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