The HR Software Market is entering one of the most disruptive years it has seen in more than a decade. Companies now understand its newfound potential for investment, innovation and change: according to CB Insights study, investors already poured $2.4 billion into HR tech in 2015, a 60% increase from 2014 – and this number is increasing as we speak. Emanating from this technological change is the apparent change of the core of HR that has operated in the past 20 years. This October, Bersin by Deloitte published a study in which it exposed these new tools and trends that will disrupt the way HR tech has been done until now and revolutionize the world of HR altogether.
While the 1980s saw a more traditional approach, focused on creating a system that met needs of recording, tracking employees on balance sheet, and creating a reliable payroll processing, the 1990s and 2000s have brought forward the need to create not only client/server HR softwares, but also to use HR technology in the fight for top talent. More recently, people analytics, mobile platforms and PaaS (Platform as a Service) have taken over the field with their advantage of having been created as a people oriented service.
This shift to people-oriented HR politics ultimately means that companies will have to change the way they manage people. Indeed, the emphasis shouldn’t be on automation and integration of talent into the company, but rather about how we can tap into that talent through employee engagement, teamwork innovation and collaboration. In order to reach that objective, new tools are needed to gauge the success of beta tools, revolutionize the learning environment for employees and deal with employee performance.
How can we assess these performance tools you ask? Thanks to the knowledge of this preventive study as well as a few tips on how to apprehend these disruptions, your company can be ready for the upcoming HR revolution of 2017.
1. Accelerating revolution of performance management
As managers are currently realizing, the old performance management based on yearly performance reviews is no longer working, not only because it is based on goals which do not reflect an employee’s performance well, but also because of the rise of the importance of employee engagement. A new study by MIT shows that a digital organization ought to be people-oriented, offering clients and employees more space to be involved with and even to create the way we attribute employee ratings These new tools should be easily accessible, ideally integrated into the company and meet certain requirements, including performance by team rather than by hierarchy, the idea that people can be part of more than one team,, a simplified process for communicating, transparent and easily adaptable goals, development plans that are easy to build and based on a template and the creation of a user-friendly system such as a mobile app.
2. The development of real-time management
Today, 120 vendors are providing pulse survey tools, systems to monitor employees, and in a variety of ways are integrating appreciation of the company culture and engagement into their processes. These types of feedback tools are particularly important in a world that is shifting towards the concept of well-being for more production. In an area that was historically run by psychologists, these new tools have to be seen as much more than just dealing with people issues, because what they’re in fact doing is creating business opportunities for business process improvement.
3. The explosion of growth in people analytics
Another important shift concerns place: companies are moving from back-office HR Data services to advanced analytics, from reporting dashboards to predictive models. These disruptive changes are becoming more and more widespread in HR departments, who use them for crucial issues such as talent retention. As analytics are growing, predictive models involve the correlation of HR data with that of sales, operations and finances.
Finally, the general– and justified – concern of many companies comes with the lack of talent data present on the market. Nevertheless, 2017 heralds the arrival of a new generation of millennials on the market, of whom more and more are able to use these technologies.
4. The continuing evolution of the learning market
The drivers of change, such as the rising income inequality since 2008 as well as the faster rate of work means you need to learn at work more quickly than ever before. Learning itself has been redefined in the last few years, moving towards a more online and interactive approach where the difficulty for learning companies lies in creating the best integrated experience. Among all changes, 4 disruptive trends are making the biggest impact: learning experience platforms, LMS for video, cognitive learning tools, recommendation systems and micro-learning platforms, which allow for learning to be embedded into the business processes through design thinking.
Of course there are ways to benefit from these trends, one is the inclusion of what one might call the 4 Es of learning technology: Education, Exposure, Experience, and Environment. The new challenge of learning technologies will be to successfully integrate all of them into the new and existent learning applications and software.
5. A new landscape for talent acquisition
Talent acquisition is a market where over $240 billion are spent each year in the US alone. From finding people to performing different types of background checks personality tests, there are many attributes to this market which make it one of the foremost of HR technology changes. If talent acquisition is changing, this is also because of the transparency of brands and the growth of professional social media like LinkedIn, which lead users to search for people with the personalities that fit company culture.
6. The spread of contingent workforce management, gig work and part-time work environments
In the US, it has been estimated that 40% of workers are contingent. The emerging market of management systems to organize this growing workforce, especially in the real estate and local work sectors, is expanding. Yet again, the work ethic and recruitment system is changing and bucking old trends to make place for a new ways of organizing management.
7. The multiplication of team management tools, and their merger with HR tools
Team management has, as one has seen, been turned on its head. Employees take up a bigger place on the team and as a consequence, more and more tools are built to help people communicate and work together as a team. As such, the biggest trend taking place is the steady shift away from tools to help HR, towards tools that help employees and managers.
8. The surge of wellness and fitness apps – and their potential link to employee engagement
The accelerated growth of tools, systems, and platform features to manage wellness, work-life balance, employee activity, and personal performance is now a priority in the HR world. As companies are realizing they should provide services for employees to manage their workloads, we are seeing a two worlds come together. The next generation of performance management will also have to include categories such as daily productivity, micro-learning, wellness or even motivation.
9. Digital HR: self-service, artificial intelligence and robotic process automation
The final, groundbreaking trend is the automation of HR transactions and processes. This can help HR by relieving it of some of the main time-taking functions, such onboarding, employee career and job transitions, exploration of retirement options and decision making about retirement plans, assessment of leadership potential, development and education.
As almost every HR technology market will face a major disruption in 2017, it is the time for new vendors to totally rethink what HR technology does. This will create exciting opportunities and disruptions in the existing technologies.