While the HR service landscape in India continues to evolve every year, no other segment has seen so many changes in the last 12 months as the HR technology market. These changes are not just a result of supply-side factors such as innovations and new technologies, but a lot of these changes are also driven by how organizations are implementing HR technology. As a result, the market continues to be dynamic. HR leaders who are in sync with these trends can expect to build a strong mechanism within their organizations to meet higher demands from human capital management in the future.

Demands from human capital management are very different today as compared to 12-24 months ago. While earlier organizations were still talking about how to make the function more strategic, human resource management has moved on to become an essential part of future business strategy. A lot of these changes have been accelerated because of the talent market conditions, where finding and retaining good talent have become more difficult. Human capital metrics now feature in business management discussions in organizations and terms such as engagement and performance are actively discussed as part of a business strategy. On the other hand, cost continues to be a key factor driving human capital decisions in companies. Lastly, better understanding of human capital measures has become central to an organization’s plans. The ability of technology to address all these needs has consequently led the market to mature. We spoke to many experts in the field of HR technology and our conversations lead us to believe that the Indian HR technology market can be expected to become highly mature over the next 24 months.

The cloud burst

Cloud has almost become a buzzword among HR organizations in India. A lot of this buzz is also because the market is rapidly seeing the frequent introduction of cloud-based products and platforms. While it may seem that awareness about cloud is low, if demand trends are to be believed, India accounts for a majority of the cloud-based demand among several geographies for Indian HR tech companies.

There is, however, a threat to cloud-based HR tech in India. Almost every new HR tech introduced to the market is claiming to be cloud-enabled. The experts who were interviewed for our story say that cloud is beginning to become a misnomer in the Indian technology market. Kiran Kumar, Vice-President, PeopleStrong says, “Just because a platform is hosted on a data center does not make it a cloud offering. There are several intrinsic characteristics, which differentiates a cloud offering from a regular hosted platform.” Among other things, cloud allows seamless upgrades and easier administration. Cloud-based technology will soon become the source of all trends and developments in the Indian HR tech market in the next 12 months.

Analytics is changing HR

Analytics is challenging every aspect of HR management in organizations. With advancements in analytics, the horizon of possibilities for HR has expanded. In these tough market conditions, such advancements are helping organizations gain access to better information about themselves and management styles. These insights are proving to be critical for HR organizations for gaining a competitive advantage.

Several insights, which were traditionally impossible have now become a reality with advanced human capital analytics technologies. The area of engagement is one such area where analytics is making a big difference. Traditionally, HR organizations would measure retrospective engagement through point-in-time surveys. While the survey-based method to measure engagement has been around for quite a long time, analytics is challenging the value of these services. Analytics is enabling companies to obtain real-time information about employees. For example, if an organization gets to know in real time about employees whose job portal activity increased significantly compared to historical patterns, inferences about the engagement strategy for that set of employees can be readjusted in real time. Such possibilities were unthinkable from retrospective surveys.

Anytime-anywhere is rising

As mobile penetration in India continues to rise, the wave of anytime-anywhere HR technology has surged in a big way. Many factors are contributing to this trend, including the evolving consumption preferences of the workforce. Employees are demanding access to HR systems, L&D modules, and leave management administration facilities from their mobiles. HR technology companies are therefore making mobile-optimised products to enable these changes. Balaji Ganesh, CEO of the HR technology company, Adrenalin e-Systems says, “The primary advantage of mobile is speed of action. Mobile can eliminate many procedural steps in day-to-day HR administration such as approval of leaves by a manager.” In addition, mobile also helps piecemeal consumption of HR facilities, such as a learning module.

Performance management is a top demand

One of the key challenges that India organizations are facing in terms of their workforce management is related to employee performance. Surveys show that general engagement levels in the talent market is low but compared to previous years, the impact of low engagement is on employee performance and not retention. More and more companies are demanding technology products with analytical capabilities, which can better predict and measure employee performance. Cloud is also contributing to this trend because of a cloud technology’s ability to provide a better base for an analytical product.

As management of human capital continues to mature in organizations, the next 12 months will see Indian companies building the base for higher-order HR management. Technology will play a key role in this transition, and we are likely to see a rise in investment in HR technology among Indian companies. CHROs have to brace for the ambiguity that stems from the lack of immediate RoI from HR tech implementations. To ensure that an HR technology implementation is successful, the partnership between HR and IT is very important. Ranjan Tayal, Senior Vice President, at Ramco Systems says, “It is important for the CHRO and the head of IT in a company to be on the same page during an HR technology implementation.”

As Indian companies continue to mature, the HR tech market will continue to harbour new products and innovations to enable the human resource function provide more useful contribution to business strategy.

What should a CHRO look for in an HR technology?

1. Easy administration: Does the service contract clearly outline the service terms and conditions for upgrade, maintenance etc.?
2. Cloud-capability: Does the technology offer the ability to migrate to a cloud-based offering if needed?
3. Intuitive user-interface: Will all stakeholder groups be able to use the technology and understand the interface easily?
4. Mobile optimization: Can the technology migrate to/be accessible through mobile platforms?
5. Analytical ability: Does the technology provide real-time data about some workforce measure?
6. Stakeholders: Will the technology be able to serve stakeholder in a userful manner?
7. Alignment with current and future plans: Does the service provider’s current and future business plans align with those of the organization?