Technology in Total Rewards

Adopting New Technology

Although the cost of technology can vary widely, limited financial resources can inhibit an organization’s adoption rate which is the case for many small firms. They have difficulty affording IT sector services, which thwarts their ability to adopt new technologies quickly. In addition to limited access to financial resources, other challenges organizations face include garnering top management commitment and their level of technological readiness. Readiness in this context refers to internal IT investment, infrastructure, human capital, or access to external IT support such as consultants. Organizations realize sustainable benefits by moving up the technology learning adoption curve in three key areas:

• Innovation is gained where operational efficiency of business processes can be realized. This requires alignment with the existing values, past experiences, and needs of the organization.
• Organization effectiveness occurs when innovative capabilities are developed to introduce and assimilate new technologies. Companies with the requisite financial resources adopt technologies at higher levels, like workflow automation. In comparison, smaller companies may adopt technology at lower levels such as e-mail, websites, and attendance applications. They may also leverage technology by outsourcing such functions as payroll and retirement plan administration.
• Better performance is achieved when higher levels of technology give an organization an advantage such that it is better able to meet external pressures from competitors and more effectively serve clients and trading partners while meeting regulatory requirements.

Technology adoption starts with knowledge and awareness of the innovation. The execution stage follows, which focuses on the implementation of the technology.

Initial Stages

At the initial stage of technology adoption, an organization focuses on solutions to provide and efficiently distribute information to employees related to total rewards such as benefits or legal documents that include Summary Plan Descriptions (SPDs) and personnel policies. First stage initial technology adoption is characterized by users simply retrieving information without any interaction. The solutions are static websites utilized to educate employees as well as distribute information such as SPDs. Then front-end applications are added such as job applications, benefit enrollments, surveys, and interactive onboarding and training modules. These applications capture information entered online. The information is then processed, forwarded, and distributed. Although still fragmented and time consuming, savings realized at this juncture are:

• more efficient gathering of information
• eliminating data entry on the part of Human Resources
• a greater degree of accuracy as errors in data entry are avoided
• transactions performed online
• changes made online to personal information
• plan details reviewed online
• employees attending virtual training without leaving their desks

Advanced Stages

As technology adoption increases, more advanced solutions with integrated transactions and a linked database can be introduced. Examples include performance evaluation and management, retirement plan management, employee compensation planning, and updating personal information such as family status and address changes. Employees may receive real time notification of status changes in their jobs. Workflow automation streamlines transactions by gaining instant approvals using paperless forms.

At more advanced stages, the solutions are more expensive to develop, host, and maintain. Data is entered by employees and disseminated immediately to the appropriate parties in the correct format. Human Resources can easily distribute information to third party administrators including complete employee records, reports and census data. The result is lower administrative costs, more consistent and accurate processes, as well as increased trust in stewardship and use of employee data.

Dashboards provide opportunities for organizations to communicate key information to management, influencing items such as staffing, turnover, cost of labor, and budgets.

Enterprise systems provide the capability for cross-functional information to be managed company-wide. Systems that access a single database, instead of separate systems each having an isolated, dedicated database, allow for powerful queries across functional areas. Reports that are generated using AI natural language search capabilities and analytics add additional insights that enhance HR’s effectiveness and an organization’s bottom line.

AI can provide human resources with the capability to enhance its performance by automating repetitive work and performing valuable analytics. AI can be found in platforms used for compensation planning, recruiting, onboarding, performance review, and employee retention and development.