In 2013, big data and social media helped to shift the landscape of HR technology by creating new challenges and opportunities for organizations in managing their blended workforces. This year, with global economic growth creating a new level of competition for talent, HR organizations are transferring their focus from cost reduction to retention and engagement.
“2013 was a big year for HR technology. When you consider such realities as companies still trying to fully understand how to best leverage workforce analytics, the continued use of HR in the cloud, and a growing popularity of Social Media HR practices, 2014 is looking to be a pivotal year in the industry.” ~Lynne Mealy, President of The International Association for Human Resource Management (IHRIM)
Buy Rather Than Build!
Many of the large enterprise software providers, including Salesforce.com, have spent the last two years acquiring midsize and startup providers of HR software tools in the marketplace. This tech-buying spree is driven by a desire to offer a full suite that caters to every HR software need, from recruiting to performance management to payroll.
Particularly sought after are startups with “one-trick” technology point solutions that focus on recruiting and talent management.
“Buying is still viewed as more expeditious than building. So if a startup has an interesting product, good code and a handful of clients, they could be a target for acquisition this year.” ~Katherine Jones, Analyst with Bersin by Deloitte
In 2014, hot targets for purchase will be gamification vendors that offer inventive ways to apply rewards and promote competition within an organization. Companies offering payroll options are expected to add finance-focused features, such as payment cards that act as ID cards, as this is a natural extension of the general business model.
Another sub-trend is going to be the focus on integration. With all these acquisitions, vendors will now face the difficult task of integrating all these offerings into a single, seamless solution. Integrated and consolidated suite solutions will increase operability of systems, databases and tools, and also serve to integrate information and processes throughout the entire HR organization.
HR System Upgrades
A survey by Towers Watson & Co. in 2013 showed that 29 percent of companies plan to adopt a new HR software system in 2014. And of these, 25 percent will only consider a software-as-a-service (SaaS) product.
Another key factor in the software decision is the level of simplicity. HR departments are pacing a higher focus on simplification and easy user adaption. Part of this simplification focuses on improved user interfaces, and the drive to mirror the user experience of popular sites such as Amazon or Google. The goal for 2014 is not to just implement new technology, but to also make it simple and easy to use.
Everyone has been talking about big data, but many companies are confused as to what it means or what to do with it. Last year, the HR industry spent a great deal of time evaluating the benefits that workforce intelligence could bring to companies when used to their best advantage. According to Gartner research, business intelligence and analytics are expected to become the top focus for CIOs until 2017.
Bersin by Deloitte says that more than 60 percent of companies are investing in big data and analytics to make their HR departments more data-driven. According to Bersin, companies using data to their full potential are twice as likely to deliver high impact recruiting solutions, widen their leadership pipeline, and improve their financial performance.
“Once you sort through the heaps of data and find what’s relevant, leadership and HR can see what’s going on throughout the organization and make more informed decisions. This shift towards data-driven decision-making is what can separate a good HR department from a great HR department.” ~Pat Greer, Academic Director of the Strategic Human Resource Management Program at University College, University of Denver
HR departments are increasingly looking for technology to help them spot trends and patterns in their data, so that they can better understand the impact of their HR approaches and use this intelligence to make strategic talent decisions.
An increasing number of vendors are recognizing this need, and are developing tools and systems to make analytics easier for companies. Their goal is to provide HR users with solutions that are more than a data dump, that include user-friendly analytic tools which show data in easy-to-understand graphical format to provide workforce insights. Many HR vendors are starting to compile benchmark data from the mass volume of customer information they manage, so that they can deliver information that employers can examine and evaluate their own data against.
With the emphasis on big data and workforce intelligence, predictive analytics will emerge as one of the must-have technologies in 2014.
The concept of SoMoClo, initiated by the Aberdeen Group, is a union of three technological trends that provide new opportunities for companies: Social + Mobile + Cloud.
Many talent management solutions added collaboration features in recent years in response to demand for social media in all areas of business. HR departments, in particular, are asking for more social media in their business practices. A study by WANTED Analytics in September 2013 found a 43 percent year-over-year increase in demand for HR professionals with social media skills and experience.
According to Josh Bersin of Bersin by Deloitte, HR departments have been dealing with social software tools as add-ons to HR technologies, but now want social systems that open employee communication, incorporate candidate relationship management, create talent networks, and more.
Mobile & Device-Independence
“Mobile-enabled HR process adoption jumped 67 percent since 2012, with the biggest uses coming in payroll, recruiting, performance management, and learning and development processes.” ~2013-2014 CedarCrestone HR Systems Survey
In years past, mobile has always been an extra feature. This year though, developers are designing with mobile in mind by choosing interfaces and functionality that is specific to a mobile environment. Industry vendors are embedding mobile capabilities in their core solution, rather than offering them as separate applications.
With a large majority of the workforce using mobile devices, companies face the challenge of providing access to HR information in the same seamless user experience across every device. It goes beyond responsive design to understanding what functions users need to do when they access HR systems via tablet, smartphone, terminal, or PC, and designing the user experience to simplify that.
New devices are continuously entering the market and ‘bring your own device’ (BYOD) is becoming more popular in many companies. HR departments that offer self-service functionality are looking for solutions that can easily be deployed to any device.
Back in 2012, Paul Hamerman, VP and Principal Analyst at Forrester Research, said that cloud had already become a pre-requisite for companies choosing HR software.
While the benefits of cloud computing have been discussed at length, many cloud solutions have only focused on a single application or function. In 2014, as vendors build their HCM suites, having all of it, not just pieces, available on the cloud, will be a key focus.