What are the 3 big HR technology disruptions for 2018?

The world of HR technology is innovative, exciting, and employee-focused

The world of HR technology is innovative, exciting, and employee-focused, according to Josh Bersin, who observes that the market is in a major cycle of innovation

I’ve recently had the opportunity to attend three of the world’s largest HR technology conferences, and let me just say: things are changing faster than ever. Nearly every HR technology vendor is now offering “machine learning,” “AI,” or some form of chatbot in their products. Companies that sell content (ie. training providers) now offer micro-learning, recommendation-based learning, and intelligent learning platforms. And the recruitment market has more new vendors than I have ever seen in my career.

Why all the change? As I describe in our report HR Technology Disruptions for 2018, there are three big things going on.

  • First, the HR technology market is flush with investment capital. Venture capital and investors have put almost US$2 billion into the market in the past two years, so there are hundreds of startups building new tools.
  • Second, many cloud-based HR technology vendors, while highly successful, have not been able to keep up effectively with the radical changes in organisations and management. Companies now want continuous performance management tools, open feedback systems, tools to manage well-being and engagement, and analytics tools to measure how we work in teams. In fact the whole theme of “team management” is really the core of the new vendors today, and most of these innovative systems are coming from start-ups, not the ERP providers.
  • Third, there is a radical new set of tools now available that fall into the category of what I call “intelligent systems.” These are software products that are able to intelligently coach leaders, assess candidates, source the right people, recommend learning, and even detect fraud, stress, or problems in the organisation itself. These new tools can offer significant benefits, far above the more traditional top-down assessment or analysis tools used in the past.

“The whole theme of “team management” is really the core of the new vendors today, and most of these innovative systems are coming from start-ups, not the ERP providers”

One vendor, for example, has a system that queries the people you regularly communicate with, asks them questions about how you could perform better, and gives you positive coaching advice. A client that used this tool found that their entire management team improved its competencies by 11 per cent when measured against the company’s 8-category leadership model.

Another vendor has an AI tool that can read documentation, identify the “learning” and “micro-learning” embedded in the language, and build a small quiz automatically. Imagine running this software against all your documentation, policy manuals, and safety procedures! It’s an instant “micro-learning” development system.

A third vendor has a proven AI-based system to analyse video interviews. This tool can capture up to 1 million data elements in a 12-minute interview (including answers, language, tone of voice, micro-expressions, or mood) and is now able to assess candidates against high performers to predict who is likely to succeed. (And yes, it is designed to eliminate gender, age, and racial bias.)

The next generation of HR technology solutions
I could go on and on. What all these new systems have in common is that they’re smart, they offer immediate value, and they are moving beyond “systems of record” to a new category I call “systems of productivity.” Most employees today are overwhelmed with messages, meetings, and tools – so we need a new breed of HR technology that doesn’t just implement HR practices, it actually helps people get their work done. These are the types of intelligent tools people are going to be buying in the coming years, and they will complement and add value around the core HCM systems we deploy.

While most of us spent the past five years replacing legacy HR technology with newer cloud-based systems, all of a sudden the market is flooded with innovative new tools – so organisations are buying more than ever before. The new Sierra-Cedar study of HR technology shows that the average large company now has almost 7 HR systems of record (up from about 4.5 last year), showing a proliferation of new tools. This means a new architecture – one which includes cloud HCM, a number of new talent and team-productivity apps, new tools for feedback, wellness, and performance, and exciting intelligent apps to help with sourcing, selection, assessment, and employee communication.

“We need a new breed of HR technology that doesn’t just implement HR practices, it actually helps people get their work done”

Nobody ever said the HR technology market would be simple. Today it has become like a candy store again, and it’s an exciting time to find new technologies that truly make people more productive, engaged, and collaborative at work.

5 key HR technology considerations
There are five key considerations for HR professionals in looking at how to make the most of HR technology in light of this:

  1. Don’t assume that your core HCM vendor will have all you need any more. A variety of well proven team, performance, and next generation talent management tools is now here – they work, they are easy to use, and they can connect to your core system.
  2. If you haven’t moved to the cloud yet, you should likely put that as your top priority. Most of the exciting new technologies in HR require a core cloud system of record. While only about 45 per cent of companies have moved to the cloud, the trend is clear – it can help simplify your life and offer you a far more integrated core system.
  3. Don’t assume that all your systems will go away. In today’s innovative world where new management techniques, well-being, and diversity are now key, we need a new set of technologies – look for vendors who have lots of proven customers, but don’t be afraid to experiment – it may pay off.
  4. Larger vendors are often slower to adapt than small vendors, so while we all want standard systems, feel free to shop around for new tools. Most of these new companies are well funded and have dozens or hundreds of successful customers. Test them with users to see how well they like the interface, and if they work for your employees you will likely be successful.
  5. Develop a data architecture to keep everything organised. Your payroll, core HR, talent, recruiting, performance, and feedback tools will all create data. Before too long you’ll want to integrate all this data together, so have someone from IT help you build a data dictionary so you know where all the data is and you can develop analytics that really analyse what’s going on.

The world of HR technology is innovative, exciting, and employee-focused – as companies shift their focus to teams, engagement, wellbeing, and empowerment, new technologies are available, so start looking around – the market is in a major cycle of innovation, and your employees will be thrilled.

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