Research Library Article


Does HR Technology Pay for Itself?

David Earle

A worldwide consultancy examines the data on how online talent platforms affect output, costs and profits in professional services, high tech, hospitals, retail, manufacturing and banks.

“Online talent platforms” is an umbrella term for the various technologies that companies put in place to manage their human resource function. It’s a broad descriptor, referring to innumerable combinations of rapidly evolving products and services from hundreds of vendors.

There is ample evidence that individual activities within HR have benefited from parts of this technology — applicant tracking software for example — becoming as a result both more efficient and effective. But because individual platforms have been so diverse, and the technology landscape has evolved so rapidly, measurable business benefits at the enterprise level, backed up by reliable data, have only recently begun to come into focus.

For many companies, the key question remains, “Are these investments benefiting our business as a whole?”


This report, one of many derived from McKinsey’s ongoing global talent surveys, examines these macro benefits and finds that when talent platforms are developed to their full potential — and many are not — the bottom line rewards are substantial.

For example:

  • Output can increase up to 9% (professional services)
  • Employee-related costs can fall by up to 7% (high tech)
  • Profit margins increase between 110 basis points (retail) and 540 basis points (professional services)

These benefits accrue over the full range of HR’s portfolio: from better targeting of new hires and better matches between work assignments and talent — which leads to higher output — to better management of careers and longer employment tenures. The impact of a well developed talent platform is a workforce of better employees who work more productively and may also cost less.

Can technology by itself achieve these gains? Of course not. Technology offers only a set of tools. The benefits derive from how those tools are selected and used. For that reason it can be difficult to separate superior technology practice specifically from superior HR practice in general.  All things being equal, newer technology trumps older technology, but as we noted in last week’s UPDATE article, the business benefits of any generation of technology depend on culture.


  • A more transparent job market
  • Incremental impact of online talent platforms
  • Matching labor supply and demand in the new era
  • Maximizing employee performance
  • Onboarding and training
  • Raising employee engagement
  • Strengthening leadership and creativity
  • Industry examples
  • Embracing the opportunity


Research Source
Title Managing Talent in a Digital Age
Author McKinsey
Date 2016
Pages 9
Cost Free
URL Link
Staffing Library Keywords Technology, leadership, strategy, efficiency, effectiveness