2016 was a big year for HR tech. At TSC, we’ll remember it as:
- The year the nature of solutions changed to focus on the experience of being an employee — and irreversibly away from simple process automation
- The first year cloud HCM systems beat on-premise deployment
- A year of huge investments in HR tech;in fact, total VC investment in the last two years has surpassed the last 20, and this trend doesn’t look like it’s slowing down anytime soon
2016’s milestones represent enduring trends that will continue to play out next year. But what else can you expect from HR tech in 2017? I sat down with my colleagues in the The Starr Conspiracy Intelligence Unit and asked what their thoughts are on the year ahead. Here are their insights.
Heather Tolksdorf, Practice Leader, Research-based Insights
Young HR tech brands are going to make headway in 2017 not with “groundbreaking innovation,” but with unique takes on old problems, good design thinking, and pockets full of investment capital. The biggest problem these vendors will face in 2017 is being heard in an increasingly crowded landscape — and knowing what to say. Much like in previous years, these young brands may be lured by buyers into feature wars, category creation, or “me too” messages and mistakenly dilute an otherwise compelling brand story.
Lou Chapman, Practice Leader, Content Strategy and Thought Leadership
Personalization and consumer-like usability in all of their various manifestations will increase in focus in 2017. Among the smaller and allegedly more disruptive emerging players, as well as among the legacy big kids on the block, the noisy competition for buyer attention will force HR tech vendors to become part of the 21st century user-centric technology environment — and do that in meaningful, useful, rubber-to-the-road sorts of ways. From learning and development to benefits administration to channel and partner development, one example is an increase in mobile apps that are built to do that job vs. being a modestly featured add-on to an existing platform. Drag-and-drop types of program setup, platform administration, content curation, and end-user (meaning the employee) customization is another.
Tony Spangler, Director of Communications
With the global talent pool tightening, organizations will increasingly focus on improving the employee experience in the hopes of increasing engagement, retention, and productivity. The successful companies will be those that don't claim that "we're doing to or for our employees" but those that can empower the employee experience through more intuitive and personalized technology experiences. At the same time, people will start being valued and rewarded for the skills they bring to the workplace and less focus will be put on titles and hierarchy.
Steve Smith, Chief of Intelligence Unit, Partner
The shift from HCM 1.0 to 2.0 will become apparent as HR tech experiences its own version of the Trump/Brexit effect. Anticipate some of the blue-chip HR tech brands to hit some serious adversity, while young upstart brands make some significant and unexpected waves in the industry landscape. It's going to be a gut check for the entire industry.
Lance Haun, Practice Leader and Principal Analyst
The future of HR tech isn't one system to rule them all. 2017 will see a significant rise of interoperability among various HR systems — through APIs and other connected services. If there is a true winner, it's the provider that can either be a true hub for all of this activity or the ones that can tap into the most hubs seamlessly. The top-down software model, with a single integrated talent management suite that does it all, was a mirage in the desert of reality. Good riddance.
Jonathan Goodman, Managing Director, Intelligence Unit
HR tech brands will continue to go mainstream in 2017, becoming some of the best-known tech brands. We’ve seen more than $5 billion of VC investment in HR software in the past two years — more than the prior 20 combined. This is a rising tide that will sink some boats. But all of the spending on category awareness has the potential to help any brand that knows how to navigate this period. So, even profit-focused privately owned companies stand to benefit greatly from this wave of investment.
Rob Cox, Practice Manager, Content Development
With a shift in focus on employee experience — gamification, personalization, well-being, engagement — rather than the organization, comes a shift in the way thought leadership is presented, as well. Rather than treating thought leadership pieces — be they e-books, podcasts, webinars, white papers, Lightpapers™ (wink wink, nudge nudge), etc. — like enormous, infallible gifts from on high, the most successful vendor brands will use thought leadership pieces to empathetically show the reader that the vendor is in the trenches with them and understands their pain points. That is, thought leadership on these topics will talk “with” rather than “at” the reader — the same way employee experience focuses on individuals and their problems. For an organization to be considered forward-looking, it will have to show that it “gets” the problem, sympathizes with the reader’s issues, and reveal that it can provide a better way. In 2017, there’s no room for pretension — leave that to the analysts.
Rachel Causey, Practice Manager, Content Development
We’ll see increasing interest among HR departments in fostering and improving employee well-being. HR technology solutions will continue to partner and innovate in the wellness space as it becomes a recognized driver of engagement. And with the recent U.S. election and the resulting uncertainty around healthcare, companies will look to place their investment in something that will have positive impact no matter the changes to the ACA — the financial and cultural benefits of a successful employee wellness program.