Article: State of the HR Enterprise Software Market

HR Technology

State of the HR Enterprise Software Market

Know how the HR Enterprise Software Market is booming- Trends and Predictions
State of the HR Enterprise Software Market

Before your firm goes off on an HR software shopping spree, make sure you know exactly why you’re doing it and what you’ll likely experience beforehand. The market is undergoing a material reshaping where little discussion is on core HR and everyone seems focused on the next new shiny bauble. 

Many vendors today want to show you their new Alexa-like NLP (natural language processing) tool. Some firms have given these cute or historical names (e.g., Pacioli, Leonardo, etc.) but most are basic question/response tools that are still in the R&D stage. Ooh and aah them at the next vendor event but realize they’re a few years away from delivering any real value to your firm. 

Likewise, many vendors will talk your ear off re: new predictive analytics. Sadly, these tools are long on promise and short on delivery. One of the biggest shortfalls is that these tools generally only work with data that’s already in the HR system. Unfortunately, if you want to understand attrition risk, you need to pull in data from other systems inside and outside (e.g., LinkedIn) the firm. 

The science and opacity of many machine learning/algorithm-based solutions is still troubling. If the vendor won’t let your firm improve the accuracy of the algorithm (a sure sign of an opaque not transparent algorithm) then how will you defend its recommendations in court? That’s already a problem in Europe. 

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Of course, everyone wants to have technology that addresses hot HR issues like engagement, culture and wellness. But like the topics above, the need or hype is possibly outrunning the science and efficacy of these solutions.  Here’s an analyst trick, ask any vendor pitching one of these tools to show you the double-blind study that validates their tool’s usefulness. I’ve yet to see one. Sure, they’ll point to some article in an academic journal that covers the topic but not their solution. Without proof, it’s not science.

In fact, a lot of the above are simply the HR fad of the month solutions and may not have long-lived legs under them. My best counsel: Caveat Emptor (i.e., let the buyer beware).

While faddish HR tech gets the lion’s share of press, the big money is still going to big core HR suites. Why? A whole generation of non-cloud HR technology is getting de-installed to make way for solutions that were designed for in-memory databases, highly scalable environments, big data, etc. Solutions designed for on-premises equipment and relational databases are, in the words of millennials “Sooooo last Tuesday”. 

Sadly, it seems that only the underlying platform is being switched out in many firms. Functional enhancements to many big HR/HCM suites are minimal. We still don’t have a truly global payroll system yet. Compliance matters (e.g., GPDR in Europe, tax code changes in the US, etc.) are generating a pile of required, but not necessarily sexy, HR software enhancements.

Learning applications and technology continue to mature both in content and delivery mechanisms. Learning, today, doesn’t resemble what Training departments had to deploy years ago. It’s worth a re-examination.

Recruiting is one schizophrenic application space. Lots of big HR suites have very traditional, old school functionality within them to support a recruiting style that’s long past (e.g., placing ads in newspapers). If you want to see the way recruiting should be done, check out Smashfly, HireVue, Pymetrics and Entelo. It’ll open your thinking up and make you want to reengineer how you recruit. 

RPA and big data will be big in Recruiting, too. New solutions now exist to help employers find prospective applicants in fewer than 4 milliseconds. Their in-memory databases contain over 1 billion worker profiles and do what a person would need weeks to accomplish. Interviews can now be automatically scheduled via bots, on-boarding is done by smart scripts, etc.  

HR teams really need to get up to speed on RPA (robotic process automation) and yet it almost never comes up in discussions with HR leaders. RPA technology is great for repetitive, teachable tasks. In HR, RPA could be a chatbot that interrogates an employee’s voice message, email, interactive text message, etc. to find answers to common employee questions (e.g., “How do I enroll for a training class?”). Letting a bot handle these time sinks, frees up HR personnel to acquire skills in areas they’ll need soon like social sentiment analysis, statistics, social sciences, algorithm development, machine learning, natural language processing, big data, in-memory databases, etc.  The technology of HR will change and the HR team will need to respond in kind. 

Already, we’re seeing workers spending their entire day being dispatched by smart algorithms and bots. They instruct workers where to go, what parts to take, how to affect a repair, etc.  Who creates the performance review for a worker who doesn’t interact with other human beings? 

Finally, don’t be a lazy HR leader and expect all the new, cool ideas and products will come to you. Like me, you need to “play in traffic” to get current (or get ahead). If HR is part of your firm’s competitive differentiation, then you have become more aware of the possibilities (and the risks) out there. But, whatever you do, be sure to look for solutions with real business value not some fad.

Topics: HR Technology

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