HR Automation Explained: Advantages, Challenges & Examples

Just when you cross one job off your list, there are two or twelve more waiting.

Managing payroll and benefits, recruitment, onboarding and offboarding, training and development, vacations and sick leave. . . It’s no surprise HR teams can get overwhelmed by the continuous cycle of administrative tasks it takes to keep a business running. Especially if you’re using manual processes.

That’s where HR automation comes in. It enables HR departments to streamline these core responsibilities and focus on employee wellbeing. But how easy is it to implement an automated system — and is it worthwhile?

Let’s look at the benefits and challenges of HR automation to help you decide.

What Is Human Resources Automation?

Human resources automation is the use of an electronic system to carry out HR processes. It involves using software tools to streamline repetitive or time-consuming tasks and generally helps an HR department operate more efficiently.

There are several opportunities to automate HR processes, including payroll, benefits enrollment, recruitment, training, and performance management. HR software also helps you take care of essential administrative tasks like organizing employee records, handling tax forms and contracts, and maintaining compliance with government regulations.

You can also set up automated workflows that are triggered when a specific event happens. For example, when a new recruit is hired, the system automatically sends them an onboarding packet and registers them with a company device and login details.

Automation in HR is typically facilitated through an integrated technology platform on the cloud, sometimes referred to as software-as-a-service (SaaS). Companies license the functions they want to manage and automate and can customize workflows to meet their specific needs.

Why Is HR Automation Important?

HR automation can make a significant difference to your business — not just for the HR team but to every employee.

Boosts Efficiency

HR process automation increases efficiency and makes everyone more productive. An automated system can handle basic tasks far more quickly than a human can — for example, retrieving employee records or checking leave requests — and also reduces the risk of human error.

Automation can shorten your time to hire by posting multiple job ads, screening resumes, and tracking the interview process. Onboarding can begin as soon as the offer letter is signed.

With more time, HR teams can focus on the tasks that only a human can handle, such as conflict management or building a positive workplace culture.

Keeping HR data online also minimizes the need for storage space (and it’s better for the environment if you go paperless, too!).

All this efficiency can have a real impact on your business’ bottom line. HMC Hospitality, for example, saved 1,120 hours per year after implementing Paylocity’s automated HR platform — which added up to $100K in cost savings.

Enhances Employee Experience

Automation means less stress all around, not just for HR teams, but for your employees as well. Again, it’s about saving time on tedious processes.

For example, instead of filling out expense forms, workers can simply photograph their receipts in an app. The system does the rest (which means they don’t have to wait weeks for reimbursement).

An employee self-service portal enables employees to view their salary information, keep track of benefits, and request time off — often from any of their devices — without needing to involve HR. This empowerment is great for employee satisfaction and engagement.

Prospective talent is more engaged as well when HR automation is integrated into the recruiting process via scheduled check-ins and application updates. In a competitive job market, it’s important to keep candidates’ interest and let them know their time is valued.

Enables Data-Driven Decisions

An automated HR system can quickly collect and analyze a vast amount of data, which you can use to make smarter business decisions. Most platforms include robust reporting so you can easily track expense claims, see which employee benefits are most used, and identify issues with punctuality and attendance.

Analytics tools further evaluate the success of your hiring process, the staff turnover rate, and feedback on the employee experience. You can use these insights to see what’s working so you can adjust your talent strategy as needed.

Improves Transparency

An increased level of transparency not only keeps employees informed, it keeps them engaged — another key reason to automate HR processes.

Automation makes it easier to create and communicate consistent HR practices throughout the business, which helps employees better understand your company’s policies and culture. When you give employees more visibility and autonomy, you build trust.

Ensures Security and Compliance

One of the most critical ways HR automation benefits organizations is by preventing security and compliance issues. From employment eligibility verification to tax withholdings to document collection and storage, automation helps protect employee privacy and keep regulatory details from slipping through the cracks.

Maintaining compliance is a company-wide responsibility. With an integrated HR software system, you can also automatically assign employee training to keep everyone up to date on policies and safety guidelines.

Challenges in Automating Human Resources Processes

While automation streamlines an array of HR processes saving both time and costs, it may take some additional convincing to get buy-in across the organization. Change is often a challenge, and you can expect a few bumps along the automation journey.

Computers Aren’t Personal

That’s true. Human resource management will always need human input. No matter how proactive and predictive technology can be, it does not have empathy or interpersonal communication skills.

Nevertheless, your staff might still fear for their jobs when “the robots” take over, while others may resist switching to automation because they’re familiar with manual processes.

“How Do We Use It?”

Automation is only effective if everyone knows how to use the tools — so you’ll need to factor in time for staff training.

Good HR automation software is intuitive and usually includes a variety of customizable features which take some specific setup for your business.

Your IT team should be part of the early planning stages to make sure the system works with your existing infrastructure and meets all technical requirements.

ROI Is Hard to Calculate

HR teams who want to introduce automated tools might also face resistance from the C-suite, especially if the budget is tight. You’ll have to demonstrate the business need for automation, but it can be difficult to quantify things like employee experience.

Looking at case studies from similar companies can give you an idea about how much time automation has saved other HR teams. Similarly, you can quantify anticipated cost-savings from reduced turnover rates, an indication of improved employee engagement.

Is It Safe?

Automated HR systems collect a lot of data, and documentation has to be retained for compliance auditing and reporting. Since much of this data is confidential, your employees might have concerns about how it’s stored and used. You’ll need to show that your data governance policy (and the technology supporting it) is ethical, secure, and compliant.

What HR Processes Can Be Automated?

Automated HR software comes with plenty of features for streamlining your essential processes. Although the functionality will differ depending on the solution you choose, here are some of the ways you can use HR automation tools to your advantage.

Payroll

With automated payroll software and benefits administration, you can improve paycheck accuracy by eliminating manual entry. The software will pull in relevant employee information and calculate everything automatically, including taxes. Solutions like Paylocity even add reimbursements directly to paychecks.

Employee Self-Service

As we mentioned, an employee self-service portal allows workers to clock in and out, submit time-off requests, view upcoming pay schedules, and access their own records. Everyone can use pay and benefits calculators to understand what they’re entitled to, keep track of pending requests, and update personal data.

Workforce Management

For the HR team, time and labor software is incredibly useful. Instead of handling manual timesheets, you can instantly see who’s working and when, calculate and approve vacation days, and respond to requests. Shift scheduling and overtime management become simpler.

Talent Management

HR automation solutions may also include a talent management system to track, measure, and analyze employee performance. You can automatically schedule annual reviews, set goals, and track progress toward them. And you’ll have the necessary data to determine raises, bonuses, or disciplinary action.

Performance tools help you track skills, see who needs extra training, and monitor learning. Plus, you can easily monitor workforce satisfaction and identify problems like lack of engagement—giving you chance to address the issue before an employee quits.

Recruiting, Onboarding, and Offboarding

Your HR automation system should also include recruitment tools, which can streamline repetitive tasks from posting job ads to running background checks.

An applicant tracking system collects data and automates communication during the hiring process to help keep promising candidates warm.

Onboarding tools can deliver training and make sure new hires have the logins and equipment they need to get started. Automating the offboarding process will schedule exit interviews, collect feedback, and remove system access.

Data Insights

Automated HR systems usually incorporate analytics and reporting software for easy data collection and visualization. The software can automatically capture pertinent information related to your workforce, including demographic data, headcount, labor costs and more.

You can then use these HR metrics to build data-driven strategies and track the impact of your initiatives.

4 HR Automation Best Practices

Ready to take the leap and swap manual processes for human resource automation? Before you get started, here are a few tips on how to get it right.

1. Figure Out What Needs Fixing

It might be tempting to dive right in and implement new software, but you need a plan first. What do you want to achieve with automation? Which processes would benefit most? Make a list of the HR workflows that are particularly tedious or error-prone and prioritize them based on their impact on business outcomes.

As we mentioned earlier, adopting automation tools is a big change for your organization, and it makes sense to roll it out in bite-sized stages (Which you can do easily with a modular solution like Paylocity.)

2. Choose the Best Tools

There are plenty of HR automation tools on the market, so do some research and find a solution that suits your business. Check that it has all the features you need right now and that it’s scalable enough to meet future demands. Flexibility is also important, such as the ability to create custom HRIS integrations with existing tools.

Look for software that makes it super-easy to access data from anywhere for employees as well as HR teams. Pay attention to security and customer support offerings.

Of course, your budget is a big consideration. An all-in-one platform like Paylocity gives you custom pricing plans and the option to add as many features as you need.

3. Provide Full Training

Once you’ve decided to go for HR automation, make sure everyone is aware of the upcoming changes and when they’ll happen. Assess the abilities of your workforce — some may already be comfortable with digital tools and automation, while others will need more intensive training.

It’s important that everyone is confident in using the new tools. Otherwise, you won’t see the improved time efficiency you were expecting. Keep the lines of communication open to explain and assist employees at all comfort and experience levels during the transition, so they can leverage the tools to their advantage.

4. Get Feedback on How It’s Going

Choosing a client-first solution like Paylocity makes the transition easier, but you’ll still need to check that newly automated processes are running smoothly. Monitor how your employees are responding to the tech—are they using the automated expense claim tool, for instance, or still submitting paper receipts?

Measure key HR metrics like time to hire or 401(k) enrollment to see if automation is having the desired effect. Make sure you collect plenty of feedback and tweak the workflows if necessary.

Reinforce HR Automation with Paylocity

With more and more companies recognizing the benefits of automation, the global HR technology market is expected to hit $76.5 billion by 2031. Don’t get left behind—make the transition now to ensure your HR team keeps up to date (and doesn’t get buried in a ton of paperwork).

Paylocity’s HR & Payroll solution can help you streamline and automate at every stage of the employee lifecycle. This means customizable workflows, user-friendly employee-self-service, robust AI-powered reporting, and more–– all packaged in an easy-to-use platform that’s designed with the employer and employee in mind.

To learn more about how Paylocity can help you automate your admin, request a software demo today!