Future-Ready HR: A Comprehensive Overview of HRtech in India

“Technology has become an enabler for everything.”

Today, when working is no longer limited to the four walls of an office, HRtech in India has allowed companies to manage a distributed workforce and provide a memorable employee experience throughout.

As per Vinay Pai, the CEO and MD of Tata Projects, “Implementing technology begins with creating an infrastructure of technology.” He states that the first stage of tech adoption involves eliminating redundant elements, and then comes the simplification of the process. 

This is what several HR companies like Keka, greytHR, Centum Learning, and many others are helping businesses with— setting a base for HR technology in India.

On the cusp of this HRtech transformation, let’s discover what is happening in India’s HRtech landscape.

HRtech in India: Prominent Trends

Technology has undeniably gained traction in HR over the last few years, making hrtech a much-discussed topic among intellects. Being a $940 million market in 2022 in India alone, HRtech is expected to grow at a CAGR of 9.5% in the next five years!

This paradigm shift has amplified with diverse working models, especially after the pandemic. With just a few months remaining in 2023, more and more companies are anticipating newer opportunities and challenges operating in the market. 

Let’s see what’s happening in the HRtech landscape globally and in India.

People Analytics

The last few years have seen a massive increase in the generation and accumulation of data. Now, even human resource management(HRM) can benefit from this phenomenon, thanks to HRtech! Let’s look at a few numbers to see how companies adapt HRtech for systematic people analysis.

• Over 83% of firms indulge in descriptive people analytics— to discover patterns in historical employee data.
• Diagnostic analytics goes beyond descriptive analytics by explaining the insights found in the trends, correlations, and anomalies. 
• Around 20% of organizations use predictive people analytics to estimate what will happen in the future. This is, naturally, a very developing area in the HRtech landscape. 
• Over 42% of companies channel their people analytics efforts to prescriptive people analytics. 

Source: Whatfix

Evidently, it is TIME to embrace newer technologies and ensure that your employees are at the top of their performance to thrive in the evolving HRtech landscape.

Compliance Automation

To lower the risk of legal problems and penalties, compliance automation in hrtech employs technology to guarantee adherence to various regulations, policies, and standards. More than 62% of companies surveyed by CoalFire agreed that automation reduces the overall noncompliance risk and impact of noncompliance.

The most prominent example of automated compliance in the HRtech landscape is Workday’s HCM. Workday, a cloud-based software company, provides a suite of enterprise applications to streamline compliance processes, helping organizations stay up-to-date with changing regulations and mitigate risks associated with noncompliance. 

Talent Acquisition

Modern human resource management requires less human intervention. The HRtech landscape has witnessed a deprecated need for manual labour due to the increasing integration of AI and ML-based chatbots and assistants. Especially when it comes to redundant and repetitive tasks like scheduling interviews, filing paperwork, etc. Further, other tech like blockchains now enhance HR data privacy and security by encryption, making the process more efficient and transparent. 

Ironically, replacing humans with AI for redundant tasks has created more meaningful job opportunities for companies. Take BMW, for example. The automaker has automated some procedures in its South Carolina plant in Spartanburg. Prior to automation, there were about 4,200 workers, and now the number has risen to 10,000!

Another practice, as seen in the HRtech landscape, is the integration of AI and ML to identify, assess, and shortlist the most suitable candidates. These systems are programmed to segregate resumes with required keywords, put them aside, and schedule initial interviews. Unilever, a prominent FMCG giant, relies on AI technology to enhance the efficiency of its recruitment process. 

There isn’t anything that HRtech in India can’t do today, is there?

Wearable Devices for Employees

Wearable technology has recently become popular in HRtech in India. Similar to smartwatches, wearables can be used in various HR contexts. For instance, workers can record their attendance by tapping their watch, and geolocation tracking will confirm its accuracy. This eliminates the need to touch traditional biometric devices prone to contamination.

Other vital health-related data, including blood pressure, average heart rate, SPO2, sleep quality, and physical activity, are also included in the wearable devices. For instance, at Fujitsu factories, smart wristwear often alerts employees of extreme stress, and smart helmets do the same to track driver fatigue. 

Source: Tech in Asia

Source: YouTube 

Such data points can be used to quantify worker well-being when used appropriately.

Global HRtech Overview

Per Verified Market Research’s report, the global HRtech market is poised to be $35.68 billion by 2030! So, there’s a lot to uncover and discover.

According to a recent SkyQuest survey on the market for and use cases of HR technology among large and mid-level businesses, 81% of participants reported using HR software, and 78% said their organization either uses or plans to use HR technology to improve.

As per the same report, AI will become the driving force, adding over $1.9 trillion in value across multiple industries by the end of next year! AI is now used by 53% of companies in the global human resource technology market to find patterns and trends in big data sets. This makes AI helpful in identifying and resolving organizational problems with employee retention, performance reviews, and interviews.

HRtech in India: Key Areas 

This section discusses the critical areas of using HR technology in India’s HRTech landscape. 

Talent Management

Based on Accenture’s research, Fueling India’s Skill Revolution, failing to address skill gaps while acquiring and managing talent could result in a $1.97 trillion loss in GDP. 

More and more companies are now trying to address these challenges by embracing new-age talent management software. These software systems offer career development, succession planning, feedback, and training solutions to upskill and reskill existing talent. 

A prominent example of such a system in HRtech in India is TCS’ CHROMA. It is a cloud-based talent management solution for vibrant and mobile workforces. CHROMA’s cognitive intelligence and ML models allow companies to offer personalized learning and customized recommendations to improve employee experience. 

Source: TCS CHROMA

Payroll Management in HRtech in India

For Indian businesses, payroll is a labour-intensive process. It involves figuring out how much each employee will be paid in gross compensation, net salary, professional tax, provident fund (PF), tax deduction at source (TDS), and other factors. This is where payroll management software comes into play in the HRtech landscape.

Fundamentally, these tools provide better management, simplified HR functions, stub generation, leave management, and other related features that help calculate employee payroll. 

Keka HR, greytHR, and HROne are a few of the companies providing the latest technologies and services in HRtech in India. 

Source: greytHR

Performance Management 

An effective performance management system is an organized process that prioritizes personnel management and helps the organization streamline its employees’ performance. With a robust performance management system, you can

• Determine SMART-er goals – Specific, Measurable, Achievable, Relevant, and Timely.
• Improve the appraisal process. 
• Establish a flow of genuine feedback and iteration. 

You must have heard of Namely, a prominent performance management software widely used in HRtech in India. It has served over 400 businesses globally, managing over 60,000 employees and processing over $2.5 billion in payroll annually!

Source: Software Advice

Recruitment

Automated recruitment in HRtech in India today involves assigning different HR responsibilities to cutting-edge software and technical tools. This lets companies benefit from the increased effectiveness and productivity of recruiters, enhancing the candidate experience. 

Consider Infosys, an eminent IT and consulting firm that utilizes HR tech, especially in their recruitment process. These systems have integrated ATS (applicant tracking system), video interviewing platforms, and other tools to facilitate the recruitment lifecycle.

Suggested Read: EdTech Landscape in India

What’s Ahead for HRtech in India

2023 has been an excellent year for HRtech in the country. Let’s see why.

Source: Blume Ventures

As you can see, until a few years ago, HRtech in India was primarily used in managing talent and improving the employability of the existing workforce. However, in the last few years (specifically, the post-pandemic years), HRtech has become a “high priority” in helping companies transform digitally. It is now an inevitable aspect of managing varied work arrangements, cross-border compliances, employee engagement, and overall wellness of employees and administration. 

This will only amplify in the future. The Indian HRtech landscape is also anticipating the following.

Diversity, Equity, and Inclusion (DEI) as a Prerogative

More and more executives will recognize the vitality of DEI in organizations as both a strategic financial advantage and a unifying factor in workplace culture. Before making decisions, leaders may unthinkingly evaluate resumes and omit any biographical information to guarantee fair hiring for all candidates. Offering unconscious bias training is another way to minimize workplace prejudice and promote a more inclusive environment. 

Source: LinkedIn

Virtual Reality-based Recruiting and Training in HRtech in India

Over the past few years, virtual reality has become increasingly popular in many industries. In fact, per PwC research on VR in HR, employees trained using VR are 4x confident, 3.75x easier to retain, and finish their training 4x quicker. This is particularly advantageous in domains like engineering that call for specialized training or equipment.

Source: Viar360

Virtual job fairs, interviews, employee onboarding, and more can be held in VR in recruitment. For example, the interview could happen in a virtual workplace where the candidate wears virtual reality goggles. 

Future Prospects of HRtech in India and the World

Human resources has transformed dramatically. Earlier tied to paperwork, it has now metamorphosed into a hybrid of physical and digital administrative areas. As we look ahead to the future, it’s important to remember that it is always in flux, and predicting how it evolves is a shot in the dark. Nevertheless, the key to success in such an unpredictable yet opportunistic scenario is to ensure you’re keeping up with the latest advancements and keeping abreast of the trends in HRtech in India.