Technology in HR: Advances That Will Shape HR in 2030

In brief

• Technology in HR is changing the landscape and becoming a vital part of the workforce. HR needs to be at the forefront of the digital revolution to play the role of a strategic partner to the business in the future. We reflect on how technological advances have shaped HR to date.
• AIHR proposes four technological advances that HR needs to capitalize on leading up to 2030 to create impact.

Technology in HR has played an instrumental role in changing the field and will continue to do so. As we enter Industry 4.0 and 5.0, we’ll see more significant advances that allow us to reshape the future of HR and the value it adds to organizations. These advances will not be without disruption and will call on HR teams to rethink and reframe their engagement and delivery models.

In this article, we will explore three key topics on the relationship between HR and Technology:

• Topic 1: A brief look at how technology has influenced HR over the past century
• Topic 2: The technological advances that will play a significant role in shaping the future of HR by the year 2030
• Topic 3: How HR professionals can prepare for these changes and capitalize on the opportunities that the future will hold.

How has technology previously changed HR?

Technological advances such as steam engines changed the face of manufacturing and how products and goods were transported. The creation of the world wide web in the early 1990s and recent advances in mobile accessibility have also led to new innovative work models. Today, technology has not only become a vital part of the workplace, but smart technologies have become a crucial part of the workforce. Technology is augmenting jobs, becoming more intelligent, and playing a critical role in designing and executing work. 

Technology has significantly changed HR. From our roots in the early 20th-century driving manual and paper-based record keeping and labor relations practices to the connected, integrated, and digital employee experience that HR professionals drive today. 

The advances in HR technologies are often only seen in transactional automation and databases, yet the real impact of HR technology goes much further. To fully understand this landscape, let’s look at the technological advances in HR based on five key movements. 

• Movement 1: Tracking of time, attendance, and manual record-keeping (Before the 1950s): The earliest forms of HR technology can be described as manual filing systems related to keeping employee records and capturing time and attendance through punch card systems. IBM was a crucial player in this era with their “IBM Punch Card.” The automated clock provided more accuracy in tracking employee time and subsequent wages, with the 1940s seeing advances in computerized systems used for basic transactional processing. Predominantly, these systems were used for payroll payments; they were large and expensive and predominantly used by larger organizations.

• Movement 2: Paper-based systems to transactional databases (the 1950s to 1980s): The development of mainframe systems allowed for more advanced processes to be automated, such as the collecting, storing, and retrieving of employee records. During this period, HR Information Systems (HRIS) were developed, which still form the basis of several modern HR technologies. As organizations became more complex and sophisticated, the need for client-server technology resulted in the growth of Enterprise Resource Planning in the 1980s. This era saw organizations, such as IBM and SAP, dominating the market and introducing major advances which still form the basis for many technologies used today.

• Movement 3: Personal computers (PCs) (1980s to 1990s): The personal computer and connected networks led to a significant shift in how HR data was used. Personal computing created the opportunity for greater workflow-related processing, improving HR services’ speed and efficiency. HR systems became more affordable for small and medium-sized organizations, but physical on-site network constraints resulted in limited use by employees and managers based outside of headquarters or regional offices. The first version of PeopleSoft was released in 1989 as the first fully integrated client-server HCM solution.

• Movement 4: Web-based systems and remote access (the late 1990s): Web-based systems ushered in a new phase of HR technologies. The ability to access HR systems remotely and increases in data storage and computing capacity led to the rise of employee self-service technologies and more advanced reporting and analytical capabilities. Self-service portals were integrated into company intranet solutions and used extensively to reduce the cost of HR administration. Many HR practices were becoming more technology-enabled, and the development of the first job board by Monster in 1994 and Applicant Tracking Systems in 1998 was a key milestone that would forever change recruitment practices. 
• Movement 5: Social Media, Cloud, and Software as a Service (the 2000s to today): Social media in the early 2000s changed HR, particularly in recruitment and employer branding practices. Public ranking platforms emerged and provided a place for employees to review their companies.

Today, HR has moved into the Cloud and numerous new Software as a Service (SaaS) platforms have rapidly emerged. The HR Technology market is anticipated to grow to US $63 billion by 2032. These modern systems are built from an employee perspective as employee experience and data intelligence is prioritized, resulting in a move away from traditional functional and process-heavy IT architecture.

Major advances in people analytics have also seen a significant increase in analytics tools and platforms utilized in conjunction with traditional core HR systems. These advances have called for more sophisticated approaches toward data governance and IT architecture, a domain that has historically been a significant pain point. Chatbots have also become commonplace as a method to drive HR services. With technologies such as ChatGPT opening up new possibilities related to language processing models, we can expect a sharp increase in the uptake of these technologies over the coming months. 

Significant digital challenges still face HR

 Our four-year research study on the “State of Digital HR” showed that, despite the acceleration effect of the pandemic in adopting digital HR solutions, there are still some significant challenges if we are to sustain this progress.

Participants in our study still report a hesitancy to experiment with digital solutions, a lack of an innovative culture in HR, resistance to new technologies, and a lack of digital skills. The extent to which people strategies are supported by digital and aligned to business priorities also differ depending on organizational size, with enterprises (10 000+) pulling further away from both medium and large organizations in adopting digital HR solutions.

With the rise of the experience economy and changing employee expectations regarding HR services, we are seeing the next movement in digital HR technologies emerge. Given the strategic importance of digital for HR to have a meaningful impact, if we cannot close the divide and leapfrog into the future, HR risks lagging and becoming irrelevant to the organization’s needs.

4 Technology advances that will influence HR by 2030

Our recent report highlighted the importance of Digital HR for the success of the human resource function. In the past, HR has been accused of being slow to adopt new solutions, being reactive in our approach, and lagging in terms of the potential value that the business is looking for.

As new technologies emerge, we will again be challenged by the business to adapt, adopt and evolve if we are to remain a relevant and value-adding strategic partner. If not, we risk being relegated back to the “support” function of old, and the advances made in the strategic HR positioning since the early 2000s, and the ground gained during the pandemic, become irrelevant.

However, there is an opportunity for HR to grasp the window of opportunity, and there are four technological advances that HR can utilize to its benefit over the coming years leading up to 2030.

We used the following criteria to identify the technologies: 

1. The technologies already have to exist today, yet limited application to the HR environment has taken place.
2. There are identified opportunities in how these technologies could be used in HR services and models aligned to new thinking in HR operating models, and
3. We balance futuristic perspectives with practical and tangible actions that make our recommendations serve as a plan of action rather than only a list of possibilities.

We acknowledge that, given the speed of technological advances, by 2030, we will see even more possibilities than those discussed in this article. Yet, this is a good starting point for HR to remain relevant in the ever-changing workplace.

Advance 1: Applied AI and Machine Learning

Artificial intelligence will become more human-like and integrated into our daily lives, both in our personal lives and at work. We already see the first indications of this in voice technologies, facial recognition, and voice assistants. Applied AI will become mainstream, and engaging with AI will become a natural phenomenon. We can expect more and more AI-enabled activities to become part of our work in HR. For example:

• The learning domain: AI will be the primary driver of learning recommendations based on collected personal data and underlying competency models that draw on real-time assessment data. 
• Compensation and rewards: AI will allow for personalized reward recommendations leading toward a new approach to designing incentives, pay structures, and bonuses. 
• Talent acquisition: HR will use AI to suggest candidates in existing employee networks for current and future opportunities while optimizing and personalizing our approach based on individual talent preferences to improve the experience and create a higher likelihood of talent joining the organization.
• Turnover and retention: HR will use AI to predict turnover and retention risk based on data-driven indicators that provide real-time insight. These insights will be used to proactively mitigate the turnover intention of top talent and improve the availability of current skills.
• DEIB: AI will contribute to DEIB initiatives, where in the past it has been largely cited to be detracting from DEIB efforts. AI can help HR to write more inclusively, highlight potential bias and translate key messages into numerous languages while also identifying opportunities to communicate in ways aligned with organizational values and culture. 

How should HR prepare?

1. HR teams must start integrating AI solutions into current HR processes. Start using trusted and reputable AI solutions within high-volume processes, such as graduate recruitment or CV screening. 
2. You can also use pre-designed chatbots to remove repetitive HR work. Start incorporating these technologies into your HR delivery model. 
3. Introducing AI tools and solutions in delivering HR services requires collaboration with an IT team to ensure that programs are appropriately trained based on company policies and procedures. 
4. While major advances have already been made in terms of the quality and accuracy of content produced utilizing ChatGTP and other generative AI tools, they are still subject to inaccuracies and biases. This has become especially evident in cases where companies have used AI in their hiring processes. Therefore it is essential that the right governance and review systems are put in place to ensure that these tools are used ethically and in line with the ever-developing regulatory landscape. 

Advance 2: Alternate virtual realities and immersive experiences

The past few years have brought considerable progress in incorporating the Metaverse and virtual reality into workplaces. The barriers to its application have primarily been based on connectivity, cost, and infrastructure, which will be resolved in the next few years. 

Technologies like the Metaverse are already used to improve customer experience in retail and other sectors. For HR, we expect it to become more integrated into how we work. Specifically, the Metaverse will be used to engage and create spaces for teams to collaborate and get together. It will bring people working remotely into one virtual space and redefine activities such as career fairs, recruitment, and learning. 

This is already beginning to happen, with companies like Walmart, Boeing, and UPS using VR and adopting virtual reality for training and education. Maryland’s Vehicles for Change Program has also adopted virtual reality to train new mechanics. At the same time, we see companies such as Shell increasing safety awareness to 9000 frontline workers via virtual reality.

Tech firm Capgemini hosted its first career fair in the Metaverse in April 2022. Students designed their avatars and used VR goggles (or laptops) to virtual tour the offices and meet recruiters face to face. The company used user-generated content on open forums to build a virtual college fair that was familiar to students and promoted their employer brand.  

How should you prepare?

As HR, we can already start experimenting with virtual and augmented reality. 

1. Start shifting some of your large-scale events to the Metaverse, use available options for career fairs, or host an internal Town Hall to bring people together. There are already virtual event and office platforms, such as Decentraland  or Kumospace, that can be used for this purpose. 
2. To prepare for this trend, explore the possibilities of the Metaverse more and apply some of these learnings to your areas of expertise. How about hosting your next HR Conference in the Metaverse?
3. Update workplace policies and create a clear metaverse code of conduct that aligns with your values and provides a behavioral framework for how employees engage and interact. 

The Metaverse and its impact on the world of work can be intimidating, and HR professionals will not only need to manage their own hesitancy but also that of employees. Therefore, practitioners must explore metaverse communities, stores, and games to better understand how users behave in virtual worlds and identify potential opportunities for using the technology within the organization. 

Advance 3: Distributed infrastructure and Web 3.0

The next technology trend is Web 3.0. Web 3.0 will change how people interact and engage with web technologies and significantly change how the world wide web is governed. Web 3.0 is the decentralization of the internet into an online eco-system and database that runs on blockchain technology. Unlike in the current version of the internet, ownership of content will be shared. The web will be a self-governing community where everyone contributes with absolute transparency and trust. 

In practical terms, content will be stored in multiple locations. We will move away from storing information at a fixed location and on one server. Users will have more control as we shift away from a few large corporations holding all the power concerning what is published online, where it is stored, and how it is distributed. 

Blockchain and Crypto projects

Blockchain technologies will play a key role in Web 3.0. Blockchain technology allows digital information to be recorded and distributed but not edited. This will be the foundation for records and transactions that cannot be altered, deleted, or destroyed. It creates transparency, trust, and enhanced security, allowing people to transact and work together safely and changing our thoughts about HR data and privacy.

Organizations like Persol Career Co and IBM are already adopting Blockchain for HR and numerous investments made by platforms such as Workday. Web 3.0 and the expansion of blockchain-based digital economies have also started to alter the way of work, with the “passion economy” becoming more mainstream. 

While controversial, Crypto games like Axie Infinity have enabled many players to earn a meaningful income while doing something they love. This concept has also spread to other areas, including rewarding users with digital tokens for exercising, browsing, and learning. 

Crypto projects have used the “learn to earn” model, which rewards users for learning about crypto with tokens, to drive people to their platform.

Some companies have started to explore using the model by partnering with career experimentation and advancement platforms like Network Capital. The platform enables learners to acquire new skills across diverse topics at no cost. At the same time, companies can tap into a pool of trained professionals who specialize in areas facing skill shortages.

How should you prepare?

1. For HR, Web 3.0, and specifically Blockchain, introduces opportunities around the verification of transactional services. For example, payroll and cross-border and 3rd party payments could be conducted through Blockchain. 
2. There is an opportunity to reduce payroll waste and improve transparency concerning payments, governance, and audit requirements. 
3. Blockchain will also provide us with opportunities in the talent environment; for example, it can be used to verify education and experiences on CVs, drive transactions, and protect data in a secure and trustworthy fashion when we gather information of a personal nature, such as contracts, benefits, and medical insurance details. 
4. Web 3.0 will create new ways to interact with employees and deliver HR services. Start preparing by investing in technology and tools that support Web 3.0 capabilities, such as natural language processing and machine learning. 
5. Remain current on the latest developments in Web 3.0 technologies and consider how you can collaborate with data science and IT experts to help develop and implement new strategies in the organization. 

Advance 4: IoT and 5G

The Internet of Things, or IoT, refers to the interconnected nature of smart devices, wearables, and other technologies. The IoT is often cited as one of the technological developments that hold the most potential for the future, yet this has received very little attention in HR.

Even though there are valid concerns regarding the ethical use of data, privacy, and employee consent, organizations can adopt responsible approaches to incorporate IoT into their work practices. For example, providing transparency to employees about what data is being captured and how it is used and allowing them to opt-in or out of specific interventions.

IoT and new service channels

IoT will impact HR data, software, and hardware. IoT will result in a more integrated employee experience of HR, and you will also be able to provide HR services anytime, anywhere, and on any device. The explosion in mobile HR over the past few years has started to set the scene for this shift, yet the possibilities IoT will provide are yet to be explored.

HR will adopt new service channels, for example, by using smartwatches and devices to access HR services, sharing HR information and processes across various devices, and gathering more employee data to provide integrated recommendations. This could lead to advances in employee safety, with sensors providing proactive warnings to employees when engaging with the work environment.

Imagine your learning chatbot starts to notice that you have been scrolling through specific articles on your social media on your mobile device, so it curates learning programs based on your changing interests. You’ll see the world’s interconnectedness driving the ultimate form of personalization of HR services. 

You’ll also have the opportunity to shift towards content that was traditionally more bandwidth-heavy, being made accessible by 5G. For example, video and voice technologies will change the learning landscape completely, and immersive experiences will become more commonplace. With advances in 5G, this will now be available to all regardless of location and change the quality of the learning experience for the better.

At a practical level, IoT will unlock the potential of truly flexible and remote work. Only through IoT can employees have an immersive and inclusive experience of the organization regardless of where they are based.

IoT will also open new possibilities for HR analytics as new data sources become available and integrated into evidence-based HR decision-making practices. You’ll also see the benefits of IoT within the domain of employee well-being and health; you’ll be able to incorporate broader sensors of employee well-being and health to manage employee health risks within the organization. 

For example, a financial services provider we spoke to is experimenting with a wearable device to monitor key medical indicators for employees to help with physical and mental well-being. This data is monitored with the employee’s consent and used to provide personalized recommendations to improve their well-being. 

How should you prepare?

As HR, we must explore immersive experiences and incorporate different content mediums into our solutions. Recruitment, onboarding, learning, and performance are examples of practices that will benefit from these immersive technologies and will create cohesive and seamless experiences. 

1. As a first step, start designing HR technologies and practices with a multi-channel perspective. Mobile will become the main avenue for future HR practices and service delivery. Video and collaboration platforms can already be integrated into HR experiences, especially saving time in recruitment and sourcing while still providing an engaging employee experience.
2. Partner with experts in the business, like CIOs, to better understand what opportunities IoT has to offer. HR must develop IoT strategies and capabilities to collect and maintain data points throughout the employee lifecycle across connected devices to derive the right insights. 
3. To do so, it is essential that the HR function is geared to deal with big data and that privacy and data security is always central consideration in how data is collected and used. 

The future will usher in a new era for HR

As we move toward 2030, we can expect a step change and the introduction of a new era of HR solutions and services. The future holds significant promise, yet as with any profession, HR professionals need to embrace these changes and adapt current ways of work to leverage the opportunities on the horizon.

Failing to do so will result in a workforce that is discontent when dealing with HR, a business that does not see strategic value in HR solutions, and a profession that struggles to attract new innovative thinking and skills due to its lack of progress.