The HR tech market is changing. Are you ready?
One year out from the pandemic, the light at the end of the tunnel is getting closer. With multiple vaccines being rolled out and a nearly $2 trillion stimulus initiative underway, the economy is on the way to righting itself—and the labor market is about to follow, predicted analyst and HRE columnist Josh Bersin during his opening day keynote at Tuesday’s Spring HR Tech.
“I have no question in my mind that this will be perhaps the most exciting, growing economy you have ever been a part of,” Bersin said. The previous record-low unemployment rate is likely to soon make a return—meaning competition again will be fierce among employers looking to attract and retain talent.
And that’s where tech will make the difference, Bersin said. The theme for HR technology in 2021 will not be recovery—most employers are already past that phase—but rather will be focused on transformation.
Core HCM remains a growing and dynamic market—everyone wants to get into it, Bersin noted. However, the largest core HCM providers are becoming spread thinner and thinner.
“All vendors that become large, successful companies have to adapt to this new world of employee experience, and it’s not easy,” he said. “These companies have tremendous amounts of data about your people and they have to start opening up APIs and creating journey interfaces so you can use these systems in more creative and developmental ways.”
“Everything about people has changed so we need systems that are very, very adaptable,” he added.
Here are five key trends Bersin sees developing in the HR tech market in 2021:
1. A new set of talent applications is emerging.
The conditions shaping work today are also influencing new talent apps. Bersin predicted we’ll see the most growth in work and team management tools, followed by wellbeing/productivity, rewards and pay, modern learning, performance reinvention and feedback.
“Talent management is competitive [for vendors],” he said. “There are lots of things to do here and it’s going to be tough on these vendors.”
2. The internal talent marketplace is redefining recruiting.
Because it will get increasingly difficult to hire external talent as the labor market tightens again, the importance of internal mobility—and tech platforms to enable it—are on the rise. There is a growing demand for talent marketplace tools that function like the “back end of recruiting,” Bersin said. Employees have the ability to search for opportunities, be matched with jobs and projects based on skills and apply within the platform. In a way, these solutions will be competing with external recruiting and internal learning tools, he noted—a balance employers will need to navigate.
3. Upping the game on listening.
Bersin identified 24 different elements that often comprise the employee experience—and that’s not even counting pandemic-driven factors. Above all, however, a positive EX comes down to employers genuinely listening and understanding employee needs—and its prominence has outgrown just HR.
“Employee experience is a multi-functional business strategy; it isn’t an HR initiative anymore,” Bersin said.
That means employers need listening tools that are similarly sophisticated. In recent years, employee feedback trends have gone from annual surveys to pulse surveys to, more recently, real-time data being funneled right into the hands of managers. Right now, the EX tech market is exploding, he said.
“In the pandemic, the No. 1 thing we’ve learned is that employees are where the action is,” Bersin said. “They know what’s going on in the company—what’s unsafe, whether there’s a customer service problem, a process that could be improved. If we’re not listening to them and giving them help and paying attention to the journeys they’re responsible for, we’re not going to be able to solve the employee experience problem.”
4. A ‘healthy and exciting’ learning market.
“We in L&D have to be capability champions now because we have so many tools and technologies that there’s no excuse to not have a great learning experience,” Bersin said.
However, the ubiquitous nature of learning has created a new demand for HR and L&D leaders. The content itself is not the problem—but rather, leaders are now challenged to bring it all together into a cohesive strategy, organized in a rational way.
“Employees don’t want to see tons and tons of content; they just want to learn what they need to to be good at their job,” Bersin said.
Younger employees, in particular, are eager for ways to learn “soft” or behavioral skills, while the learning experience itself is also a key consideration for learning leaders.
“The LMS used to be the core and you built on top of that,” he said. “Now, you start with the learning experience and build additional learning delivery systems and content systems on that. That’s why the LXP market has gotten so hot.”
5. Wellbeing is an imperative—but don’t overdo your tech.
It’s become crystal clear in the last year, Bersin said, that employee wellbeing has a direct tie to company performance.
“It’s no longer a benefit; [wellbeing] is now a business need,” he said. This means that wellbeing needs to be integrated into leadership and management models. While tech vendors are churning out new wellbeing products, they need to be thoughtfully incorporated into a wider strategy, Bersin noted.
“You don’t need all of [the wellness tools on the market]. You may have too many,” he said. “The strategy is to build a wellbeing approach: Teach people in the company about flexibility, forgiveness, time management, taking breaks, taking vacations, shutting down the company on the weekends, doing social responsibility. Those are the things that create a sense of wellbeing at work.”