Nine hot-button issues in global HR technology.
By Brent Skinner
Mobile technology; integration of social media into HR-specific and talent management functions; unification of technologies under one best-in-class, single provider; emigration of systems to the cloud—they’re the usual suspects when discussing the global trends in HR technology. But what’s on the horizon for the tech sector? A wealth of research from the past year and educated speculation is shaping global trends in HR technology and the challenges driving them in human capital management. What do HR practitioners and vendors creating HR technology expect over the next 12 months?
As for the past year, what does the research tell us? What were the challenges? What kind of developments are we seeing from the global movers and shakers in HR technology to meet the needs of their customers—many of whom, after all, are global, too?
Trend 1: Expect investments in HR technology to resume.
Organizations are investing their spend in technology. According to CedarCrestone 2010-2011: HR Systems Survey, the number of organizations that continued investing in HR technology between 2009 and 2010 rose by 18 percent (60 percent in 2009 vs. 71 percent in 2010). A key to this increase? Executive buy-in. Midsized and large organizations made up the majority of survey participants, and their decision-makers demand a sound business case for investing in new initiatives related to HR systems.
Trend 2: Look to CHROs.
The 2010 IBM Global Chief Human Resource Officer Study is a report that delves into the challenges, opportunities, and goals of CHROs. (Data is gathered from more than 700 CHROs worldwide from late 2009 through mid-2010.) IBM’s study finds that workforce allocation and optimization are increasingly HR technology–related. Additionally, other studies point to mobile HR applications and employee assessment tools.
Trend 3: The influence of growth markets
From a broader standpoint, growth markets—China and India—are driving the thinking of HR leaders. Global growth challenges CHROs to properly allocate talent, and here is where workforce planning technology comes into play. Among the top 10 initiatives identified by CedarCrestone, workforce management (time, attendance, and absence) and workforce planning (allocation and reallocation of talent companywide) are new to the list.
Findings in CedarCrestone’s study show workforce planning to be a fast-growing area of need. Twenty-two percent of respondents cited an “inability to predict and plan future workforce needs” as a business challenge, a percentage that remained unchanged compared to the 2009-2010 survey. Notably, the adoption of applications associated with workforce optimization (workforce planning, workforce analytics, and predictive analytics), is growing at a healthy clip. Thirty-three percent of organizations in 2010 expect to use a workforce optimization–related application within the next three years, as opposed to 15 percent using one now—a greater than two-fold increase.
Trend 4: Employee assessment is informing workforce optimization.
Employee assessment applications generate data that often informs workforce optimization, and technology that supports this function is growing globally. “We see organizations putting more focus on candidate surveys,” says Mark McMillan, co-founder of Talent Function Group.
Assessments 2011: Selecting and Developing for the Future, a recent survey by Aberdeen Group of nearly 650 organizations, reveals that the employers assessing candidates both pre- and post-hire see an average of 18 percent more of their organizational goals achieved. Employee assessment along the entire employee lifecycle is apt to yield the kind of data that helps companies properly allocate talent for optimal organisation-wide results. Technologies that best facilitate the administration, collection, interpretation, and presentation of employment assessment data during the entirety of the employee lifecycle will continue to curry favor with organizations striving to know more about their workforce. The more companies know, the more effectively they can allocate talent.
“We see an increased use in pre-hire assessment,” says Katherine Jones, principal analyst for Bersin & Associates. “Even though we can say that the assessments themselves are the same or similar, it’s the use of assessments that differs. Today, unfortunately, very few companies use a pre-hire assessment of a candidate to do anything meaningful with once the person has joined the organisation.” Logic suggests that this will change.
Trend 5: Global local.
HR technology vendors are making the move to provide workable site localization of their offerings. “HCM solutions have typically been developed for use within a single country,” says Malcolm Fox, director of product marketing for Epicor.
“However, this is not how the global economy works, and even at the smaller end of the company size there is often a multinational presence. Developers of single-country HRIS solutions typically do not have the presence or resources to be able to introduce the required local support—which is much more than language translations, currencies and different address/social security number formats.”
The dispersion of operations across myriad locations, in growth and mature markets alike, calls for HR technology that can accommodate every location’s requirements seamlessly. “Internationalization is one of our big initiatives over the next 12 months, and it’s really three components,” says Brin McCagg, co-founder of OneWire Inc. “The first is making sure that the terminology, licenses and look and feel are familiar to the recruiter. The second component is in terms of the language, and it’s not that big of a deal; it really just requires translation services, which are almost commoditized, at this point. The third part is a performance issue, and OneWire will increasingly have redundancies in terms of servers in international locations.”
“The concept of global HR is a very, very large thing for any supplier of an HR solution to try to get its arms around, in part because of the regulations that are country-, state-, and even province-specific,” says Jones. “So companies today are trying to go global, to have standardization without centralization, and to have localization without process idiosyncrasies in each country. And this is not a trivial thing to pull off. They want the base processes to be consistent, fair and equitable, noting all the cultures and rules that have an impact.”
Trend 6: Taking social media to the next level.
Twenty-nine percent of organizations expect to be using social media applications within three years CedarCrestone reports. That’s a year-over-year increase of 91 percent. As CedarCrestone advises, it’s important to institute a programmatic use of social media: the systematic integration of social media technology into HR processes and the technology behind HR systems. An alternate name for these kinds of social media tools is collaborative applications. CedarCrestone reports they “support the organisation both internally and externally to recruit and brand, to enable collaboration on processes and projects, and to extend service delivery.”
“We see an increased focus on employment brand,” says McMillan. “Specifically, we see companies paying increased attention to the candidate experience created by their recruiting process. Companies know now that moments of dysfunction can end up all over social media.”
Use of social media at the programmatic level is nascent, but increasing. The percentage of organizations using social media in this way grew from 13 percent in 2009 to 21 percent in 2010 notes CedarCrestone. The type of social media that’s employed programmatically appears to run the gamut: wikis (18 percent), secure instant message (18 percent), internal blogs (17 percent), Facebook (17 percent), LinkedIn (16 percent), Twitter (13 percent), and external blogs (9 percent).
Trend 7: Keeping connected with mobile technology.
In 2010, the number of mobile workers exceeded 1 billion worldwide, and by 2015, that number will have grown by more than 10 percent, reveals the new report Mobile HR Solutions: Connecting & Empowering Your Workforce from VDC Research and the ADP Research Institute (ADPRI). U.S. growth in mobile workers will be strong, too, with IDC forecasting that their numbers will equal 75.5 percent of the U.S. workforce by 2013, or 119.7 million workers.
As the number of mobile workers skyrockets, helping off-site staff retain a meaningful connection with the organisation will become more critical. While the vision for mobile HR technology is to forge this kind of deeper connection, most mobile HR applications presently focus on workforce management and administration, with a movement toward unification of all functions in one application. ADP recently unveiled just this kind of solution, ADP Mobile Solutions, which provides an organisation’s mobile staff access to virtual payroll information, retirement savings, time and attendance, and the corporate intranet, all via the iOS, Android, or RIM smartphone platform.
“We’re seeing movement in mobile toward the ability to access an HR application, talent management application, even comp application, via a smartphone,” says Jones. “We looked at ERP [enterprise resource planning] companies that sell into the HR and talent management space and found 19 out of 30 see mobile as their key differentiator. So, when it’s more than half, it’s not a differentiator, but mobile is clearly a trend.”
Trend 8: Unifying in the cloud—or elsewhere.
Migration to the cloud continues apace, and at a fast clip. According to the CedarCrestone report, Software-as-a-Service (SaaS) deployment over all applications has increased even faster than forecasted in the 2009 survey (100 percent increase vs. 67 percent forecast in 2009). It is predicted that it will continue to increase by 50 percent over all applications tracked. For talent management application, SaaS deployment (28 percent) will essentially equal licensed, on-premise software (30 percent) within the next 12 months, according to the report.
One factor driving this migration to the cloud is organizations’ quest for a best-in-class suite of solutions from one provider. A new global survey from SumTotal Systems finds that 34 percent of all HR system buyers now seek a single vendor for their HR technology. For many, SaaS-based options appear to offer this solution. Even so, as noted by CedarCrestone, the best-performing organizations have ERP-based systems over SaaS-based HR technologies for their human resources management system (HRMS).
“Another study we did, last year, found that organizations really, really want a suite approach, as opposed to an array of best-of-breed vendors,” says Jones. “They found that integration is too difficult. They found that vendor management is hard; it’s way too complex. Plus, the biggest issue with this nonintegrated data, which these users are facing, is that you can’t reliably get analytics when you have apples and oranges. This is one of the key factors driving integration, and users are willing to sacrifice best-of-breed functionality in some areas in order to get integration right out of the box, in one vendor.”
Trend 9: Real meat from HR analytics.
The industry should look for movement in HR analytics, too—existing technologies’ ability to help aggregate and deliver data to HR decision-makers. Findings from IBM’s report reveal that 50 percent of CHROs claim to lack the analytics that highlight the quantity and availability of specific skills among their organisation’s workforce. Look for vendors to improve and tout their workforce optimization applications’ ability to do so.
“Hot, of course, is analytics, getting better business analytics,” says Jones. “In fact, in one study of ours, the top two areas of concern for HR pertained to analytics. One concern was that they didn’t know how to articulate analytics in the language of finance.
Second was just the inability to derive meaningful analytics—analytics that they knew were meaningful, from their often disparate product sets.”
What do the next 12 months hold?
Whether or not organizations will continue to display bravery in the face of an economy that continues to lack stability is unclear. Nevertheless, the next 12 months will probably bring more of the same—but on an evolutionary scale.
Globalization will not stop, and the need for workforce optimization will become more acute and evident. For example, CareerBuilder.com is working to launch a compensation–supply demand portal. This effort includes standardizing data on the behaviors of jobseekers in the APAC and the Europe/Middle East/Africa sector (EMEA).
The goal is to provide customers a way to plan their global workforce strategy using information about the availability of jobseekers compared to the demand for job seekers. This is already happening in the U.S.— EMEA and Asia are next.
Additionally, the influence of social media and mobile technology will continue to spread. For example, CareerBuilder’s Work@ application is helping companies amplify their employee referral programs by making it easy for workers to identify which Facebook friends are a match for open positions within their company and share those opportunities. The company’s CBMobile platform is a global, multilingual solution, which reformats corporate recruitment websites for mobile devices such as the iPhone.
The cloud’s profile and influence will increase, along the way presenting opportunities and challenges. And, in parallel, vendors will continue their acquisitions in an effort to assemble all-in-one suites. Look for providers to improve their cloud-to-cloud integration, notes Jones, for the same integration issues that plague users of ERP-based HR systems hailing from multiple vendors can beset companies that build HR systems out of components sourced from many clouds.