How Can Modern HR Tools Drive Value Creation?

A well-managed human resource promises the organization long-term success, and HR acts as a facilitator to achieve this success. Human Resource teams act as a vital link between an organization and employees to build a healthy work culture and align the workforce to the organization’s goal. But in recent times, the role of HR has become more critical due to diversity in the business trends and complexities in the HR operations. HR  is a value-driven activity that requires systematic approaches, and the traditional HR system cannot be fulfilling.

Some of the characteristics of today’s HR activities include; creating more jobs, hunting for placements, delivering a better experience to employees, retaining employees, meeting customer expectations, creating value for stakeholders, and building a sustainable business model. The traditional HR system has limitations in justifying the demand of modern-day work culture. Modern HR tools are equipped with the latest technologies such as AI and cloud computing.

An efficient HRM (Human Resource Management) system, employee engagement software, performance appraisal software, performance management software, etc., are a few tools that companies today can rely on for their HR purposes.

  • Increase stakeholder’s value: Stakeholders can be active and passive. Active stakeholders include customers, suppliers, employees, business partners, managers, etc., while passive stakeholders include trade associations, investors, government and regulators, etc. HR professionals have the responsibility to work in the interest of stakeholders, especially employees.  They have to ensure that they create value for stakeholders and draft HR policies that address their expectations.  HR tools can help HR people in various ways to enhance stakeholder’s value; for instance, they can keep track of audits that give insights into the overall business performance and ROI, or increase employee’s efficiency through a training program. They can even use HR tools to keep track of various government regulatory laws and ensure that everything is conducted as per the rules.   In addition to that, the modern HR tools automatically track the expenses, which assist HR professionals in managing stakeholders’ (investors) funds properly.
  • Data analytics: A data-driven HR department can have detailed insights on business processes, which can be very useful in making a critical decision. It helps to combat core issues of HR such as higher attrition rate and employee retention.  The modern-day HR tools analyze data beyond normal reporting. It supports next-generation data analytics – descriptive, predictive, and prescriptive analysis. These data analytics provide actionable insights on the current situation, predict future outcomes, and suggest actions to deal with future events. It has completely changed the HR professional’s approach for managing their human resource.  This data is crucial for the HR team to analyze the needs of the employees and the resources required to accomplish their work.
  • Avoid HR lawsuits: Organizations need to follow various laws for the fair practice of employees’ rights and workplace safety. Organizations that fail to meet regulatory compliance can attract fines and legal proceedings. In addition to that, it can bring a bad reputation to the organization and deteriorate the brand value. Organizations can avoid these by remaining vigilant over various HR lawsuits with the help of HR tools. The software sends alerts on various HR compliances to protect them from the violation of rules.  It helps organizations always perform within the legal framework and avoid fines.
  • Employee Retention: In a dynamic work environment, skilled workers are the gems you cannot afford to lose, and therefore organizations invest in the best HR tools. There could be many reasons for employees leaving the organization- lack of training and development opportunities, workplace culture, job below expectations, employee burnout, etc. HR professionals can use the HRMS system to address employees’ pain points and improve the percentage of employee retention. They can use the HRMS system for smooth onboarding, taking employees’ feedback, scheduling employees’ training programs, leave management, tracking performance and rewarding, etc.  The HRMS system allows the HR team to monitor the entire lifecycle of the employees and pinpoint areas that could cause a problem for employee retention. Besides that, it assists in mitigating the issues faced by the employees on a regular basis.
  • Automation: By automating some core HR activities, the organization can speed up the administrative tasks and enhance the employee experience. HR can use HRIS systems to send offer letters to candidates, onboard candidates, automate reminders, enroll candidates to training, schedule meetings, collect employees’ feedback, etc.  It helps HR focus on tasks that add value to the organization and improve employees’ experience. The modern HR tools are even more advanced in their features and use intelligent technology like AI and NLP (Natural Language Processing). AI and NLP can be used for employees’ behavior analysis, which gives HR in-depth knowledge about how employees respond in particular situations. They can use this information to create employee-friendly policies and enhance employee experience.  Overall, HR Management systems with automation capabilities can assist the HR team in developing a stress-free workplace and optimizing their output.
  • Cloud technology and remote work: Cloud technology has helped to enhance the employees’ experience through remote work. It has enabled employees to work from anywhere and communicate in real-time regardless of their geographic locations. Cloud computing has been an incredible tool not just for employees but even for HR. By eliminating the barrier of geographic locations, organizations can rope in the best talents in the industry beyond boundaries The online HR tool help to centralize the HR workflow and involve team members required for necessary approvals.


Disruptive business trends are forcing HR leaders to build a sustainable, and value-driven organization. HR is expected to focus on optimizing the efficiency of human capital and delivering a better employee experience. The traditional HRM system is outdated and does not sync well in the framework of a value-driven organization. The only viable way is to adopt the modern HR tools that could respond better to the HR challenges and automate the HR activities.  If your organization aims to streamline the HR process and drive value creation, then invest in the best HR software.

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