The transformational changes taking place across the HR technology landscape have the potential to provide CIOs with better tools for managing the people side of their IT organizations.
Imagine a human resources application that runs on employees' smartphones, recommends nearby people with whom they can network, helps to boost their productivity by evaluating their time management, offers suggestions for improving work-life balance, and provides targeted, on-the-job training. It may even share exercise and healthy eating tips when and where employees need them.
This scenario illustrates the consumer-focused direction of HR technology, one that centers on employee productivity and engagement. Given the strides vendors are making to provide those capabilities, they may become reality for large enterprises sooner than many executives think, according to a new report from Bersin by Deloitte, "HR Technology for 2016: 10 Big Disruptions Ahead".
Indeed, HR technology providers are increasingly designing applications for employees first, to enable workers to learn and develop, collaborate, share feedback, steer their careers, and even manage other people more effectively. The trend reflects a major shift from a decade ago, when vendors designed HR systems primarily to streamline HR administration, improve record-keeping, and help redesign HR processes. Today, digital technologies are transforming nearly every aspect of HR, from sourcing and recruiting to talent and performance management.
The current wave of technology-led HR transformation has two primary implications for CIOs. One, it offers a range of potentially promising new tools to help IT leaders better manage and engage the talent inside their organizations. Two, it creates opportunities for increased HR-IT partnership as HR leaders seek vendor selection and technology integration advice from CIOs.
In addition to technology aimed at engaging employees, several other trends are likely to influence CIOs' and CHROs' purchasing decisions:
Mobile emerges as a new HR technology platform. With smartphone use surging and employees across a range of functions seeking access to corporate applications via their mobile devices, companies are scrambling to adapt their HR systems accordingly. In some cases, they may create their own apps-pared-down versions of enterprise software that offer users streamlined access to basic HR functionality, such as submitting time sheets or expense reports. In cases where companies are ready to replace existing HR systems, they may look for vendors that offer mobile apps as part of their core services. Regardless of whether companies build or buy, delivering HR functionality via mobile platforms requires companies to consider the different features, mechanics, and user dynamics associated with mobile devices.
ERP vendors catch up as credible talent management providers. A decade ago, the talent management market was dominated by best-of-breed providers selling licensed software. Recruiting, learning, and performance management tools were sold as separate products, forcing companies to stitch those systems together and integrate them with their ERP systems. Then ERP vendors began acquiring these smaller companies and weaving specialized talent management products into their broader suites. As a result, many ERP vendors now provide end-to-end talent management solutions that meet the requirements of large, complex organizations.
"Built for the cloud" technology providers redefine HR functions. Even as ERP providers expand their HR product lines, a "third wave" of vendors is emerging with cloud-based talent solutions that are user-friendly, inexpensive to buy, and built for mobile devices from the start. These new vendors target a range of core HR activities, including payroll, recruiting, learning, and employee engagement.
New software categories include feedback, engagement, and culture management. Companies have grown increasingly concerned about low levels of employee engagement. In response, a plethora of software vendors have popped up that provide new tools for soliciting real-time employee feedback, assessing culture, monitoring engagement, and managing employee performance and goals. These tools allow organizations to more promptly uncover and respond to employees' issues, needs, and suggestions.
Performance and goal management are reinvented with feedback and check-ins. Dozens of large companies that have replaced traditional, year-end performance management practices with more agile, real-time, and feedback-driven approaches have found their existing performance management software doesn't support their new processes. Startups see an opportunity to fill this gap but, to date, they have yet to build into their products many of the features that large companies typically want, such as reviews and ratings. As a result, companies may have trouble finding the appropriate tools to support a performance management redesign.
Startups move to integrate learning content from disparate sources. The growing need for training has created tremendous demand for easy-to-use, Web-based professional development content. Companies are increasingly offering online training from a range of sources and platforms, but the challenge many now face is bringing this content together to create an integrated learning experience for employees. As with the areas of performance, engagement, and culture management, small vendors are stepping in to address this need.
The field of predictive analytics continues to grow. Predictive analytics is likely to become one of the most important features in HR technology platforms over the next several years. Even though many HR organizations have been slow to adopt people analytics, a wide variety of vendors offer impressive capabilities in that area, including the ability to identify "toxic" employees, recommend training, predict attrition and unplanned absences, and highlight the promotions and transfers most likely to produce high-performing employees.
Cloud computing hasn't dampened demand for technology services. While cloud-based software is generally easier than on-premise systems to implement and maintain, it still requires significant effort to roll out. Bersin's research shows organizations that purchase new cloud-based HR systems experience many unexpected challenges during the transition: New systems have to be "harmonized" with existing processes, integrated with existing systems, and introduced to users with vast amounts of training and communication. To ease the switch from on-premise to cloud, select HR vendors that offer high levels of service, products with open-programming interfaces, and industry-specific experience.
HR technology innovation brings employee engagement to the fore. The HR technology landscape is changing more rapidly than ever. As CIOs and HR leaders look to upgrade and replace existing HR systems, they should consider vendors and tools that offer consumer-like experiences, mobile capabilities, and predictive analytics-and allow employees to test them for ease of use, not just for features and workflow. The number of employees using HR tools and the duration and frequency of their usage will become important measures of engagement and effectiveness.