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What is the future of HR Technology?
Hello! Thanks for your question about the future of HR technology. The short version is that the industry as a whole has a lot of catching up to do when it comes to adequate utilization of the existing cutting-edge innovations. The future of HR technology, as a result of that fact, is uncertain over the course of the next 20 years. The scope of the marketplace is definitely difficult to predict in the way of aggressive innovations regarding emerging technologies to invest in. Below you will find a deep dive of my findings.
METHODOLOGY
From the perspective of an investor, there are a few reasonable samples that indicate where the industry is going, but expect a lot of basic data-cleanup solutions before any cutting edge technology hits the mainstream and becomes part of the seriously invest-worthy territory. Seen in this article by the Harvard Business Review, "Most companies have thousands of employees, not millions, and the observations on those employees are still for the most part annual. In a company of this size, there is almost no reason for HR to use the special software and tools associated with big data."
Basically, a variety of industry experts agree to pump the brakes and focus on adding efficiency to most companies in the present tense. Seen in a Gartner industry report headline about employee performance, "As Employee Performance and Engagement Converge, a Comprehensive IT and HR Strategy Is Needed." The report features a series of opinions that draw attention to the necessity of modern managers to feature a baseline strategy towards the impending technology featured in the HR industry. This type of attitude signifies a relative slowing of the cutting-edge industries that feature more immersive employee experiences and a focus on more pragmatic solutions featuring already present data sets. Big Data is the largest driving force in HR right now, but its meaningful implications as a widespread solution, and the methods and techniques that will be used are still up for individual company implementation.
As a result, the nature of this brief is to illuminate the nature of a series of technologies as individual categories, and subsequently make an accurate snapshot of the current conditions, as well as perspective on future iterations of the technology. However, as the nature of most of the present concerns in the HR industry are rooted in sewing up the present inconsistencies, the majority of these predictions and of this analysis will be focused on this corridor of the HR tech market.
ANALYSIS
Throughout the research, one of the largest and most broad-spanning themes of experts commenting on the industry was that the current HR technology has not been entirely integrated into the vast majority of businesses available in the market place. Seen in a Huffington Post article featuring the impact of technology on HR, the writer admits "despite the potential impact, many companies still haven’t made the switch to modern HR systems."
As a result of that, many of the early bets that I would make are reliant on a greater integration of existing technology in the field as a source of growth in the industry. I would argue that greater market penetration is necessary. Currently, only corporate giants like IBM, feature the type of progressive technology for their HR departments, as seen here: "Smart companies like IBM compile data that the employees themselves generate on company-sponsored social media, for example, to monitor morale and identify workplace concerns."
IBM may be capable of seamlessly integrating advances in their workplace, but experts admit that business have a hard time even using the most basic working portions of their available analytics, as seen here: "For most companies, the challenge in HR is simply to use data at all — the reason being that the data associated with different tasks such as hiring and performance management, often reside in different databases." The absence of compatibility between differing technologies makes the present direction of the industry looking inward to clean up the bevy of messes made by existing technology that has yet to be used to its full potential. Despite these challenges currently facing the industry, there are a series of industries that look like they have real growth upside in the coming years.
PROJECTED GROWTH INDUSTRIES IN HR TECH
Currently, big data is the largest driving force in the HR technology market. Its factors positively affect possible industry advances of tomorrow, like more immersive employee experiences as derived through collection of data from all sources around you, as seen here featuring similar technological advances in ERP application development: "However, look to large enterprises to begin building out their Internet of Things (IoT) ecosystems and leveraging ERP tools to take action on the data created by this connection."
They also aid in employee retention, as seen here by a present firm who analytics just for such a reason. Seen here on their trends report for the industry, they illustrate the nature of their present market and where it plans to go next: "First, CHROs must lead a transformational effort to become more data-driven. Second, CHROs must immediately start using historical and current data to find patterns that could explain future employee behavior. As the data changes, new insights can be discovered and acted upon more quickly."
Finally, the last emerging market is in the development and proliferated maintenance of the existent data sets and existing technology presently being used by the majority of businesses. Seen in the piece, the 4 Pillars to the Future of HR Tech, the author argues that most businesses need basic figures to start entering the technological age: "What companies need is to make sure that they have the data that they can rely on for decision-making. Insights into employee behavior, proper reporting and understanding of the key efficiency metrics is what drives most value for the organization."
INSIGHTS
It is apparent at the writing of this brief that the industry of HR tech is in a technical conversion period in which the vast majority of the available market appears to be inaccessible to the types of tools currently being brought to bear. The is only initial market penetration being made by the aggressive tools in the field of HR tech. According to a Gartner industry report on the subject of HR Tech, under the subheading "future state," the following industry prediction reads "HCM System Landscapes Are Rationalized." Along with that, the report features future directions in the landscape of HR tech are "Multiple Approaches to Investing in HCM Technology," and "HCM Loosely Coupled With Other ERP Applications."
As of right now, the prognostications that are available for industry growth can only reasonably be projected in the sphere of the next 1-5 years. The reason for this is the general attitude of the industry on the position of its current adoption of the system as a whole, but also of those companies which have adopted the available technology, but have effectively used it in a minor or possible improper way that has yet to offer even a portion of the suggested available insight. Subsequently, I would say that there will be a potential pop-up of industry of redundancy companies that effectively clean up the data sets, as per the suggestion of the Harvard Business Review article aforementioned: " In short, most companies — and that includes a lot of big ones — don’t need fancy data scientists. They need database managers to clean up the data. And they need simple software — sometimes even Excel spreadsheets can do the analyses that most HR departments need."
CONCLUSION
To wrap it up, that was a predictive analysis of the future of HR tech from an investment/industry examination perspective. The truth is, the industry is in the midst of a technical wholesale conversion period that makes prediction in the way of 20 years almost irresponsible. Rather, the industry will se a lagging lower half of the business economy as it gradually accepts even the most basic of data-driven solutions. Thanks for using Wonder! Please let us know if we can help with anything else!