March 16, 2021
Human resources research and advisory firm Josh Bersin Research, claims that the biggest change in the HR technology market is the spread of HR applications into areas beyond payroll and employee administration to support a broad set of work activities. Other evolutions in the HR tech market include rising corporate determination to improve overall employee experience (EX) and the growth of HR tools designed for employees, not managers.
The data comes via the latest Josh Bersin annual HR technology market report, analysis of the human resources applications ecosystem—developed through extensive interviews with HR leadership and industry vendors.
The 140-page report, HR Technology 2021: The Definitive Guide, now in its 17th year, says the biggest change in the HR technology market is the shift from “HR” to “Work Tech,” evidenced by the pervasive spread of HR applications into areas beyond payroll and employee administration. It’s a change that underlines how in an age of rapid digital transformation everything that happens at work is now a series of activities that can be facilitated by technology.
Josh Bersin researchers highlight how 2021 will feature a focus on employee experience (EX), with more and more easy-to-use apps that make jobs easier and which slot into existing workplace tools.
This trend means the days of HR systems being siloed into payroll, benefits administration and LMS systems being loosely bolted on to a multiplicity of standalone talent management systems is at an end—inaugurating a major move from process to employee- or experience-based systems. HR system vendors are vying to develop single interfaces for employees for learning, connecting and collaborating with peers.
“The overall strategy is to make more and more HR technology ‘disappear’”
The major driver for this rapid shift is Covid-19. During the pandemic, companies realised that the survival and growth of their company was dependent on the health, wellbeing, and productivity of their people. Now, great EX is a company-wide value. EX’s prominence is also driven by acute talent shortages across many industry segments as well as widespread remote working arrangements that make person-to-person communication and interactions vital to business success, notes the report.
Finally, the report highlights the rise of “systems of productivity” and HR tools that make work easier. Designed with employees, rather than managers, in mind, the study suggests vendors are making their platforms easier to use and fully mobile-ready.
Meanwhile, the report details how AI and chat-bot driven systems are now mainstream, raising the bar for all technology vendors to build smarter systems than ever. Now, every HR technology vendor uses AI to make its systems more personalised, conversational, and easier to use. New demands for wellbeing, remote work, embedded analytics, and video are also factoring into product strategies.
The report also describes the appetite for software designed to support safe workplaces and hybrid workforces is growing (contingent work systems and gig work platforms). This has been accompanied by new ways of internal hiring, with in-house talent marketplace hubs that facilitate internal mobility, gig project work, mentoring, and job sharing taking off.
• The rise of tools for organisational network analysis, and people analytics systems built on graph databases
• Data on AI tools to help with diverse hiring, pay equity, representational diversity, and overall fairness at work.
• The emergence of skills taxonomies tools to help companies identify in-demand skills, skills gaps, and focus training efforts
• How remote work and employee reskilling trends have impacted the $20bn learning tech market
• From “systems of engagement” to “systems of design” and the importance of HR “creator tools”
Josh Bersin said: “The overall strategy is to make more and more HR technology ‘disappear’—that’s to say, make it useful to employees, managers, and leaders, and improve your overall employee experience. If it fits into our day-to-day work life, we’ll find it valuable and HR will benefit. If employees find it to be an interruption and we have to learn how to use it, the verdict is simple: companies won’t gain as much value from it.
“What does this mean for the vendor community? Vendors that deliver productive and personalised employee experiences will be the market winners.”
Image by Joseph Mucira