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Impact of HR automation shows up in data and surveys

Recruiters are taking on more strategic roles, thanks in part to automation tools. But HR departments are facing another trend: declining budgets.

HR automation technology is helping to improve the performance of recruiters. But it is also helping large firms run HR operations with fewer people.

HR operations at larger firms are facing a wide range of changes against flat budgets. This is being driven by several trends.

First, the job of recruiters is changing to more of a consulting, data analytics role, according to a new study by LinkedIn Corp.

LinkedIn found recruiters are adding skills, such as data analytics and consulting, to their profiles. They are having "more strategic conversations with talent managers," said Amy Schultz, director of talent acquisition at the social networking company in Sunnyvale, Calif.

In the new survey, "better recruiting tools and technology" was cited as the top performance booster by 68% of the 2,850 recruiting professionals LinkedIn surveyed globally.

Second, Gartner said HR departments at U.S.-based firms with a revenue of $500 million or more are shrinking. In 2015, there were nearly 61 full-time equivalent (FTE) employees per one FTE HR employee. In 2019, the ratio is 66 FTE employees per HR employee, according to Gartner research.

HR staff is supporting more employees

"In other words, each HR person is now supporting about 10% more employees," said Brian Kropp, chief of HR research at Gartner. One reason for the change is that technological investments have made HR more productive, mostly due to improvements in large HRIS systems.

HR staffs are shrinking chart
HR staffs are shrinking

HR is also shifting more of its talent management work to line managers, according to Kropp.

Another big challenge for HR is its role as a back-office function. Harry Osle, principal in charge and global human resources practice leader at The Hackett Group, said firms have shifted away from revenue growth to bottom line growth, or a focus on net income.

You're not going to see a lot of growth in HR.
Harry OslePrincipal in charge and global human resources practice leader, The Hackett Group

"You're not going to see a lot of growth in HR," Osle said.

Olse sees changes in recruiting as well. "There is more automation; there is more technology involved," he said. The Hackett Group, a consultancy based in Miami, isn't seeing growth in the number of recruiters, "but you are seeing growth in the productivity of recruiters," Osle said.

Recruiters get a bigger role

LinkedIn's belief is that the job of a recruiter is shifting to more of a strategic advisor role.

In LinkeIn's survey, 82% of HR managers said recruiters will play a more strategic role advising business leaders in the next five years. The rise of recruiters in strategy is reflected in who businesses are appointing to become heads of recruiting, according to its analysis. 

About one in three of these leadership positions is filled by people who came from sales, operations and business development jobs, something LinkedIn sees as an indicator of this shift to a strategic business background, according to Schultz.

But Schultz said one issue complicating HR automation is that many of the technologies and tools "still don't talk to each other, so recruiters are actually spending a lot of time toggling between different tools and technologies."

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