Thought Leadership: Forward and Upward: HR Technology in 2017
Even though the fast-paced HR tech landscape is creating a dynamic market, as we step into 2017, every existing HR technology market will be poised for disruption.
The use of technology is no longer the domain of IT functions alone. It’s become an integral part of many different functions in large global businesses. This is true of HR as well, where the use of technology and its effects on a company’s workforce is a major area of focus for C-suite executives today.
Research consistently indicates that business leaders plan to increase their investment in HRIT and HR analytics. Firms that use analytics effectively already benefit from over 12% better talent outcomes. Further, HR technology has emerged as a strong magnet for investors in recent years. Funding and deal activity has increased rapidly, with the industry touching new heights in 2015-16. In both years combined, HR technology startups have received $4.36 billion in funding across 733 deals globally (till 27th October, 2016). In India itself, there was a funding of $65 million across 47 deals in 2015 and 2016.
These are positive trends and Josh Bersin says the HR tech market is undergoing one of the most disruptive years it has seen this decade. In fact, in an article in Forbes magazine he’s said the HR technology industry is on the precipice of a total reinvention. With major trends and players driving this change, we can all look forward to exciting times ahead.
Evolving needs and solutions
The fast-paced HR tech landscape has created an equally dynamic market that fosters a regular stream of challenges and pressures on players. There are solutions that understand the science behind matching the right person to the right job, through data science and artificial intelligence. Talent transformation solutions (including re-skilling, up-skilling, understanding learning paths for career progression) have become the cornerstone for many large scale transformation journeys in organizations. Understanding personality traits and culture fitment are also areas of active research.
Much of the evolution we are witnessing today is driven by major shifts in business focus. Not too long ago, we saw companies focused on automating and integrating their talent practices. Today, the areas of concern have shifted – and employee engagement, teamwork, innovation, and collaboration are the demands from business.
They seek HR tech solutions that are useful, user-friendly, and productivity-oriented. Simply stated, the real focus now is on reinventing how people work; creating team-based tools for goal alignment and coaching; systems providing constant feedback and measuring engagement; and rethinking the way we measure performance, manage careers, and enable individual growth and learning.
Here is a list of things which HR Technology buyers are focusing upon
Changing the status quo
We are all big admirers of Google’s relentless focus on innovation and legendary success story. And almost everyone has heard of Google’s free food, 20% time, and wide range of fun activities – but we may not realize that each of these was implemented and maintained by data. Google’s success has been attributed in large part to the fact that it is the world’s only data-driven HR function. This approach has resulted in Google producing amazing workforce productivity results that few can match (on average, each employee generates nearly $1 million in revenue and $200,000 in profit each year).
This is every HR leader’s dream and today we are seeing a new set of entrants who are challenging the status quo. These companies are different from their predecessors in HR technology, in that they are founded by fresh-eyed engineers and non-HR practitioners approaching technologies and processes from a consumer perspective.
They are pushing boundaries, building user interfaces that deliver a consumer-like experience, and including mobile and social capabilities. Cloud technology is creating massive economies of scale for HR customers at the same time, reducing IT resource involvement. Further, there is real-time workforce visibility and flexibility allowing organizations to respond to changing market conditions better and faster. It’s just a matter of time before Zero-UI is consumerized and we’ll be playing with intelligence like they were lego blocks creating various patterns and combinations of a workforce. This will enable quick decision making based on real-time impact data.
Data shows organizations are upgrading to these new capabilities, too. While many incumbent companies appear to be missing this wave, and may have lost sight of the needs and pressures of their customers, fresh, new customer-engineered technologies are advancing the human resources industry with innovative products and solutions.
AI’s coming of age
Another disruptive trend that we will experience in the near future is the fast-growing area of artificial intelligence, natural language processing, and robotic process automation. These tools can enable a total redesign of the employee experience, dramatically reducing costs, augmenting efficiencies, and improving the value of HR itself.
As we get ready to step into 2017, every existing HR technology market seems poised for disruption. Growth in cloud, mobile computing, video capabilities, and artificial intelligence is taking place simultaneously with a new intense focus on employee engagement, culture, wellness and productivity. These colliding forces will enable a new breed of startups and vendors that will reimagine what HR technology does and creating exciting opportunities and disruption in the existing markets.
About the author
Arjun Pratap is the founder and CEO of HR Tech start-up, EdGE Networks. EdGE provides nextgen solutions for talent acquisition and workforce management by harnessing artificial intelligence and data science.