, but that’s the gist of it.
At Lighthouse Consulting we have seen Finance, Production, and IT departments being the early adopters of automation. HR seems to be surprisingly behind in this shift, despite plenty of potential use cases and tools. This could be because of lack of foundational HR infrastructure or not being identified as a strategic priority or perhaps a combination of both. It may also be true that HR is holding itself back as change can be scary. That said, we believe that HR organizations that will make the move to automation with full clarity on impacts and outcomes will be rewarded with incredible efficiency and effectiveness gains.
The first step is for the HR to educate itself on what automation really means, the needs and expectations of business from HR in the near future, and the merits of introducing automation into their processes. The second step would be to identify the candidate process for automation on the basis of volume, infrastructure, complexity, and impact. Finally, it is critical to understand the ROI of implementing automation as well as the potential impact of losing human touch – it’s “human resources” after all. You don’t want to successfully automate your HR processes only to find out later that employees don’t appreciate it for legitimate human reasons.
The first step is for the HR to educate itself on what automation really means, the needs and expectations of business from HR in the near future, and the merits of introducing automation into their processes. The second step would be to identify the candidate process for automation on the basis of volume, infrastructure, complexity, and impact. Finally, it is critical to understand the ROI of implementing automation as well as the potential impact of losing human touch – it’s “human resources” after all. You don’t want to successfully automate your HR processes only to find out later that employees don’t appreciate it for legitimate human reasons.
“If we automate all of HR administration, there’s nothing left for us to do in HR!” is a common gripe we hear, and we don’t think that it is true. Let’s say you are at the gym and need the coach to help you improve your technique. Would you prefer using a self-service kiosk that gives you pre-programmed suggestions, or an actual human who understands your strengths and weaknesses, gives you tailored solutions that work for you, and motivates you on an ongoing basis to hit peak performance? HR functions true calling is being that coach and guide when managing talent, administration is just something that needs to happen – it should not be the focus of HR. So, there is enough important work to do, despite administrative automation. Granted, this may require HR to upskill itself. In Singapore, Ministry of Manpower has recently unveiled the HR Industry Transformation Plan which is a good starting point for that.
Ultimately, automation is about eliminating the bottlenecks in a process that lead to a loss of time and revenue. We understand that it can be all fine and dandy to point fingers at HR teams and tell them automation is the best thing since sliced bread, and that HR leaders should invest in it to better equip their teams to shift into a more consultative and strategic role leaving automation systems to manage the mundane grunt work of helpdesks and populating datasheets. The question that we at Lighthouse Consulting have been pondering over is – Do HR leaders understand the costs and benefits of automation well enough? To be clear, there are definitely some nuances to determining whether or not automation can prove to be a beneficial investment for businesses. We recommend this 7-dimensional HR automation decision making framework that HR leaders should consider before diving into the deep end:
- Efficiency and Time Savings:
- How much HR time is currently spent on the manual tasks?
- Can automation significantly reduce the time required to complete it?
- Will automation improve efficiency and productivity in HR operations?
- Accuracy and Error Reduction:
- Are there frequent errors or inaccuracies associated with a process?
- Can automation minimize human errors and improve data accuracy?
- Will automation help ensure compliance with regulations and policies?
- Cost Analysis:
- What are the costs associated with the manual execution of the task or process?
- What are the implementation and maintenance costs of the automation solution?
- Will the long-term cost savings justify the initial investment?
- Scalability and Volume:
- Is the task or process volume expected to increase for HR in the future?
- Can automation handle larger volumes without a significant impact on performance?
- Will automation enable scalability and adaptability to changing business needs?
- Employee Experience and Value-added Activities:
- How will automation impact the employee experience?
- Will the specific automation use case actually free up HR professionals’ time for more strategic or value-added work?
- Will automation improve service delivery and responsiveness to employee needs?
- Risk and Security:
- What potential risks or security concerns are associated with HR automation?
- Can automation ensure data privacy and protect sensitive employee information?
- Are there measures in place to address any risks or security vulnerabilities?
- Stakeholder Alignment:
- Are key stakeholders, including HR team members and leadership, supportive of HR administration automation?
- Does the proposed HR automation align with the organization’s overall goals and objectives?
- Have employees been consulted before automating processes that currently require human interaction?
Automation, if implemented well and in the right places, can be a huge boon to the HR agenda. From rethinking career pathways to upskilling the workforce, from designing better L&D programs to reimagining performance management, automation can help HR. There are multiple HR automation possibilities, but we would like to provide a list of the following 10 to hopefully inspire some interest in this topic.
- Recruitment and Applicant Tracking: Automating job posting, resume screening, and applicant tracking can save significant time and effort. Software solutions can filter resumes based on predefined criteria, schedule interviews, and even send automated responses to applicants.
- Onboarding and Offboarding: Automating the onboarding process can ensure new employees receive necessary paperwork, complete required trainings, and have access to relevant systems and resources. Similarly, automating offboarding can streamline tasks like revoking system access and collecting company property.
- Time and Attendance Tracking: Manual tracking of employee attendance and leave can be prone to errors. Automating time and attendance systems can accurately track working hours, leave requests, and facilitate payroll calculations.
- Performance Management: Automation can assist in streamlining performance evaluation processes. Digital platforms can automate performance review cycles, track employee goals, and facilitate feedback collection.
- Employee Self-Service: Implementing intelligent self-service portals empowers employees to access information and perform certain tasks on their own, such as updating personal information, submitting leave requests, and accessing HR policies and documents. This automation reduces the administrative burden on HR professionals.
- Benefits Administration: Automating benefits enrollment, eligibility verification, and communication processes can streamline the administration of employee benefits such as health insurance, retirement plans, and flexible spending accounts.
- Employee Data Management: Automating the collection, storage, and updating of employee data can eliminate manual data entry errors and ensure accuracy. This includes maintaining employee records, personal information, performance data, and salary details.
- Training and Development: Automation can simplify the management of employee training programs. It can automate the enrollment process, track training completion and certifications, and send reminders for upcoming training sessions.
- HR Analytics and Reporting: Automation can assist in generating HR reports and analytics by automatically aggregating data from various sources, analyzing trends, and producing visual dashboards. This enables HR professionals to gain insights into workforce metrics, such as turnover rates, diversity statistics, and performance analytics.
- Employee Surveys and Feedback: Automating the distribution and analysis of employee surveys and feedback can provide HR departments with valuable insights. Online survey platforms can collect and analyze responses, helping HR teams identify areas for improvement and make data-driven decisions.
Once the HR and business leaders understand the power of automation and benefits of integrating it into their HR processes, there should be minimal resistance. At Lighthouse Consulting, we hope that you found these ideas useful and would be very happy to hear from you about your priorities. We can help you identify ways in which HR automation can make a positive impact for your business. Please reach out to us through our Contact page, and we can get started on gearing your HR function for the age of automation.
