I’ve been an analyst following the HR tech market for almost 20 years now, and the pace of change never ceases to amaze me. In this article, I’ll highlight 10 of the major changes impacting HR now. These changes will disrupt existing HR processes, factor into technology purchasing decisions, and influence staffing decisions in the years ahead.
Shifting from Automation to Productivity
For many years, the focus on HR technology was to automate and integrate HR practices. Systems were implemented to automate virtually all areas of HR – from payroll to learning management to recruiting to performance management. Now these systems are common and viewed as “business as usual.”
But the big topic in business today is productivity. We are now working in agile, team-centric organizations. Employees are often overwhelmed with too much to do and typically must deal daily with a plethora of tools, as well as bulging inboxes and a barrage of communications. The next big challenge is building HR software that truly improves employee productivity and helps teams work together better.
The Cloud: Important, But Not the Only Thing
In the last five years, cloud-based HR systems have become the rage. More than two dozen vendors currently offer HRMS, payroll, and many talent management services in the cloud, and in most cases, they also offer financials and ERP solutions as well.
However, despite these rapidly maturing solutions, only about 40% of companies today use cloud HCM solutions. Companies yet to adopt cloud solutions agonize over vendor selection for months or even years because of a system’s potential impact and lengthy implementations.
I believe this worry is misplaced. While cloud HR and payroll systems are indeed critical, they can readily be replaced. The more important technology – usually separately purchased –is talent and team management software. I foresee the architecture of most companies as a set of services, all focused on making employees’ work lives easier and more productive, rather than a single cloud solution.
Get with Continuous Performance Management
Continuous performance management not only is possible, it works and it can transform your company. This doesn’t mean dispensing with ratings; rather, we are talking about building a new, ongoing process for goal setting, coaching, evaluation, and feedback. And, despite the tremendous success of the cloud HCM vendors in the market, most do not have a total solution for continuous performance management. I believe companies will be buying new products to address this need, and the new “team-centric” tool vendors are likely to become future leaders in the future HR technology market.
Engagement and Feedback Tools Foster Increased Transparency
Only a few years ago, engagement survey tools were a small blip in the HR tech market. Today, this is a dynamic niche incorporating real-time survey systems, sentiment analysis software, organizational network analysis (ONA) tools, and products that automatically ask peers for feedback to give employees real-time coaching.
Open feedback tools are giving employees many new places to comment on the workplace. We’re seeing new systems coming to market that offer pay transparency and, through crowdsourcing and benchmarking, help employees “find their worth.” The demand for transparency has also spawned a new set of pulse surveys, AI-based analysis and recommendation systems, and culture assessments throughout the marketplace.
Corporate Learning Is Being Reinvented
A new breed of corporate learning tools has finally arrived, and companies are snapping them up quickly. These include learning experience platforms, micro-learning platforms, modernized LMS systems, and new AI-based systems to recommend learning, find learning, and deliver learning. I expect to see smarter and smarter technologies to help employees find just what they need, coupled with content that is highly engaging and designed for time-pressed employees. Tools that give employees the ability to publish and share content will also be part of a company’s learning ecosystem.
The Recruiting Space Is Thriving
Recruitment is the largest market segment in HR. Companies spend billions each year on recruiting as companies engage in an escalating war for talent. High volume recruitment for areas such as hospitality, services, healthcare, and retail is being automated by chatbots and other new tools. Skilled job recruitment is being revolutionized by open sourcing tools, more automated applicant tracking systems (now called recruitment management systems), and better assessments. And video assessment and culture assessment tools have matured enough to make them usable by any company.
New tools help employers find people with the right capabilities and learning skills, not just technical or cognitive abilities. Diversity is now an important factor in recruiting, and new technology can help remove bias from job descriptions and interviewing.
Not only do we need tools to improve productivity and reduce cognitive overload, but we also need “nudges” and data to help us exercise, stay mindful, and learn how to sleep and eat better. My experience with the vendors in this market space is that they are driving tremendous value for their customers. Their clients are seeing rapid adoption especially among younger workers and great improvements in engagement, health, and mental wellbeing.
The wellbeing initiative has moved from a strict focus on health to a broader focus on human performance. This is the journey most HR departments are embarking on and the vendor market is moving fast to support.
People Analytics Are Coming of Age
I am seeing a tremendous shift from companies “playing” with analytic models to making serious investments in analytics in order consolidate people data and make it actually usable. Companies are recognizing that employee-related data is just as important as customer data because it reveals ways to better manage the business.
Nearly every HCM vendor has embedded analytics, many with prediction engines, and new vendors are starting to apply AI to their offerings. While this market has been very long in coming, the growth of cloud platforms is now making it explode. It’s easier than ever to build a manager-level dashboard that helps teams understand what they can do to make the work experience better.
We can now look at core HRMS data (turnover, tenure, performance rating), relationship data (whom employees know and spend time with, wellbeing data (activity, location, energy, wellbeing), and sentiment data (feedback, mood, and sense of belonging). All this data is falling into the laps of HR departments and they are now starting to grapple with the issues of ethics and privacy.
I personally see people analytics as the lynchpin of success for HR in the next few years, as all these other technologies throw off data at an ever-increasing rate.
Intelligent Self-Service Tools Improve Employee Experiences
Perhaps the most important new HR market space is occupied by the fast-growing self-service, employee experience platforms. These systems bring case management, document management, employee communications, and help-desk interactions into one integrated architecture. They sit between employee and back-end applications and serve as the heart of employee service centers.
Vendors in this space are rapidly integrating AI into their offerings. I’ve talked with vendors offering smart chatbots, intelligent agents, and amazingly fun games that make training, expense reporting, time tracking, and almost every other HR function easy. One vendor showed me a voice application that lets you query the system for vacation balance, performance tips, and even compliance training.
Innovation within HR
I am also seeing incredible innovation within HR teams. We, as HR professionals, are now becoming the disruptors of business. In the past, we waited for tech companies to invent things for us to figure out how to use. Now HR departments are experimenting with new performance management models, new learning strategies, new ways to reduce bias, and new techniques to recruit and coach people. Then they go into the market and see if vendors are available. This shift to me is a disruption itself – forcing the HR technology community to move even faster than ever.
This is a rapidly changing market and one currently in hyper growth. And I predict there’s much more change to come. I invite you to read more about this topic and many others impacting every facet of HR at www.joshbersin.com
Author- Josh Bersin, Independent Analyst, Founder of Bersin ™ by Deloitte. Bersin is focusing on the global talent market and the challenges and trends impacting business workforces around the world. He studies the world of work, HR and leadership practices, and the broad talent technology market. He is often cited as one of the leading HR and workplace industry analysts in the world.
He founded Bersin & Associates in 2001 to provide research and advisory services focused on corporate learning. Over the next ten years, he expanded the company’s coverage to encompass HR, talent management, talent acquisition, and leadership and became a recognized expert in the talent market. He sold the company to Deloitte in 2012, when it became known as Bersin™ by Deloitte. He continues to serve as a senior advisor to Deloitte, advising large organizations and contributing to major research initiatives.