HR & Business πŸ“ˆLearning & Development πŸ“š

Benefits of automation and digitalization in HR and L&D

automation and digitalization in HR and L&D

It’s no wonder that the classic approaches to HR and employee development undergo constant transformations. The outlook on HR and L&D is changing alongside the technological progress. The changes affecting these areas are really dynamic and the need for regular process updates is both time-consuming and costly. The benefit of automation and digitalization in HR and L&D is, above all, the ability to gain control over the processes in your organization. They will become much simpler, more cost-effective, and, above all – free of human error.

The modernization of HR and L&D processes will primarily result in savings:

  • lower costs,
  • shorter time of HR managers,
  • higher efficiency – there are fewer errors in automated work as compared to traditional methods.

The benefits of automation and digitalization in HR and L&D have been confirmed by a number of studies. Based on their results, we can reliably evaluate what impact these processes have on business. 

Can you save 200 million dollars on training?

This is the estimated amount saved by IBM in relation to their expenses on employee development. How did they do that? They managed to save so much by remodeling the training method and they generated savings by introducing online training in their company. This amount made up about 33% [1] of their employee development budget in the analyzed period.

According to the results of the same study, Ernst & Young also managed to reduce their costs by 35% [2] after it implemented blended learning. Besides the obvious savings in their training budget, the company saw measurable benefits regarding the time spent on training. In this respect, they saved up to 52% [3] of the time they had to use at internal courses.

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This issue has also been studied by Judith B. Strother. In her report, she refers to the research results by Hall and LeCavalier. To learn more about her report and to find out how to reduce the cost of training, click this link. The analysis shows the immense impact of the implementation of L&D e-learning tools on the company finances.

In the case of large multinationals, such as IBM or Ernst & Young, digitalization in terms of L&D was just a matter of time. As far as big corporations are concerned, technological advance and the global scale of their operation simply triggered the dynamic development of online learning within their structures. You must bear it in mind, though, that the report was prepared in 2014. Since then, the process of digitalization in the field of L&D has accelerated at a galloping pace. You must also remember that the outbreak of COVID-19 has played an important part in the world of L&D. In 2020, digitalizing L&D processes has become a mere necessity rather than a way to save money or build a brand image.

14 hours per week of one HR manager’s working time [4]

This is how much can be saved and used in a better way. How is that possible? It’s all about moving from traditional, manual methods of performing the duties to automated work. CareerBuilder informs that the saved time can be prolonged to even 30 hours a week! The analysis presents detailed factors which cause the high losses in productivity among managers. They are:

  • error detection and fixing,
  • operational time loss,
  • lower efficiency,
  • higher operational,
  • lower engagement,
  • and more.

Of course, all those aspects refer to working in non-automated environments. As part of the study, the level of automation in particular HR functions has been evaluated, in accordance with the following criteria:

  • fully automated,
  • partially automated,
  • not automated.

Within these criteria, the following HR functions have been assessed:

  • training and learning,
  • onboarding,
  • applicant tracking,
  • distributing job postings to different websites,
  • predictive assessments,
  • employee referrals,
  • and more.

The authors of this study say unanimously that automation is a must in the field of HR as it facilitates daily work and reduces losses both in terms of money and working time. Interestingly, the preferences of HR managers themselves have also been analyzed, concerning their views on involving AI in particular processes. Up to 35% of HR managers [5] claim that the thought of AI in HR makes them nervous.

10–20% – that’s the actual level of savings resulting from HR process automation [6]

A study by Hewitt Associates reveals that these values can be saved in overall benefits and delivery costs with HR process automation. However, the benefits include more than the reduction of financial costs. This is how businesses can improve once introduce HR process automation:

  • better communication among employees,
  • up-do-date process analysis and reporting,
  • data analysis integration.

Automation and error management in particular processes

As they say, to err is human. And you can’t escape that at work. However, automation makes it possible to eliminate human error. In other words, automated processes are more effective than the manual ones, carried out by employees.

According to a study conducted by Professor Raymond R. Panko, when manually entering data into simple spreadsheets, the probability of human error is between 18% and 40%. [7] In complex spreadsheets, that probability increases to 100%! [8] In his paper, Professor Panko also analyzes the question of error checking. People have difficulties when it comes to their ability to spot their own errors. For instance, studies show that those who try to detect errors in spreadsheets that they have prepared themselves have 50% chances of spotting them. This means their work has to be verified by another person. Naturally, that generates more costs, because another employee needs to be involved in the process. 

Professor Panko points to another problem. HR teams using manual data entry spend at least 15% of their working time doing just that. [9] While in extreme cases, this number may reach 50%. [10] In such circumstances, real-time reporting is virtually impossible. And since so much time is spent on managing and processing information by hand, other problematic situations may arise, e.g. related to updating the information in databases. If the process is spread over time, the reported information might be outdated. 

Summary

Certainly, all of the problems mentioned above must be dealt with successfully sooner or later. Automation and digitalization of HR and L&D processes should facilitate the operations described here. Automated work, by definition, is quicker and more effective, whereas digitalization enables organizations to reduce their costs resulting from the use of manual processes. This is possible thank to quicker communication, higher effectiveness, and streamlining particular stages of a given process. This way, companies are able to optimize their costs globally, achieve better results at work, and manage their staff and their roles in a more effective manner.

Sources:

1. https://elearningindustry.com/dramatically-reduce-corporate-training-costs

2. Ibidem

3. http://press.careerbuilder.com/2017-05-18-More-Than-Half-of-HR-Managers-Say-Artificial-Intelligence-Will-Become-a-Regular-Part-of-HR-in-Next-5-Years

4. Ibidem

5. https://www.techfunnel.com/hr-tech/what-are-the-positive-and-negative-impacts-of-automation-in-hr/

6. https://www.hrzone.com/lead/change/hr-automation-why-real-time-reporting-is-about-more-than-accuracy

7. Ibidem

8. https://www.hrzone.com/lead/change/hr-automation-why-real-time-reporting-is-about-more-than-accuracy

9. Ibidem

10. Ibidem

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