What does the expanding tech market mean for the future of HR?
By Larry Basinait
The rate of new technologies being developed to support HR is exponentially increasing each year, and the second quarter of 2019 was no exception. In total, there were 65 major announcements (those with at least $1 million in funding), up from 57 announced in the second quarter of 2018.
New research from HRO Today and Alexander Mann Solutions analyzes technology advancements and funding initiatives that support product innovation in the HR world. Human capital management (HCM) systems looked at as part of this research study include recruitment, employee records, performance, learning and compensation management, and compliance.
Out of the new tech solutions from the second quarter of 2019, 47 were from companies located in the United States, 14 from EMEA, and three from APAC. There were two dual-region launches: one from EMEA and APAC and one from EMEA and the U.S. Looking at the specific regions, in the U.S., nearly one-third (15) of the tech developments were from companies in the Silicon Valley/San Francisco area, while in EMEA, five were from London-based companies. The most common type of announcement was product-related, with 22 individual citations.
Private equity and venture capital firms continue to invest heavily in HR technology. Most announcements were around funding for small or start-up organizations. Well-known technology providers such as ADP, SAP, Workday, and Cornerstone also launched new products.
In the second quarter of 2019, investment deals hit more than $560 million dollars, which excludes product announcement investment in the current quarter. Funding for the early stages of a company was the most prevalent, with 15 Series A funding announcements.
Major mergers and acquisition activity continues. There were five acquisitions announced in the quarter. Ascentis, Alright Solutions, and Paycor were among the companies acquiring other HR technology providers or units.
Eye on AI
In the first half of 2019, there were 18 announcements of artificial intelligence (AI) technology solutions introduced to serve the HR industry. The already rapid pace of AI technology growth in HR is clearly increasing. But how will this infusion of AI into HR impact jobs in the areas it’s designed to support?
According to a 2017 Gartner report, while AI will eliminate 1.8 million jobs, it will also create 2.3 million jobs by 2020. That includes not just software engineers, but a variety of positions that will train AI systems to recognize objects and human activity, among others. So while AI technologies will replace some roles, they will drive the creation of new positions, which will be dedicated to the use of the technology.
HR leaders and managers can leverage the AI-powered systems to augment decision-making in recruitment and retention. Likewise, AI-powered chatbots that utilize natural language processing techniques to mimic human interactions can free up HR and allows executives to focus on developing relationships with candidates, fostering the understanding of the needs of hiring managers as well as the rest of the workforce. AI systems can do sentiment analysis on the mood of employees and suggest timely action to help retain talent. Such systems provide personalized recommendations on the learning and development programs of employees and in effect, improve productivity in a targeted way, finds DQIndia Online.
By strategically implementing AI into their processes, HR teams will be able to focus on the more “human” aspect of their roles to address the needs of both existing and potential employees. HR teams can achieve higher efficiency, and can focus more on improving employee satisfaction while cutting costs. Entrepreneur finds the adoption of disruptive technologies in tailor-made ways has opened up a new world of opportunities and has changed the way companies will operate in the future.
Click here to see more from the Human Resources New Technology Quarterly report.