Changing work environments, technology, a global economy, and a shrinking workforce are factors that have pushed the human resources (HR) department to the forefront of corporate strategy in many companies. HR executives are increasingly asked to look ahead and project what things need to be in place to enable their company to compete effectively.
In 2014, human capital has been one of the largest investment areas for organizations, and ranks as a top priority by CEOs across multiple industries.
According to the 2014 Industry Trends in Human Resources Technology and Service Delivery Survey by Information Services Group (ISG), the leading area that HR organizations are focusing efforts on for the next two years is improving strategic alignment with the business. This is followed by talent acquisition and retention, driving business process improvements, and delivering cost reduction targets.
HR technologists and professionals estimate that HR technology will be an $8.1 billion dollar industry in 2015, a growth of nearly $2 billion since 2011.
HR Software Planning
Source: Human Capital Media Advisory Group
Demand for SaaS Growing
The ISG survey also found that demand for software-as-a-service HCM solutions is growing as Chief HR Officers look to transform their business models while ensuring a globally consistent user experience, scalable end-to-end processes, improved talent management, better decision making through workforce insight, and highly configurable solutions that are fast to deploy.
The top concerns about a SaaS model include security and data privacy and inability to customize.
Motivations for Moving to Cloud-Based Software Services
Source: Human Capital Media Advisory Group
Mobile and Social
Mobile, social, analytics, and integrated talent management are top priorities for HR technology investment. Research from CedarCrestone in 2014 predicted that mobile enabled processes will double this year.
Surprisingly, while nearly half of the U.S. population uses a smartphone, according to the 2014 HR technology survey by Human Capital Media Advisory Group, only 19 percent of companies are working on making their systems mobile-friendly. However, when asked what kind of HR software they plan to purchase in the upcoming year, mobile came in first among respondents.
Social media has become a vital part of HR business processes, especially in recruiting. As talented candidates seek opportunities via work and personal social networks, recruiters have to jump onboard to participate in social sourcing. While many companies already leverage automated job feeds on social networks to announce openings, some are now starting to look to social media to cultivate relationships with potential candidates.
With Apple’s recent release of the iWatch, Smartglasses from Google Glass, and various other companies jumping on the wearable technology wave, industry experts believe that this technology revolution will become integrated into the workplace in the future. Research firm Gartner forecasts that Google Glass and other “smartglasses” will help make employees more efficient, adding more than $1 billion per year to company profits by 2017.
Wearable technology could change how organizations collect and access information about their workforce. For example, manufacturing companies could use this technology to provide location-based information, and health-tracking devices could be used to identify fatigue levels.
An important development in HCM analytics is the introduction of predictive analytics, which helps organizations plan their future workforce needs for both the short and long-term.
Issues Driving HCM Analytics Investment
Source: Ventana Research Human Capital Analytics Benchmark Research
According to the Intuit 2020 report, approximately 40 percent of America’s workers will be contingent workers within six years. As more people work independently, businesses strive to have access to talent and skills while still having a flexible workforce. Industry experts say that one of the areas of growth in HR technology will be online platforms, where various types of workers can engage to collaborate. Independent worker management solution platforms that enable companies to design and develop their own talent pools of variously affiliated independent workers are also expected to become important.
As companies’ workforce compositions change to include a growing number of non-employees, finding a technology solution that enables them to engage and manage talent from a logistics and administrative standpoint becomes important. Of particular interest is the Freelancer Management Solution (FMS) model as it creates a space where companies, suppliers, and independent workers can engage and establish different types of work arrangements.
These online platforms are the next generation of contingent workforce technology. They serve to give companies direct access to the growing population of talent that wants to work independently, and the ability to engage and procure the services of these workers faster and more efficiently with reduced costs and time to hire.