How to Build a Better HR Tech Stack

With the HR tech marketplace expanding at record pace and offering innovative solutions for every part of the talent life cycle, it’s easier than ever for organizations to implement meaningful HR transformations.

“With the availability of so many cutting-edge tools and apps, HR teams can easily build an impressive tech stack to meet the 360-degree needs of employees,” says Mike Hicks of Igloo Software, a Canadian-based company that develops online communities and social software for businesses. “Identifying the leading applications used to collaborate, engage and inform employees will lead to greater innovation down the line.”

But with so many new offerings, it’s common for HR leaders to become overwhelmed when choosing what’s right for their organization now and in the future. Here are a few key questions to ask when building a better HR tech stack.

What Does ‘Better’ Mean?

Ben Pitts, vice president of corporate development at Picwell, which leverages big data and AI to personalize employee benefits recommendations, says that before making any technology decisions, HR leaders should start with their own strategic goals.

For example, he says, if one of your team’s strategic objectives is to reduce health care costs, the first step would be to ask “What types of technologies can help us accomplish this goal?”

“Benefits enrollment, benefits education, decision support, plan design analytics and health care cost transparency tools could all play a role,” Pitts says. “You can then assess if your existing technology stack provides functionality to take advantage of these approaches and consider an upgrade in the area where you think your organization sees the lowest-hanging fruit.”

Lee-Martin Seymour, CEO of Xref, a reference-checking platform, says new technologies should be able to clearly show their value to the organization. “HR and recruitment teams are under increasing pressure to demonstrate the value of the work they’re doing,” he says. “HR leaders have found their spot at the boardroom table by utilizing the swaths of data available to them to evaluate and accurately report the efforts of their teams. Technology is key to doing this well and quickly, and any new software investment should be able to clearly demonstrate its value.”

Does Everything Work Together?

Hicks says that while each individual HR system offers some value on its own, what’s more important is unifying all those apps and creating a single digital destination where employees go to start their day. “Implementing a stack of the best-of-breed tools that can’t speak to each other is counterproductive and creates data silos,” he says. “While integrating a variety of solutions might appear to make a lot of people happy in the short term, it will most definitely lead to siloed communication, increased costs and make collaboration challenging.”

He says next-generation digital workplace platforms can help employees avoid inefficient processes, such as separate destinations for vacation requests, onboarding, benefits information, new-hire requests, performance management and employee policies. Having multiple stops for these functions wastes time and can risk the loss of valuable information, he says.

“The right digital workplace will already come with a robust set of communications, collaboration, knowledge-sharing and workflow features, but will also integrate with the third-party apps your HR teams rely on, and enable employees to easily navigate between them — building a complete system that supports, rather than obstructs, HR and employee needs,” he says.

Seymour says the HR industry globally is moving away from traditional technology adoption and moving toward integrated solutions. “Rather than investing in one major software provider to support a variety of HR tasks and processes, savvy HR leaders are looking to build the tech stack that works for them, using the individual platforms that meet their needs,” he says. “The challenge is that not all solutions offer seamless and secure integrations with other tech providers. Finding those that do will offer ease of implementation, time and cost savings, and more effective business alignment.”

Is It Business Critical?

With all the impressive software tools available in the market, Seymour says it can be easy to get caught up in the marketing hype and the fear of being the last adopter in your space. To avoid this scenario, he suggests first asking what impact any technology investment will have on your business. “Is it a business critical ‘need to have’ or simply a ‘nice to have?’ ” Seymour says.

Pitt says companies should consider incremental improvements before risking a complete overhaul of their HR systems. He says many HR and benefits technology changes become overwhelming, requiring long implementation timelines, deep integrations and significant costs.

“Oftentimes we can accomplish our goals with incremental change,” he says. “We should think about improving HR technology the same way. Instead of replacing the benefits administration and enrollment platform, consider adding a standalone decision-support capability that can improve employee decision making.”

Is It Enterprise-Ready and Scalable?

Before implementation, Seymour says companies should ask whether each new piece of HR technology would pass the stringent legal, technical and commercial demands of a large enterprise.

“If not, regardless of the size of your own company, you should be careful about investing,” he says. “In today’s data-driven world, privacy and security are top of the priority list for every organization globally, but some of the most innovative solutions lack the levels of assurance you need when trusting an external provider with your data.”

He also suggests paying close attention to the scalability of new tech solutions. Although a technology platform might seem right for your needs now, that doesn’t guarantee that it will be able to scale with you as your business grows.

“The HR technology solutions you deploy should have the capability and capacity to perform efficiently under widely varying workloads and quickly adapt to scale and meet rapidly changing environments,” he says.