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The Algorithms Transforming HR Software

Posted by Mathew French

8 October 2015

Gone are the days when e-Recruitment and Core-HR Software systems were just clumps of code that only store static data. Over the past 8 years, Human Resources systems have undergone a significant evolution - with the architecture of many of today's solutions virtually unrecognisable in comparison to their early noughties counterparts. Even the Payroll space has been radically transformed, despite the fact that many people thought it would take a lot longer for Payroll and Finance to go on-line and be cloud based in a mainstream manner. At the foundation of all these changes is the purpose of connecting both people and different systems together to create increased efficiencies and greater degrees of freedom. This level of innovation and automation has created inspiring levels of progress and change for many businesses, but what is in store during the next 5 to 10 years?

Enabling Connectivity

HR Software is artful in connecting people together via HR software algorithms. This applies not just to employees that work in one location, but can be applied globally across multiple locations. The tech revolution also extends connectivity between your employees, your organisation and other people that are not currently working in your business.

If current trends continue, the next 5 to 10 years will see the domination of a much more itinerant workforce. Enabling business to leverage these more itinerant employees is going to be key to the success of software providers, and this factor will become crucial to maintaining competitive advantage.

Leveraging Connectivity

Linking applicants (the public), to loyalty programs which are embedded into the HR arena, is where the next generation of software sits. The following functionality will gain traction in the near future:

  • Leveraging e-Recruitment software to allow people to perform tasks through crowd sourcing will gain traction.
  • Linking local businesses to offices and providing rewards to employees through rules specific to the business will also show an increase in popularity. These rules will be set up so that the rules are not known by the employees so that their resultant behaviour is intrinsic.
  • Performance Management will become a daily, weekly and monthly process which is tracked through algorithms.
  • Linking the applicants applying for Jobs at your organisation, who are already associated with your business through their behaviours, through referrals and applications via next generation e-Recruitment and HR Software, will also be a future trend set to take off based on the increased subtlety and sophistication of algorithms.

Subscribe-HR HR The Algorithms Transforming HR Software

Data Science Vs Intuition

Rather than looking for a crystal ball, the intent in these algorithms is to use mathematics (referred to as 'science' by the vendors) to provide HR with the relevant data points for better decision making. Let’s look at one popular example today: predicting voluntary employee attrition. This feature is increasingly prevalent now for two reasons: one, attrition is important to organisations worldwide in a tight market for skills, and two, it is generally easier to 'predict' based on the kind of data that HR generally has available, including:

  • Time in one job.
  • Duration without promotion.
  • Reputation of the manager with his or her subordinates historically.
  • Length and time of the commute to work, and the like.

In Hiring, Algorithms Beat Instinct

Interestingly, the results of multiple studies indicate that you should step back from the hiring process and reconsider the benefit of an algorithmically selected short list. If you simply crunch the applicants’ data and apply the resulting analysis to the job criteria, you’ll probably end up with a better hire.

Research indicates that humans are very good at specifying what’s needed for a position and eliciting information from candidates, however, they’re very bad at weighing the results. A Harvard Business Review analysis of 17 studies of applicant evaluations, shows that a simple equation outperforms human decisions by at least 25%. According to their research, the effect holds true in any situation with a large number of candidates, regardless of whether the job is on the front line, in middle management, or in the C-suite.

The problem is that people are easily distracted by things that might be only marginally relevant, and they use information inconsistently. They can be thrown off course by such inconsequential bits of data, such as applicants’ compliments or remarks on arbitrary topics. This tendency inadvertently undoes a lot of the work that goes into establishing parameters for the job and collecting applicants’ data.

With all this talk about the accuracy of algorithms, there is some concern that machines will one day replace HR Professionals altogether. It would be foolish to say that this will never happen, however, there will always be things that machines can't replace, and human to human connection is one of them. After all, it's not called Human Resources for nothing.

Topics: HR, performance management, e-Recruitment Software, HRIS Software, E-Recruitment, eRecruitment Software, hr software, Performance Management Software, HR Software Algorithms, Algorithms, Performance Feedback Software

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