The evolution of HR technology: A brief history

Written by Dieter Veldsman & Annelise Pretorius

Technology has significantly changed HR. From our roots in the early 20thcentury driving manual and paper-based record keeping and labour relations practices to the connected, integrated, and digital employee experience that HR professionals drive today.

The advances in HR technologies are often only seen in transactional automation and databases, yet the real impact of HR technology goes much further. To fully understand this landscape, let’s look at the technological advances in HR based on five key movements.

Movement 1: Tracking of time, attendance, and manual recordkeeping (Before the 1950s):

The earliest forms of HR technology can be described as manual filing systems related to keeping employee records and capturing time and attendance through punch card systems. IBM was a crucial player in this era with their “IBM Punch Card.” The automated clock provided more accuracy in tracking employee time and subsequent wages, with the 1940s seeing advances in computerised systems used for basic transactional processing. Predominantly, these systems were used for payroll payments; they were large and expensive and predominantly used by larger organisations.

Movement 2: Paper-based systems to transactional databases (the 1950s to 1980s):

The development of mainframe systems allowed for more advanced processes to be automated, such as the collecting, storing, and retrieving of employee records. During this period, HR Information Systems (HRIS) were developed, which still form the basis of several modern HR technologies. As organisations became more complex and sophisticated, the need for client-server technology resulted in the growth of Enterprise Resource Planning in the 1980s. This era saw organisations, such as IBM and SAP, dominating the market and introducing major advances which still form the basis for many technologies used today.

Movement 3: Personal computers (PCs) (1980s to 1990s):

The personal computer and connected networks led to a significant shift in how HR data was used. Personal computing created the opportunity for greater workflow-related processing, improving HR services’ speed and efficiency. HR systems became more affordable for small and medium-sized organisations, but physical on-site network constraints resulted in limited use by employees and managers based outside of headquarters or regional offices. The first version of PeopleSoft was released in 1989 as the first fully integrated client-server HCM solution.

Movement 4: Web-based systems and remote access (the late 1990s):

Web-based systems ushered in a new phase of HR technologies. The ability to access HR systems remotely and increases in data storage and computing capacity led to the rise of employee self-service technologies and more advanced reporting and analytical capabilities. Self-service portals were integrated into company intranet solutions and used extensively to reduce the cost of HR administration. Many HR practices were becoming more technologyenabled, and the development of the first job board by Monster in 1994 and Applicant Tracking Systems in 1998 was a key milestone that would forever change recruitment practices.

Movement 5: Social Media, Cloud, and Software as a Service (the 2000s to today):

Social media in the early 2000s changed HR, particularly in recruitment and employer branding practices. Public ranking platforms emerged and provided a place for employees to review their companies.

Today, HR has moved into the Cloud and numerous new Software as a Service (SaaS) platforms have rapidly emerged. The HR Technology market is anticipated to grow to US $63 billion by 2032. These modern systems are built from an employee perspective as employee experience and data intelligence is prioritised, resulting in a move away from traditional functional and process-heavy IT architecture.

Major advances in people analytics have also seen a significant increase in analytics tools and platforms utilised in conjunction with traditional core HR systems. These advances have called for more sophisticated approaches toward data governance and IT architecture, a domain that has historically been a significant pain point. Chatbots have also become commonplace as a method to drive HR services. With technologies such as ChatGPT opening up new possibilities related to language processing models, we can expect a sharp increase in the uptake of these technologies over the coming months.