Transforming HR with the Right Tech Stack

The HR tech market is booming, with 2024 predictions estimating it will hit $81 billion by 2032. Everywhere you look, hundreds of slick new tools promise to make HR stronger, faster, and more efficient.

Despite the wave of innovation in HR technology, 55% of HR leaders report that their current systems fall short of meeting their organization’s needs. Many grapple with fragmented, disconnected tools that fail to deliver the automation and insights they seek.

The right HR technology can unlock greater efficiency, drive cost savings, and future-proof your people management processes as your organization expands. But to realize these benefits, you must be conscientious and strategic in selecting solutions that align with your organization’s present and future needs.

So, where do you start? And how do you define what you’re looking for? In this article, we’ll walk you through defining your evaluation criteria and best practices.

What is an HR Tech Stack?

An HR tech stack describes the collection of tools your organization uses to manage HR processes across the entire employee lifecycle. Think of it as the digital building blocks that support vital processes, including talent acquisition, performance management, employee engagement, and compensation.

Depending on your organization’s needs, your HR tech stack could consist of one all-in-one platform that centralizes all your data and processes (e.g., HRIS) or multiple platforms that interconnect and share data.

Whether you pick one approach or the other, a well-designed HR tech stack doesn’t just improve how HR operates as a function — it can impact the whole organization. The right tech can drive greater efficiency across key processes, create a better employee experience, and build a scalable digital foundation as your organization grows.

Types of HR Tech You May Need

The best HR tech stack is tailor-made to your organization’s needs, goals, and strategy. But broadly speaking, you’ll want to cover some or all of the following HR functions:

• Human resources: Your HR nerve center, where you manage core HR functions and administrative tasks like employee data and documents.
• Workforce management: Time and attendance management, shift scheduling, and time collection.
• Payroll: Global payroll, expense management, tax services, and other salary-related tasks.
• Benefits: Manage and provide access to your organization’s benefits offering.
• Talent management: How you hire and develop employees across the employee lifecycle, including recruitment, onboarding, performance, learning and development, and compensation management.
• Headcount planning: Managing future hiring needs, employee lifecycle management, recruitment workflows, and recruitment costs.
• Employee experience: How you engage employees and help them feel connected to your organization, including feedback mechanisms, recognition and rewards, and collaboration platforms.

Access management: Managing employee identities and access to your

How to Choose the Right HR Tech for Your Organization

Feeling a little lost on where to start in building your HR tech stack? We hear you. There are thousands of shiny new HR tech platforms out there, and weighing which are right for your organization is no easy task.

But you know what they say: A little planning goes a long way. Taking the time to evaluate your current challenges, processes, and business needs upfront will help you identify the right toolset to meet your organization’s unique needs.

1. Define Objectives and Pain Points

Start by evaluating your current state of play as a department. Use business and HR metrics to help you identify your goals, challenges, and pain points. Align these with the long-term goals of the broader organization.

For example, if your organization plans to launch an initial public offering (IPO) in the near future, strong reporting and compliance functionality will be essential. Similarly, if you plan to triple headcount in the next two years and expand your global presence, scalability and global payroll will be critical.

Use the questions below to guide you:

• Why are we looking for a new product?
• What are our current biggest pain points and challenges as a team?
• Do we have any specific complexities, such as a differentiated PTO model or benefits options?
• How do these needs fit in with our organization’s long-term goals and future strategy?
• What are our non-negotiables when bringing in a new tech solution? 

2. Map Your Current Processes and Tech Stack

Building an effective HR tech stack means prioritizing tools that add value and avoiding unnecessary complexity.

As you evaluate your current HR processes and map them to your existing tech stack, pay close attention to which tools are working well, and where there might be tooling redundancies or overlap:

• What are the strengths and weaknesses of each platform in supporting our goals and day-to-day processes?
• Are there any platforms that have similar features or functionalities?
• How much will it cost? Are there any additional costs, such as implementation or add-on functionality?
• Does this product fit our desired timeline?
• What are the shared commonalities of our preferred tools — for example, a smooth user experience, seamless integrations, or single sign-on capability?
• What are the technical and non-technical specifications that make these tools a good fit?

3. Build an Evaluation Scorecard

While you’re exploring the marketplace, you’re likely to come up against some flashy products with some even flashier sales pitches. Figuring out which will have the highest impact needs a (slightly) scientific approach.

Create a scorecard based on your defined criteria to help you evaluate each product objectively in terms of its feasibility and compatibility with your budget, long-term goals, technical infrastructure, and challenges.

Use the following questions as a guide and shape them according to your own criteria:

• How will this product help us solve our current biggest challenges or achieve our objectives?
• What’s most important to us in a tool — functionality, lots of features, scalability, or the ability to solve a specific problem?
• Is this product easy for employees to use, or is training required?
• How well will this product scale in the coming five years? Will it be able to support a significant increase in users or usage?
• How will HR data flow between this tool and our existing tech stack?
• How easy is it to export and report on our data?
• What support is available from the vendor?

4. Run a Technical Evaluation

Understanding where new technology fits into your HR processes is one thing, but you’ll also need to evaluate how well any chosen solutions will play with your existing systems.

Collaborate with IT and your information security team to scope out your existing technical infrastructure. Assess the feasibility of each solution in line with your current needs:

• Will our chosen solutions integrate with our existing tools? What about platforms used by other key internal stakeholders, such as Finance?
• How is data shared across our organization and existing tools? And does the new tool work with this process?
• How will we ensure any new tooling is compatible with our existing data and systems?
• What is needed to ensure a successful migration from both sides?

Best Practices for Adopting and Implementing HR Tech

Bringing in a new HR tech platform is a long-term, cumulative effort that involves the whole team. But to make sure things go off without a hitch when launch day comes, get ahead with these best practices for a successful implementation:

• Bring in C-suite support early: As with any big change, having a senior champion in your corner will help drive understanding, gain buy-in, and create a smooth adoption process.
• Don’t forget the training: Introducing any new tool is a learning experience — for your HR team and for your workforce. Get ahead by assessing training needs beforehand: How can the HR team get the most from the new tool? What information does your team need to use the tool effectively?
• Communicate changes clearly: Employees need to understand what’s changing and how it impacts them. Create an FAQ or video explainer to help employees quickly get to grips with the new tech, get ahead of inevitable questions, and ensure strong user adoption.
• Track, measure, repeat: Measure and track the success of your new tooling by setting key performance indicators (KPIs) and success metrics, such as user engagement, time and cost savings, and qualitative data from employee feedback. Set up a regular cadence to review feedback and tooling provision with your cross-functional task force.

Building a Future-Ready HR Stack

Your organization’s HR tech stack is more than a handful of tools — it’s the strategic foundation that helps you streamline processes, optimize for efficiency, and create a better employee experience.

But to maximize the return on your investment, it’s critical to lay the foundations for successful adoption and implementation. And, of course — choosing the right partner helps.

Paylocity is an all-in-one HCM provider that empowers organizations with an integrated system to manage HR operations and processes in one cohesive platform.

With tools designed to support every stage of the employee lifecycle, Paylocity helps HR teams large and small increase efficiency, improve employee engagement, and build a future-ready HR function.

Want to learn more? Request a demo today.