“The HR technology market is undergoing one of the most disruptive years it has seen in this decade..[it is] on the precipice of a total reinvention.”
– Josh Bersin (1)
Integrated Human Resource Management Systems (HRMS) are here, and it’s an exciting time to be in HR. These new platforms draw data from a number of different interrelated sources in real-time in order to contextualise the decisions that HR are making. Software as a Service (SaaS) Systems have been adopted by innovative large organizations, who have recognised that HR needs to come out of the shadows. Employee engagement, development and retention are vital, especially now when the most sought after skills are fought over more fiercely. As HRMSs become increasingly normalised, we are observing their expansion into the mid-market, opening the gates to a larger base.
With the increase in accessibility to HR technology in mind, the market is bustling with excitement. One metric that conveys this is the 60% increase in HR technology investment by the industry’s Venture Capitalists versus figures from the previous year(2). There’s certainly credibility in this transformation, and with the visions of thought leaders, we are able to imagine how technology will change HR for the better. It’s time for HR to get involved.
Firstly, let’s define disruption.
Disruption is caused by disruptive innovations. These innovations introduce the consumer to technology that will require them to change their current behaviour or modify the way they use/interact with other products/services(3). For clarification, we can compare disruptive innovation to it’s opposite: sustaining innovation, which is essentially upgrading. The key differentiation is the change of behaviour.
We must also reconsider the ‘consumer’ to potentially be an individual customer, a business client, a partner or employee. These categorise the different people you could be ‘serving’.
Who is required to change the consumers’ ‘behaviour’? The entire organization! Everyone will become a ‘consumer’. This is why the change is monumental; new HR platforms are no longer isolated to one business function. This will become clearer below.
5 Key Points on HR Disruption
Disruption tends to be a word with negative connotations. Below are 5 key points to demonstrate why HR Technology is disruptive, and not just innovative.
Integration is no longer a luxury; it has become a necessity. Integrated talent management platforms make their predecessors, talent management tools, look archaic. The rise of these tools happened in the early 2000s when firms became infatuated with HR automation. With the new Millennium, the hectic enterprise technology race was fierce, and tools were acquired on a superficial feature-by-feature basis. Now, how are these tools faring in the age of SaaS?
A huge drive in enterprises switching to the Cloud has been ongoing for some time, with HR embracing technology when it came onto the market. Now HR is stepping up its game once again, with the shift from tools, to platforms (referenced above). The key difference between the two is integration; ‘platforms’ imply a solution that increases data connectivity and accessibility via seamless integrations with other enterprise data sources.
As well as the clear benefits associated with a holistic view of data, corporations have caught up on to the hidden costs of systems integrations. The potential return on investment from HR platforms is far greater than continuing to put up with siloed tools. This is a crucial point; without using a platform that provides wider world context, you are effectively putting blinkers on your people management and talent acquisition staff as opportunities fly past unnoticed.
Yes, this term was coined ad-hoc at the time of writing, but what we want to portray here is HR management technology is not immune to the ‘as-a-Service’ movement.
The ‘as-a-Service’ model, like integration, has gained tremendous traction. To put this into perspective, as a business owner, would you opt for the hefty decade-long contract usage set in stone? Or would you prefer to invest in a software subscription, where you only pay for what you need? HR technology is also moving from the ‘all-or-nothing’ decision to flexibility, catching up with other business functions.
Apart from flexibility, another benefit of the ‘as-a-Service’ model is innovation. The vendor takes care of all upgrades and maintenance, so you have access to the latest version and code base; say goodbye to expensive upgrades. As the customer, you have the purchasing power and the ability to switch platforms more easily means your vendor’s priority is customer satisfaction, a sure win for you.
We have already touched on the concept of HR technology becoming inclusive, organisation-wide platforms. As you are managing people and talent, you will benefit from active employee and manager participation. Today’s HRMSs are designed with collaboration at their core, for example, providing users visibility into feedback and performance metrics. We interact with the features through intuitive design and gamification, able to self-serve and communicate. Moreover, HRMSs can enable and enhance remote working, a trend that has spread like fire in recent years.
New HRMS platforms are more robust and intelligent. They are capable of handling a wider variety of information meaning that companies can begin to quantitatively track aspects that were lost previously, such as softer skills.
- User Experience (UX)
Today’s UX is meant to have an intuitive design that makes these systems ‘sticky’, that is, desirable to use. Compared to pre-SaaS or on-premise systems, SaaS HRMS UX is wildly different. The screens are easy to understand and end users require little training and change management activities to migrate over from old HRMSs.
Intuitive application design correlates with user productivity. If a user can get to where they want to be faster, they’re more satisfied and less frustrated (we’ve all been there). Real-time information means users get the truth, on-demand. As these platforms are fully-mobile, users have a choice of devices for access, removing yet another barrier to user adoption of a technical system.
- Internet of Things (IoT)
The Internet of Things is the network phenomenon that connects devices to the internet, meaning they are a valuable source of data. Now, connected devices are the eyes and ears of your profile.
How can IoT connectivity be useful in HR? There are a number of examples that are referenced on the topics of performance, productivity and health. Intelligent voice recognition devices, record tone of voice and derive conclusions on emotions; for example, with such a device on a phone, we can monitor indicator of stress, or periods of peak performance. For productivity, devices can now process data to improve meetings. Health should be everyone’s priority, and sadly, it often isn’t. Smart wearables can show us our movement, activity and sleep information for us to make positive lifestyle changes.
Disrupted HR: Where to go from here?
The world of HR has plenty to look forward to in the foreseeable future. HR technology will continue to evolve as integrated platforms, with an engagement-orientated purpose, optimised for end user productivity and satisfaction, adding the ability to connect devices, all available via a flexible investment; if that isn’t exciting for HR, then they are a tough crowd to please!
Jokes aside, we want to provide you with an action as a takeaway. Start to evaluate what your people need to be engaged and successful. If you’re in HR, then you know them best. Take this information to evaluate what vendor can deliver a meaningful solution. Strive to bring innovation to your company and to HR in the new year; rise up as the leader of the pack, an innovator in your field.
Skilo is a cloud-based talent management platform for HR innovation that is adaptable and therefore, relevant to any organisation and industry.
Skilo facilitates HR processes such as mapping competency frameworks, manager-employee evaluation and feedback, enforcing skills development schedules and social collaboration to create a more engaged and productive workforce.
Start creating a personal development friendly organisation: Find out more here.
(1): “The HR Software Market Reinvents Itself”, (July 18th, 2016), J. Bersin, Forbes.
(2): “HR Technology Disruptions for 2017: Nine Trends Reinventing the HR Software Market”, (2016), J. Bersin, Bersin by Deloitte.
(3): adapted from “Crossing The Chasm” (2014), G. Moore, (3rd Ed.)