The old saying goes that the only two things we can count on are death and taxes. I’d like to add a third: the continued evolution of HR technology.
As I look ahead to 2023, I see the strengthening of several existing market categories and the emergence of other new ones. I’ll be talking about these categories—and much more—in my upcoming keynote at HR Tech Conference Virtual, which runs Feb. 28-March 2.
Meanwhile, here is a preview of the categories to watch:
- Employee experience platforms. Largely created by ServiceNow and then popularized by Microsoft Viva, this is a massive, high-priority product category. Vendors in this category offer deep functionalities that ERP and HCM vendors simply can’t offer. EXPs are sorely needed to manage the workflows related to hybrid work, employee listening, onboarding, and custom career and development work going on today.
- Talent intelligence platforms. These are AI-powered data platforms that help companies with sourcing, internal talent matching, intelligent succession management and data-driven solutions for assessment, job design and skills analysis. These systems (including Eightfold, Gloat, Beamery, Phenom, SeekOut and iCIMS) all offer new, high-value offerings. Their ERP counterparts simply are not there when it comes to matching capabilities.
Talent marketplace and career pathway solutions—offered by companies such as Gloat, Fuel50, Guild Education and EdAssist—are in a subset of this category. These companies are responding to urgent needs for intelligent career management, internal job mobility, job matching, mentoring and other talent challenges. In many ways, these are the talent management platforms of the future because they connect employees to learning, mentors, developmental assignments and jobs. Unlike the old “hire to retire” systems that tried to do this with competency models, these are highly dynamic systems that can infer skills and interests and identify opportunities identified through use of AI.
- Lifecycle employee listening systems. Solutions in this category are becoming more and more robust. If you look at survey platforms like Qualtrics, Perceptyx, Medallia, Glint and Workday Peakon, you quickly realize they are really data analytics platforms first and survey platforms second. They collect data from many sources (including passive data from email traffic, calendar schedules, voice feedback and even video), providing a comprehensive view of employee sentiment, satisfaction, engagement and, ultimately, productivity. Recently, BetterUp acquired Motive, Visier acquired Yva.ai, and Perceptyx acquired Cultivate; they all have the common goal to build out advanced passive listening systems. Microsoft Viva Insights is also moving in this direction. I have high hopes for this category because employee listening is core to understanding productivity and employee retention.
- Capability academies/mastery learning platforms. These solutions offer employees a centralized destination for browsing content, finding experts and mentors, taking courses, and deepening skills or learning new ones. Also in this space are solutions for creating learning content, for cohort-based or collaborative learning, and for providing AI-powered coaching networks.
- Talent acquisition suites. Although recruiting will slow this year, we’ll continue to see rapid innovation in this space. Solutions offering interview intelligence, video interviewing, and technical and soft skills assessments are among the “must-have” functions for modern recruiting. Leaders in this category include Modern Hire, Paradox, HireVue and Outmatch.
- Contract worker management platforms. In too many cases, contractors are still managed by purchasing departments using vendor management applications, and contractor data is not integrated into enterprise HR solutions. I believe in 2023 we will finally start to see these systems come together with core HRMSs as contract and gig work continues to grow. For instance, contractors can make up 40%-60% of workforces in pharmaceutical, tech and distribution companies. These individuals need scheduling systems, payroll support, various forms of onboarding, benefits and information security. Hot vendors in this category include Magnit (formerly ProUnlimited), the largest; Legion, offering one of the most exciting platforms; VNDLY, now part of Workday; SAP Fieldglass, now integrated into SuccessFactors; and Beeline, a market pioneer.
- Conversational AI. We’ll definitely see exciting innovation in this category. With solutions like Olivia (from Paradox), you can market, screen and even hire people with almost no human involvement. Take that type of technology, add an AI engine like that developed by GPT-3, and we have a huge new set of tools for HR service delivery, case management, recruiting and eventually coaching and learning. Vendors like ServiceNow, Microsoft, Workday, Oracle and SAP beef up this tech in 2023.
- Workspace management. This is another category we could see emerging in 2023. Now that hybrid work is here, companies need a way to schedule rooms and offices, procure AV and other equipment for various types of activities, organize and schedule teams. Facility managers need tools to monitor room and location utilization and better plan for hybrid work needs. HR teams want to help employees work wherever it’s most productive for them and for the company. Vendors like ServiceNow, Cisco and Microsoft are seeing the potential for AI-enabled solutions that can help manage utilization, scheduling, employee location, equipment and more.
While overall HR tech spending will probably slow, some of these categories will see growth. Buyers will need to make wise choices of where to invest—and that will require in-depth research into various product offerings, vendor satisfaction trends and product plans. As always, I strongly advise developing technology expertise within HR teams and strong relationships with enterprise IT.
I’ll get into much more detail in my upcoming conference keynote, HR Technology 2023: The Disruption Continues, slated for 11 a.m. ET. Feb. 28. I hope you’ll join me.