Human resources departments have always had a people-centric focus, but now, more than ever, they must rely heavily on technology. According to a Gartner report, less than a quarter of HR employees believe their organization is deriving maximum value from their HR technology. Additionally, only about half of HR leaders feel their current tech solutions meet both present and future business needs. This dissatisfaction signals a significant gap that must be addressed for HR to function effectively.
The significance of regular technology audits cannot be overstated, given these statistics. Such audits ensure not only that HR’s tech stack is fully operational but also that it is being used correctly and is worth the investment. These audits are vital as HR attempts to achieve more ambitious goals with increasingly limited resources. Jamy Conrad, vice president of people and HR at TrustRadius, emphasizes that the changing demands of HR require it to be a strategic partner alongside executive teams. Therefore, HR’s tech stack must support its ability to engage effectively in these higher-level conversations.
Identify the Issue
Knowing when to initiate an audit is critical for HR departments aiming to maximize their tech ROI.
In an ideal world, HR would audit its entire tech stack on a regular basis, such as annually, according to Tim Whitley, director of technology support at Oklahoma State University. However, Whitley also points out the importance of timing; audits should be scheduled during slower seasons to avoid disrupting pivotal activities. For instance, performing an audit during the end-of-year budgeting or open enrollment periods would be highly disruptive. Instead, organizations should consider conducting an audit just after open enrollment when user experiences are fresh in mind.
Though regular audits are best practices, they more often occur as a response to specific issues. These issues could include tools going unused, being used improperly, or causing frequent frustration among HR staff. Addressing these pain points early can prevent long-term inefficiencies. A Gartner survey found that over 80% of HR buyers experienced regret over their software purchases. This buyer’s remorse can be averted through timely audits that reveal problem areas before they escalate. Furthermore, audits could uncover more serious issues such as unnecessary spending, security breaches, or noncompliance that might otherwise go unaddressed if audits are procrastinated or skipped.
Gather the Team
Once the decision to conduct an audit has been made, assembling the right team is the next crucial step. Tim Whitley advises treating the audit process like any other significant project by creating a project charter and a detailed plan.
Begin by identifying the key players in the audit process. You will need a project manager to coordinate activities, a sponsor to back the project financially and strategically, and a coordinator to ensure that all logistical elements are aligned. Once these roles are filled, developing a process map becomes necessary. For example, if the audit focuses on an applicant tracking system, mapping out the entire hiring process can help identify the various teams that need to be involved.
Having IT as part of the audit team is essential since they possess expertise that HR may lack. IT departments excel in areas such as governance, security, and privacy, which are vital to the audit process. Moreover, IT’s detailed understanding of the tools’ capabilities and limitations can offer insights to address pain points within a system, thereby improving functionality.
Besides IT, HR should also engage other departments and users who frequently interact with the technology under review. Regular meetings with IT and other departments can build a strong relationship, making it easier to collaborate effectively during audits. As Whitley notes, having an ongoing relationship with the team makes it easier to resolve issues when they arise.
Plan the Audit
Effective audits begin with meticulous planning. Before the team can get to work, a clear timeline should be established. Creating generous time windows for complex steps such as compliance reviews or legal assessments is crucial to avoid rushing through important parts of the audit.
In particular, when the audit involves third parties like vendors or consultants, clear communication about the timeline and expectations becomes even more paramount. Conducting remote audits is feasible but requires extra attention to ensure all team members stay responsive and engaged.
Planning also involves collaborating with software vendors. Many vendors are willing to conduct an audit themselves to highlight specific tool functions and uncover those that go unused. While vendor audits can be insightful, HR should prepare for sales pitches disguised as recommendations. Nonetheless, leveraging vendor insights can add valuable detail to the audit.
Detailed planning also involves anticipating and mitigating any hurdles that may arise. This necessitates building contingency plans for various scenarios. Proper planning sets the stage for an efficient and comprehensive audit that can bring significant ROI improvements to the HR tech stack.
Engage Vendors
Engaging vendors in the audit process can be a strategic move for HR teams utilizing larger software programs. According to Whitley, vendors often offer to conduct audits independently, providing insights into tool usage and performance that might be useful.
By engaging vendors early in the audit process, HR can gain a clear view of how existing tools are performing in real-world applications. Vendors can pinpoint specific functions the organization is using effectively and areas where improvements can be made. However, HR should anticipate these insights to have a sales angle, as vendors typically aim to push additional features or services to their clients.
Nevertheless, the value of involving vendors extends beyond just performance metrics. Vendors can also shed light on best practices and offer training or resources to optimize the use of current tools. While HR should be cautious in interpreting vendor-driven audits, the additional data points they provide can significantly inform the overall audit strategy.
Engaging vendors sets a solid foundation for a comprehensive audit, providing essential insights and recommendations for maximizing the tech stack’s potential.
Execute the Audit
Once the team is assembled and the plan is in place, it’s time to execute the audit. Performing a thorough examination involves assessing critical areas such as data usability, system integrations, performance metrics, scalability, and the use of artificial intelligence (AI).
For many HR departments, data usability is a primary concern. Investigating whether data collected by HR tools is readily accessible and easy to analyze can significantly affect the tech stack’s overall efficiency. Another key focus is system integrations, mapping out where one system integrates with another to identify any manual data transfer points that could pose a risk for errors or non-compliance. Performance metrics provided by tech vendors can also offer valuable insights into how well a tool is meeting its intended goals.
Scalability is another crucial aspect, especially for growing organizations. HR must ensure that their tech stack is capable of expanding alongside their department. Evaluating whether the current tools can meet future growth needs is vital for long-term ROI. Furthermore, AI plays a role in many modern HR tools, and while its use can significantly improve efficiency, HR must ensure AI is being applied ethically and transparently.
User experience remains a top priority during the execution phase. Engaging the end-users of the tools, whether through interviews or surveys, can help auditors understand how the technology is perceived and used daily. This step brings to light any usability issues and helps determine whether the technology enables or hinders employees’ performance and productivity.
Analyze the Results
After completing the audit, analyzing the gathered data helps pinpoint specific problems and areas for improvement. This step involves a comprehensive evaluation to prioritize issues based on their impact on business operations.
Jamy Conrad suggests starting with data analysis to determine the precise problems identified during the audit. By categorizing issues according to their severity and business impact, HR can create an actionable plan that addresses the most critical problems first. This ensures that compliance issues are dealt with immediately, while less urgent efficiency problems can be tackled later.
Tim Whitley takes a similar approach, posing questions like whether the organization should continue with the current system, whether certain functionalities are necessary, and if the team is satisfied with the vendor. This reflective analysis allows HR to make informed decisions about potential changes.
Creating a post-audit plan involves collaboration with key stakeholders, including IT, security, and leadership, to validate the findings and generate buy-in for proposed changes. This collaborative decision-making process ensures cohesive action that aligns with organizational goals.
Formulate Action Plan
With the analyzed results in hand, developing a comprehensive action plan is the next step. This plan should detail how to address each audit finding, from change management strategies to resource allocation, timelines, and success metrics.
Creating a robust plan requires prioritizing tasks based on urgency and business impact. Collaboration with key stakeholders ensures that the proposed changes are practical and aligned with organizational objectives. Engaging IT, security, and other relevant departments helps build a well-rounded action plan.
Implementing change management strategies is essential for ensuring the audit’s recommendations lead to meaningful improvements. Effective communication, training, and ongoing support are critical for helping employees adapt to new tools or optimized systems. By fostering an environment where employees feel supported, the organization can enhance productivity and job satisfaction.
Leverage AI
Incorporating generative AI (GenAI) into the audit process can significantly enhance efficiency. Tools like ChatGPT can synthesize data, summarize findings, and provide insights, making the audit process more streamlined. However, HR must approach AI with caution, ensuring the accuracy and ethical use of generated insights.
While GenAI can speed up data analysis and plan development, it is crucial to build checks and balances into the process. Auditors should verify AI-generated recommendations and account for potential biases. Ensuring compliance with data protection laws and maintaining ethical standards are paramount.
GenAI serves to enhance audit efficiency and effectiveness, but HR teams must remain vigilant in validating AI-generated data and recommendations to avoid potential pitfalls.
Focus on User Experience
Human resources departments have always been centered around people, but now they increasingly depend on technology. The modern HR tech stack is essential in supporting daily functions across all HR roles. From connecting recruiters with job seekers, providing leave managers with crucial absence data, to equipping benefits specialists with administrative tools, technology is integral to HR processes. Despite this, many HR professionals are unhappy with their current tech stack’s efficiency and adequacy. According to a Gartner report, fewer than 25% of HR employees feel their organizations are getting the most value from their HR technology. Furthermore, just about 50% of HR leaders believe their existing tech solutions meet both immediate and future business needs. This dissatisfaction highlights a critical gap that must be addressed for HR to function optimally.
Regular technology audits are paramount given these statistics. These audits ensure HR’s tech stack is not only fully functional but also used correctly and worth the investment. As HR aims for more ambitious targets with limited resources, such evaluations are crucial. Jamy Conrad, Vice President of People and HR at TrustRadius, emphasizes that HR must evolve to become a strategic partner with executive teams. As such, HR’s tech stack must facilitate effective engagement in high-level discussions. This strategic alignment ensures HR can achieve its broader goals efficiently and effectively.