HR Technology 2020: Disruption Ahead
It’s Fall again and I’m finishing up my biggest-ever report on HR Technology: The HR Tech 2020 Disruptions Study.
This comprehensive study is done in partnership with LRP, the producers of the HR Technology Conference, so you can get your hands on it in one of two ways.
- First, you can sign up to attend one of LRP’s HR Technology conferences (US, Singapore, and China), and you will receive a special link to download.
- Second, you will be able to purchase it for $1,495 after the conference is completed.
Unlike prior years, I won’t be distributing it free on the internet (sorry, it’s just too big an effort).
You can register here to get my slide deck on the findings (2019 now, 2020 soon).
The report is very comprehensive and summarizes an entire year of research on HR Tech, including interviews with hundreds of vendors, meetings with dozens of HR organizations, and discussions with investors, analysts, and consultants.
While I cannot cover all of the 3,000+ vendors in the market, the study summarizes the major trends in every segment and includes detailed descriptions of more than 100 providers, as well as an overview of the 12 segments of the market.
Even though I have advisory relationships with many vendors, this report is entirely neutral. My only goal is to give you, the HR leader or buyer, useful and practical guidance about trends, who’s hot, and strategies for success with HR technology.
(If you are a vendor and feel slighted that you were left out, please contact me. I try to talk with everyone but sometimes I run out of time.)
What Is Covered
This year’s report has 12 in-depth chapters and includes a detailed overview of 12 segments of the market.
The chapters cover core HCM platforms, employee experience platforms, talent management tools, recruitment technologies and assessment tools, learning technologies and learning platforms, employee listening and engagement systems, performance management tools, gig work and talent marketplace tools, career development tools, well-being platforms and providers, analytics, AI and ONA systems, diversity and inclusion technologies, and lots of discussion about the growing role of AI.
I also took time to discuss how technology is changing the role of privacy, ethics, and service-delivery models in HR.
A Few Key Findings
There are many findings throughout the report, but let me highlight a few:
1. Cloud-based HCM platforms continue to grow expansively but new players are starting to emerge.
There are now many well established cloud-based HCM vendors (Oracle, Workday, SAP, ADP, Ultimate, Ceridian, Infor, Namely, Gusto, Paycor, HiBob, Sage, and many more) and they have matured to the point they have talent features to complement their core HR and payroll functions.
That said, there has been a massive change in the way these systems work for users, and many have not kept up. There is a brand new idea sweeping the market, a focus on “employee experience platforms” which often sit on top of the HCM. And despite HCM vendor efforts to build out end-to-end talent applications, the market is so innovative they have all started to partner with others.
2. Employee Experience and Talent Experience platforms have arrived.
The traditional learning management and talent management systems are still out there, but a whole new breed of “redesigned” platforms is now available. As I discussed in a prior article, these new tools are disrupting the traditional talent management platforms because they are designed for employees first, HR departments second.
3. The HR Tech architecture has changed.
For many years we always thought of the HCM system as a “single system of record.” While that may be true for some data, it’s no longer the right approach.
Today, as the report explains, most companies have many “systems of record” and they are tied together through the corporate authentication system, often complemented with a data lake to store historic data.
Sitting on top of his is a new set of software (which we used to call the HR self-service portal) to create end-to-end employee journeys. This new market, the “employee experience platform” market, is a hot space for everyone.
And since most of the innovative tools you now need come from smaller companies, you have to be comfortable that you’re implementing an “app-ecosystem,” not just a core HCM system.
4. The recruiting market is on fire and filled with AI.
Thanks to ten years of job growth, the recruitment market has never seen such investment, and the number of new systems, technologies, and AI-driven solutions is amazing. Recruiting is now the biggest AI market in HR, with AI-based sourcing, assessment, screening, interviewing, and candidate experience management now available. Recruiting teams (like the rest of HR) have to be systems integrators, but that’s just where we are – no one platform does it all.
You will also find that many recruitment vendors are drifting into internal talent mobility, career management, and other adjacent areas. Why? The recruiting market is crowded (it’s a very “red ocean”) and many of these vendors have very useful technology for internal mobility. This internal recruitment market is now bigger than ever, thanks to the ever-tightening labor force.
5. Learning Technology has matured, and you can now learn “In the Flow of Work.”
As I’ve talked about many times, reskilling and continuous upskilling is a CEO-level topic, and you’ll be amazed at the tools now available. LMS platforms have not gone away, but they are definitely moving into the basement. Learning experience platforms are an explosive market and are now being complemented with collaborative learning, video authoring, AI-based content recommendations, inferred and self-described skills assessment, and amazing micro-learning tools.
6. Well-Being and Health Tech is merging with HR tech.
The $48 billion corporate well-being market is perhaps the most fragmented and explosive of all. Tools for mental and emotional health, stress reduction, physical fitness, diet, and financial wellbeing are everywhere. Most of the big healthcare providers are pouring money into new AI-based automated tools, and these can be mixed and matched to fit any workforce in the world. And the well-being platforms (Virgin Pulse, LimeAde, MEquilibrium, and others) can bring these applications together and create real behavior change for your workforce.
7. Technology to promote inclusion, diversity, spot and diagnose harassment, are here.
This is a market I don’t think existed ten years ago: today this is a true segment of the tech market and you should understand what’s available because these are critical issues for your employment brand and company brand.
8. Engagement Tools Mature: Action Platforms are emerging.
All the tools for employee surveys and feedback are rapidly turning into “action platforms,” systems that collect information and turn it into actionable recommendations for managers. This is a big shift, and some of the vendors are clearly in the lead. And a new breed of vendors now offer innovative “listening platforms,” which go beyond pulse surveys.
This world has moved well beyond an I/O Psychologist’s survey platform to a scalable corporate infrastructure to capture employee voice, feedback, and various forms of surveys.
9. Analytics, Organizational Network Analysis, Chatbots, and Natural Language Processing are hot.
AI is here, and this means analytics, ONA, chatbots, and NLP are now part of HR. As new and confusing as this technology has been, I am excited to see all these tools move from the “sidelines” to center stage, as companies now realize they can buy much of this technology as needed, without having to build everything internally.
The Vendor Marketplace Is Changing
I won’t cover all the vendors here, but let me mention that Microsoft (LinkedIn and Glint), Google (Google Jobs), IBM (Watson branded products), Salesforce (Trailhead), Facebook (Workplace) and ServiceNow (service automation and employee experience) have all jumped into this market. These are multi-billion dollar vendors, all positioning themselves to compete with the incumbents Oracle, Workday, SuccessFactors, ADP, and everyone else.
AI, a buzzword we’re all getting tired of hearing, is now here. Our newest Bersin Academy program, HR in the Age of AI, is launching on September 30. Sign up for the Josh Bersin Academy now and you can be one of our first enrollees! (We developed this program in partnership with IBM, so it’s filled with case studies and important perspectives on AI you can use.)
The VC and private equity market has poured almost over $4 billion dollars into the space this year, with companies like Saba, JobVite, Kronos, Infor, Kazoo, and many others receiving “mature equity” investments. In addition, more than $1 billion of venture money went into startups. Virtually every VC now has an HR Tech partner and almost everyone who ever sold their company is now an angel investor.
Investment in HR Tech Skyrockets
Driven by all this investment, the market is more confusing than ever. There are almost “too many” startups for the market to absorb. This is tough on both vendors and HR tech buyers.
CHROs frequently tell me “can you tell all these vendors to stop calling me?” Obviously I can’t – but this is a problem. When you as a buyer are confused, you tend to pause and wait – and that makes your job harder and obviously frustrates the providers.
As I discuss in the report, you need to have someone who serves as an “architect” to look at these systems and be prepared to do pilots – because all these tools are amazing, and you’re going to end up with quite a few. (The Sierra-Cedar report believes the average big company has 11 HR systems of record, and my L&D research shows that L&D teams have 22 different tools in that area alone.)
Despite The Disruption, It’s All Good
As they say, despite this frenzy, “it’s all good.” The products in the market today are more mature, proven, and well designed than I have ever seen. I am constantly talking with vendors, seeing a demo, and saying “wow, you’ve really knocked that out of the park.”
Which gets me to my final point in this article: how do you decide what to buy?
I have been through this enough to know that “issuing an RFP” is not really the right way to go. While your procurement department may want you to do this to drive down price, there is a much better process. It involves surveying the market, carefully identifying your needs, piloting tools, and co-designing solutions with your business counterparts.
In fact, it’s so important to do this well, we developed an entire course The HR Tech Workshop, available within the Josh Bersin Academy, that teaches you how to do this. This course is launching in early October and I encourage you to sign up.
It’s an exciting time for HR leaders, technologists, and vendors. There’s something for everyone this year, I want to thank all my vendor and HR professional friends for talking with me this year. Come join me at the HR Technology Conference. It’s going to be an exciting year ahead!