Developments in HR Technology in 2019
A few days ago Josh Bersin released the much-awaited report on “HR Technology Market 2019.” [Download Report] This report includes comprehensive coverage on trends and developments in the HR Tech landscape. Technology is advancing at an unprecedented rate urging HR Professionals to keep pace with it to gain competitive advantage.
Moving in the Cloud environment is facilitating the rapid development of tools for vendors. Due to advancements in AI and ML, HR Technology is going through automation evolutions. This has enabled HR Tech offerings to add capabilities like Robotic Process Automation, Chatbot, Conversational User Interface (Voice/Text), AI-based suggestions, tips, hints, and nudges.
According to the report, there are three ‘vectors of change.’ First, enhancements in the technology considering Moor’s Law. Second, the availability of API's to bring HR Technology in the ‘flow of work’ while using Microsoft Teams, Slack, and other similar apps. And third, security, transparency of employee data which requires ethical considerations.
In 2018 Josh covered 10 topics, this year the report covers 11 trends. There is an addendum to the report classifying HR Technology based on vendor offerings. Let us look at the trends in detail.
1. Evolution of Core HR Platforms from Systems of Engagement to Systems of Productivity:
Josh explains that ‘Core HR Platforms’ constitute a significant part of the HR Tech Stack. It includes Cloud-based HRMS, Payroll and Employee Management Systems. They are suitable for HR users, however, there is an opportunity for improvement to become Useful, Productive, and Engaging to all the Employees. Hence, companies are implementing ‘Employee Experience Platforms’ (EEP) as an additional layer on top of the ‘Core HR’ systems to facilitate ease-of-use. It creates ‘moments that matter’ to enhance user adoption and employee experience.
This year Workplace Technology vendors (Microsoft, Google, Slack, Atlassian, and Facebook) are all getting into HR. Since employees spend most of their time using these Workplace technology tools, vendors are putting HR tools into these systems. An amalgamation between ‘HR Technology’ and ‘Workplace Technology’ to initiate ‘HR in the flow of work.’
2. Changes in the HR Technology structure:
Earlier we had a simple HR Tech Stack, wherein many ‘Talent Management Tools’ were implemented around ‘Core HR Systems.’ According to the report, the first change will result in ‘Core HR Systems’ offering these ‘Talent Management Tools’ with basic features.
New Employee Experience Tools are emerging with capabilities like Chat, Conversation, Mobile, and Integration with Systems of Productivity. There are many start-ups coming up with these new innovative and AI-based tools with advanced features. Now companies are buying ‘Core HR Systems’ and on top implement these innovative tools for creating robust HR Solutions.
3. Innovation and AI in the Talent Management Market:
As discussed above new breed of Talent Management Tools are emerging in the HR Tech market with innovative, and AI-based advanced features. Using AI they are improving the area of Recruitment, Learning, Performance Management, Rewards & Recognition, Wellbeing, and Work Management.
For example, they help in creating unbiased job descriptions. To improve hiring these AI-based tools help in finding, screening, and shortlisting candidates. They also schedule and conduct Video Interviews to analyze language and facial expressions. Now we can use AI-based Assessments and games for evaluating capabilities and skills.
To initiate Training Needs Analysis they can analyze functional and technical capabilities by scanning emails and other documents. And further, recommend suitable courses, and assist during course by giving coaching tips and insights.
Bots also provide coaching tips and nudges to managers based on insights gained from engagement surveys, behavioral cues, and real-time feedback. Given these technology trends, Josh suggests having a team of HR-IT experts in our department.
4. The emerging Employee Experience Platforms:
In the employee journey from recruitment as a candidate to ex-employee as alumni, designing compelling employee experiences is gaining traction to create ‘the moments that matter.’ Now we are moving towards buying platforms that can automate and simplify employee experiences. HR Technology is witnessing a paradigm shift in thinking from processes and transactions to experiences and moments that matter.
Josh says that all HCM vendors now offer open platforms (open APIs), and it is up to the customer to add this new kind of middleware that is emerging to create compelling employee experience. He further says that the biggest trend in this area is Automation, Voice Interaction, and using Chat and other Cognitive Technologies.
5. Employee Listening, Engagement, and Culture Tools:
According to the report we are moving towards Employee Engagement 3.0. Now we are considering several sources for gathering employee feedback. Companies are using sensing and AI Technology to monitor internal communication channels. There are various ONA and Continuous Listening tools for real-time monitoring. And technologies are evolving to integrate and analyze all the data points to provide tips, recommendations, and nudges for behavioral change that improves employee engagement.
Josh suggests taking a holistic look at the enterprise feedback architecture to bring together all the sources for getting an integrated picture. He also suggests including data relating to wellbeing and productivity. The report further advocates thinking about our survey and engagement strategy as a multi-year journey into employee listening to move in the right direction. Josh concludes that these tools are turning into intelligent real-time data collection systems. He expects that ultimately they will move into the flow of work.
6. AI-based tools in Recruitment:
There is tremendous growth in Recruitment offerings since vendors are now using AI-based tools to leverage data, intelligent algorithms, and social sensing tools for effective hiring. Application Tracking Systems are becoming smarter due to advancements in AI and availability of the vast amount of data.
The emerging Job Board companies that aggregate, analyze, and support job seekers are now offering advanced analytics tools in addition to the job posting, company pages, and other services. There is significant growth in the websites and tools for company ratings and professional networking since these vendors are crowdsourcing compensation data as well.
AI-based sourcing tools which now provide Video Interviews and gamified testing are helping companies to find hard-to-locate external as well as internal candidates. And the emerging AI and neurological assessments are improving the accuracy of talent evaluation.
7. The arrival of Contingent and Gig Workers:
The alternative work arrangements are gaining traction in the form of a contract worker, part-time worker, gig worker, and contingent worker.
From the HR Technology standpoint, there is an opportunity to provide a vendor management system, a contingent work system, and gig work platform. There are few vendors, however, according to the report soon we will have robust solution providers in this category.
As per research cited by Josh, gig or contract workers are a significant part of the workforce. However, few HR Professionals believe their companies are ready to manage them well. He expects to see enormous growth in tools that will help us to easily manage these gig workers.
8. Developments in Performance Management:
There is a big shift from Annual to continuous performance management and the same is reflecting in the tools offered by vendors. Big HCM vendors are now offering similar solutions, however, Josh says that the new players are coming up with innovative and advanced features.
Comparatively, it is easier for smaller organizations to implement these tools in their Core HR Systems, however, the large companies are trying to figure this out. He recommends that companies must do a strategy workshop first and then think about vendor selection. Discuss and clarify performance management philosophy, especially: check-ins cadence, transparency, goal alignment, coaching & development, and the evaluation process. This exercise will result in coming out with philosophical decisions that we can use for the vendor selection process.
According to the report, every company that implements continuous process has positive results because these tools provide better data, insights, and transparency into their entire talent process. There is consolidation taking place in this segment bringing together recognition, rewards, and feedback. And few vendors are now offering advanced analytics and development planning systems.
9. Innovations in Learning Technology Market:
Developing skills and capabilities have always been leadership concerns for the effective implementation of organizational strategy. Hence Learning Technology is becoming a top priority for HR leaders. Josh coined this term ‘Learning in the flow of work, which he thinks is the future of Learning. He says that LMS is not the center of learning and now it is running in the background giving employees a plethora of choices and a new range of systems.
The report classifies Learning Tech Market in the following eight segments.
- Learning Experience Platforms,
- Program Delivery Platforms,
- Micro-learning Platforms,
- Assessment, VR, and Virtual Learning,
- Content Libraries,
- Digital Adoption and Workflow Learning Tools,
- LMS and Content Platforms, and
- Learning Record Store.
There are new tools which now allow users to push content to employees in a prescriptive and activity driven way. Then there are systems that enable vital functionality for real-time practice that offers value. Some systems have AI-based chatbots with tremendous potential for learning. In the latest developments, a vendor now offers context-specific learning by directly taking cues from email traffic and communication patterns. In addition to all these technology offerings, Josh suggests that companies should consider their own ‘Training Institute’ to develop internal talent which is a trend in many large organizations.
10. Growth in Health and Wellbeing:
Josh explains that companies are now considering Health and Wellbeing initiatives as part of Performance Improvement Strategy. The focus is shifting from Health and Fitness towards Employee Engagement, Productivity, and Performance. Areas covered by vendors include Physical Wellbeing, Mindfulness and Stress Management, Financial Wellbeing, Family Wellbeing, and Social Wellbeing. They offer a full range of services to help employees stay fit, rested, focused, and healthy.
Financial Wellbeing vendors provide education, coaching, individual assessment, and advisory support. For Mindfulness and Stress Management they offer App-based coaching, training, event management, and meditation support among other services. There are AI-based tools that give us tips and nudges to improve productivity at work.
All the big Core HR Systems now offer various options for employee wellbeing ensuring vitality at work. Similarly, there are numerous small vendors providing specialized services. However, the tricky part is the confidentiality of data which demands transparency. Especially what type of data being collected and how we are planning to use it.
11. Augmented Analytics, AI, ONA, and Feedback Systems:
The technological advances are making it easier than ever before to use People Analytics. Hence the increasing number of HR Professionals are implementing it for strategic decision-making.
Vendors now provide more or less ready to use applications called ‘Augmented Analytics’ with capabilities for easier data collection and analysis. It provides AI-based ‘stories’ constructed from data automatically by software. They ameliorate the burden involved in the process by automatically analyzing systems data and identify trends, changes, and odd cases. Then they convey their insights through Conversational User Interface, even on the problems we missed to consider.
AI is also changing the way we interact with systems. Josh suggests that the Conversational User Interface is the next big thing in HR Technology. There are a countless number of vendors in this category. (Please read my earlier article on CUI-Chatbots.)
Organizational Network Analysis – ONA help companies to create a database of communication patterns in real-time. Few big companies have their own proprietary technology. There are several other small vendors which provide this capability with ready to use tools. We can use insights gained through ONA in many HR processes like Organization Design, Performance, Retention, and other talent decisions. Josh suggests that we can use ONA along with AI to get a smarter analysis of data. It can also provide nudges to our employees helping them to improve at work.
There are five suggestions in this report for vendor selection. First, the product or system must appeal to the users, in short ease of use. And the pilot test may help in this case. Second, immediate and effective after-sales support as and when required. Third, the vendor must have 3 to 5 customers similar to our organization which can provide their insights. Fourth, the vendor should assign a Product Manager with deep expertise in the HR domain, who will understand our issues and concerns. And Fifth, the vendor must have long-term viability with strengths like reliable Leadership Team, Customer intimacy, Financial backup, Profitability, and Strong Company Culture.
Theoretically, the report is awesome, however, it will be interesting to see how many of these tools will practically help HR Professionals to succeed in 2019.
In conclusion, Josh Bersin says,
“we are in one of the most exciting and transformational times in HR technology. We have shifted well beyond systems of record and systems of engagement to an era in which HR systems are truly systems of productivity.”