The HR technology market is undergoing one of the most disruptive years it has seen this decade. A recent report titled, ‘HR Technology Disruptions for 2017: Nine Trends Reinventing the HR Software Market’, released by Bersin by Deloitte revealed how the rapidly advancing paradigm of HR technology is changing the way organisations work.
Sharing one of the biggest disruptions of the year, Josh Bersin, principal, Bersin by Deloitte, said that the entire marketplace is shifting from tools that automate traditional HR practices to platforms and apps that improve life at work. It is this shift in the approach to HR technology that shapes the major trends for the coming times. Here are the nine trends that organisations, HR professionals and HR technology providers need to watch out for:
1. The accelerating revolution of performance management
The present day organisations are highly networked. Employees work in teams, while projects and goals change quite frequently. Therefore, leading companies are now reinventing the way they manage and measure performance. From a traditional approach of developing aligned goals from the top down, conducting annual performance reviews on those goals and ranking and rating people based on that performance, organisations are now creating a more agile approach. The new model is built around periodic check-ins; shared goals developed from the bottom up, and transparent to the entire team; regular developmental conversations; and feedback that goes from employee to employee, employee to manager, and manager to employee.
Owing to the shift in performance management requirements of the organisations and employees, the old forms-based performance and goal-management tools now seem archaic and unproductive. Some of the new tools look like games; some resemble personality assessments; and others look like online check-in systems.
2. An explosion in real-time engagement evaluation
The second big shift in talent and people management is the explosive growth in always-on, pulse-based survey and feedback systems. While we don’t see this going away overnight, more and more companies now realise that this type of annual survey is of limited use; the real action takes place on a real-time, local level. Some companies now survey employees quarterly, others monthly or weekly. These new systems are useful for much more than just ‘people issues’. They also create opportunities for business-process improvement.
Designed differently from the start, these new feedback products are unlike traditional surveys. Not only can they support mobile pulse surveys, but as ‘smart’ systems, they can also algorithmically decide who to survey and when.
3. The explosion of growth in people analytics
Over the last few years, companies have moved from back-office HR data warehouses to advanced analytics and reporting dashboards to predictive models and more. The idea of creating predictive models is becoming more widespread within HR. In fact, the percentage of companies doing predictive modelling has almost doubled over the past three years. It has now become commonplace for companies to build predictive models for retention (specifically, using data to try to understand precisely why some high-performing people leave).
As analytics models become more prevalent, companies are slowly moving away from building their own solutions to buying them from vendors. Bersin says, “For companies shopping for core HR software (ERPs or talent management platforms), I think it’s important to look at the vendor’s level of investment in and experience with analytics tools and models.”
4. The continuing explosion and evolution of the learning market
The corporate learning marketplace is ready for a revolution. Millennials say that their ability to learn on the job is their top driver when looking for a new position. There has been a huge shift in learning content. Since 2009, only seven years ago, companies have shifted from 77 per cent instructor-led training (ILT) to only 32 per cent. The use of collaborative learning, virtual learning, apprenticeship, and on-the-job learning has exploded. People at work simply don’t have the time, budget, or patience to sit in classes the way they did a few years ago. Keeping that in mind, corporate training buyers are now allocating budgets for tools to integrate, consolidate, measure, and curate various types of content for employees.
If companies want to build a truly compelling, self-directed learning experience at work, they should think way beyond the realm of the corporate LMS. They have to imagine a set of tools, information, support systems, and self-authored content (often in video) that anybody can find as needed.
5. A new landscape for talent acquisition
Today’s recruitment and talent acquisition market is enormous and it is also highly strategic for many companies. Fast-growing technology companies, for example, can make or break their business plans based on how quickly they can find the right engineers, marketing and sales people. In addition, today, a company’s employment brand is available for all to see. Today, a new breed of platforms have simply started from scratch, building end-to-end recruitment management systems that handle everything from sourcing, ad management, analytics, online interviewing, interview management, candidate scoring, ongoing candidate relationship management, and onboarding.
These new tools are designed to directly connect to LinkedIn and other job boards, and they can store candidates’ information to be revisited year after year. These systems no longer simply manage applicants; they manage candidates and even alumni. Further, these new offerings focus on building tools that are easy for hiring managers and candidates to use, not just recruiters and HR. The continued evolution of job boards is another factor disrupting this complex market.
6. Growth in contingent workforce management
The area of contingent workforce management is also growing rapidly this year. This market, which includes software for vendor management (VMSs), as well as time tracking and scheduling systems, is highly fragmented with only a few large market leaders. As the percentage of employees who work part-time or on a contingent basis goes up, the growth in this market is expected to continue. The second market is the growth of gig work networks: that is, vendors who try to match workers to ‘gigs’ or projects.
7. The growth of team management tools and their merger with HR tools
There is a wide variety of software tools designed to help people collaborate, share and set goals, and work together as teams. While they may not necessarily come under HR technology tools, most are starting to enter the HR technology market. The biggest trend in the HR software market is the steady shift away from devices that facilitate HR to take up tools that help employees and managers do their jobs.
This trend is accelerating, enabling almost every HR-centric tool to be integrated with or used in conjunction with other tools employees already use to get things done. As the work world shifts away from hierarchical organisations toward using networks of teams, this trend is only likely to speed up.
8. The explosion of wellness and fitness apps
The next major area of disruption expected in 2017 is the accelerated growth of tools, systems and platform features to manage wellness, work-life balance, employee activity, and ultimately, personal performance. As the work environment becomes more complex and overwhelming, companies are realising that they should provide services to help employees manage their workloads. These typically include programmes, such as mindfulness, yoga, time management, work-life balance counselling, dietary support and exercise.
All these services have moved from the original goal of safeguarding employees’ health to providing benefits and programmes that can increase human performance; improve employee engagement; and ultimately bring people together to create a stronger culture, build leadership, and improve the performance of the entire organisation.
9. Digital HR: Self-service, artificial intelligence, and robotic process automation
The final disruptive trend is the fast-growing area of artificial intelligence, natural language processing and robotic process automation. This huge area of technology — which covers products that can listen to our voices, products that augment and automate call centre work and software that brings transactions together from many systems and makes it easy to implement the new workflow on a screen or device —is now coming to HR. The result of these technologies, including the obvious software development tools for mobile devices, is that most HR transactions and processes can now be automated. The tools of AI, robotic process automation, and self-service transaction integration can enable a total redesign of the employee experience, dramatically reducing costs and improving the value of HR itself.
Almost every existing HR technology market will face disruption in 2017. Growth in mobile computing, video sensors, and artificial intelligence is taking place simultaneously with a new intense focus on employee engagement, culture, wellness and productivity. These colliding forces are enabling a new breed of vendors that will totally rethink what HR technology does, creating exciting opportunities and disruption in the existing markets.