HR Tech is at an inflection point, even for those who don’t know it.
By John Sumser
It would be nice to have a crystal ball that wasn’t quite so cloudy. In the two long years since the economic downturn started in earnest, seeing what’s coming has been hard to do. These days, it’s not uncommon to hear normally sensible business people talk about the absence of a long-term view as an acceptable thing.
It’s hard work to see the future in times of upheaval. You’d think that highly compensated executives could do better than the “forecasting is dead” point of view. You’d be tempted to think that they earn at least part of their big compensation packages by actually having a vision of the future and organizing around it.
Unfortunately, CYA is becoming a mainstream way of doing business.
Risk-averse, conservative decision-making was the norm last year. You had to look far and wide to find entrepreneurial experiments among the incumbent players. Mostly, the top folks pressured the trench-level workers to produce results according to the performance management plan. Doling the problem out in egalitarian bites was the 2010 substitute for vision.
In many ways, the best forecast for 2011 is that it will be more of the same. People will be pounding out results so that they can be measured as acceptable and keep their jobs. Q1 stock market wins will be wiped out by the still unsolved housing market problem in Q2. The vision shortage will result in more layoffs. Joblessness will not get much better.
Eeyore would be satisfied.
Surprisingly, there’s a lot of change in the air. It’s like early spring in the economy and here in our industry. If you look right beneath the gloom, you’ll see all sorts of agility and entrepreneurial stuff. It just isn’t happening in the incumbents or the big box markets.
Here in San Francisco more than a dozen small startups occupy the HR Technology space alone. Another 25 or 40 can be found around the United States. India, China, Australia and even Western Europe all are showing signs of startup activity.
These bright spots are uniformly operated by younger folks with more to win and less to lose. The conservative thinking that applies to operations that have something to lose doesn’t apply in the startup world. When startups are run as if losing ground was the worst that could happen, they always fail. Funny thing is that it’s also true for established players. It just doesn’t feel like it.
So, while the mood is conservative and anti-experimentation, here are the interesting things that will flower in 2011.
• The O Shrinks as RP and HR Growth Accelerates
Outsourcing is not going away. No matter how much we long for a better time when people routinely lost life and limb in factory jobs, we’re entrenched in the information economy. Outsourcing of HR and recruitment were novelties when they first arrived a decade ago. Increasingly, business leaders understand that recruiting and HR are just like oil changes. It’s best to get them done by professionals who know how to apply world class standards to the situation. Growth means that it is archaic to emphasize that these services are outsourced. As RP and HR providers learn to really distinguish their brands, the emphasis will be placed on the delivery of services and not the location of those services.
• Small Startup Entrepreneurial Explosion
Sustained unemployment and difficulty getting starter jobs portend great things for entrepreneurial activity. Between the people who are tired of working three jobs for one paycheck and those who simply have a lot of time on their hands, there’s a great startup workforce ready to be deployed. Working on the come makes more sense than sitting on your hands. As HR Tech migrates to a universe of apps and ecosystems, barriers to entry drop and huge opportunity rise. Expect to see a ton of startups.
• Standards Emerge in SaaS Procurement
Big companies continue to try to buy software-as-a-service (SaaS) as if it were licensed software being run on premise. The exact deal with SaaS is that it’s less expensive because it’s not tailorable. Therefore, the procurement process is going to change radically. Expect to see a lot of talk about how to buy SaaS software in 2011.
• It’s the Year of the App
HR Tech is a backwater. Throughout the rest of the high-technology world, apps have become the foundation for service delivery. The model of cheap, easy-to-install single purpose tools that integrate smoothly with the overall platform is an idea whose time has come. Expect that every HR Tech vendor is going to be talking about its App Store. What will differentiate one offering from another is the level of greed in the platform vendor. There’s a reason that the Salesforce.com version of this isn’t doing very well.
• Talk About The War For Talent Returns
If you listen closely, you can hear it already. In some areas (health care and IT), labor shortages are aggravated by the housing crisis. Where it was easy to move someone from Raleigh to San Francisco five years ago, it’s virtually impossible today. That means that the competition for workers in local markets will heat up. It’s really a case of harsh economic friction and a market-driven decline in workforce mobility. But, given the shortage of imagination we face, the old saw will get trotted out and re-inflated.
• Monster Returns To Job Board Leadership
Sometimes, the leadership at Monster is reluctant to wear the responsibility it has for driving the job board industry. It seems to come in waves. After all, these are the guys who invented the industry. The company’s culture, which is half pioneer and half monster, goes through wild swings that are at least somewhat related to the cyclical nature of the business. At any rate, they are coming to market with really smart ideas about where worker information belongs and how to manage it. The next step in job boards is tighter integration with customers, and Monster will lead the way.
• Software Definitions Change
Software is a medium—like paper, radio, television, video, film, CDs, digital file formats. It only really makes sense when it is loaded with data and expertise. For years, the financial community has rewarded software companies for not having content associated with their product. Today, the best software comes pre-populated with useful information. Increasingly, valuations will shift to reflect this. It’s the revenge of the bricks and mortar companies that have survived the first generation of the internet.
• It’s the Ecosystem, Baby
Companies are made by the company they keep. As hierarchies shrink and more work is done outside of core expertise, the question of how to manage HR in the ecosystem starts to bubble to the top. Your local community, educational suppliers, service providers, vendors, channel partners, distributors, development community, and other external entities are all essential to organizational success. Learning to spread effective practices and standards throughout the entire “ecosystem” is becoming the essence of enterprise behavior. This is the year that the HR industry takes note.
So, there’s a ton of material for theses and event programming. We’re at an inflection point, even though it seems gloomy. Material advantage can be had by those who notice and capitalize on these trends.
John Sumser is a technology consultant, trade show producer, and webmaster of HRExaminer.com. He can be reached at john@johnsumser.com.
