The Future of HCM Technology: Where It All Began and Where It’s Going Now

When I discuss what the future may hold for human capital management (HCM) software with clients, there are usually questions about what direction the industry is going and what new trends and functionality we may see in upcoming years.  To truly appreciate where the industry is headed, I think it’s always important to look back to where HCM software began to see how far it has come.

First, let’s establish what I mean when I say HCM software and platforms. I define HCM software as an all-encompassing system that includes technology to manage payroll, timekeeping, labor management, scheduling, human resources information, applicant tracking and benefits. With that definition in mind, let’s go back to the beginning to see where this kind of technology all started.

When did HCM technology start being utilized?

Payroll was one of the earlier office functions to benefit from the use of technology.  The first payroll automation tools started in the late 1950s and expanded rapidly as computing evolved at the worksite.  Similarly, timekeeping tools started advancing from punch timeclocks into software-based solutions that grew just as quickly with the other technology alongside it.

HR software, benefits and applicant tracking applications typically were first developed as standalone tools designed for their specific purpose without integration capabilities.  Over time, people began building these tools to communicate and pass data back and forth between each other to create a more streamlined experience.

Where is HCM technology going now?

There are a few major trends on the horizon that I suspect will be incorporated into HCM systems. They are as follows:

Integrated systems. The strength of an HCM system is defined by the output of its functionalities.  HR is driven by data now more than ever in order to have its “seat at the table” in leadership discussions around business development. Simply put, if you are having a strategic conversation with leadership, you’re going to need numbers to back it up.  Being able to pull reporting across payroll, HR and timekeeping is invaluable in this pursuit.  Imagine looking at turnover numbers relative to the amount of overtime worked.  Performance review scores vs seniority or education.  Do applicants from specific sources stay longer than others?  All these things and more are possible with an HCM platform that integrates all of your data and processes.

Growth in AI. If you have all of your data in a centralized system, that makes your reporting abilities much more powerful. Even with the current robust reporting we’re seeing today, there’s already a shift to move beyond the typical idea of what reporting means. Companies are beginning to use AI and machine learning to look at trends in their HCM data to assess metrics like flight risk or AI-driven sentiment analysis on employee comments on engagement surveys.  Over the next few years, we’re going to continue to see more HCM systems utilizing AI to address HR issues and processes before they are even present in the workplace.

Self Service. Historically one of the main barriers to employee self-service for HCM has been the reluctance on the part of business leaders, especially where the workforce is remote.  The main concern is the belief that some functions on an employee self-service portal would be too complex for those who don’t regularly use computers in their daily work.  However, with the explosive growth of smartphones, using advanced technology is now an everyday occurrence. As of early 2021, 85% of adults in the US own a smartphone.  For people under 50, that number increases even higher to 95%.  Employees are more comfortable than ever handling technology.  In fact, most employees are now noticing how difficult it is to use the software programs provided to them by their employers. Recent research shows that over 55% of employees agree that it’s easier to find a movie on a streaming service than it is to find out about their health insurance.  Employees have a growing expectation of consumer-grade technology in the workplace and if you aren’t delivering on that front, employees often will view it as the employer not properly investing the employee experience.

Even if these trends aren’t quite a reality yet in some cases, it’s still important to be aware of what’s in store for the near future so you know when it may be time for an upgrade. Not sure where to start on whether a robust HCM system is right for you? First, it’s important to take an introspective look at your business processes so that you understand what your individual challenges and needs are going to be.

From there, our expert HCM team at BerganKDV can work with you to explore the capabilities of our HCM software, K-Pay, to determine if it would be a great fit for your business. Request a free demo of K-Pay by filling out the form below or register for an upcoming webinar where our team discusses the future of HCM technology and what’s already a reality today.


Blog Resources:

CATEGORIES: Human Capital Management
Notify of

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Inline Feedbacks
View all comments


Let us know a little about yourself! We’ll deliver timely news straight to your inbox.