Posted: 27 Jul. 2020 5 min. read

Is there a future for HR Tech?

HR Technology has changed massively over the last five to ten years, with more of a focus now on understanding how tech can deliver end to end talent experiences, and insights around productivity and wellness. The shift of HR's role to be the owner of productivity and employee experience, leveraging HR tech and data to add value across the organisation, is having a big impact on the HR function.

The explosion of HR Tech

Making humans better at work and making work better for humans is critical, and the data and experiences that HR technology can enable is an important part of this. If we look at the level of investment and funding that HR tech has had across the globe over the last two or three years, it really shows that organisations believe there's a future in this. Additionally, the types of technologies coming through in this market are really starting to drive innovation in this space.

There is also a heightened demand from HR leaders to understand how their employees are doing, especially in the current climate. HR technology has been even more important with more organisations and more jobs operating remotely.

If we look back five to ten years, when big cloud HCM technologies were implemented it was all about process efficiency. It was about access to clean and reliable data for operational reporting and mobile access. Now clients are wanting to understand how technology can deliver end to end experiences and predictive insights on top of operational reports, in areas such as productivity and wellness. The HR technology landscape now isn't really about HR and the abilities that HR can deliver to the organisation, it's about putting an ecosystem of technology around people that allows the workforce to engage with one another, focusing on productivity and collaboration suites. Think knowledge management, chatbots and chat type tools. The workforce needs to be able to transact with the organisation in the most intelligent and seamless way possible.

HR's ownership of productivity

There's a whole new range of metrics that are associated with the workforce and productivity is a key driver of this. HR really have to start thinking about the metrics that sit behind productivity and the technologies that can help measurement. In order to deliver the most effective workforce model and the most productive workforce, HR have to align to the business’s wider strategy and understand the direction it wants to take.

Broader analytics in the HR arena

Over the last 12 - 18 months there's been an evolution in the data that the HR are using. Most have operational data and are now exploring areas such as cloud. Being the custodian of the workforce and that workforce experience, HR have a unique opportunity to use workforce data to drive areas of experience and the overall business strategy, using tools that listen to the employees wants and needs, feeding that back to business leaders. This is different to the more traditional type of analytics used as it's far more qualitative. Also using technology such as natural language processing and cognitive engines to process sentiments that are coming through is very powerful.

The HR tech landscape

We are seeing organisations move from on-premise systems to full-suite cloud technologies that really tick 85% to 95% of key requirements. At the same time, smaller types of technologies that are dialled into niche areas and functionality are able to deliver things like video interviewing or VR-type learning. These trends make the HR technology landscape broader and more complex. Organisations are now starting to look at what technologies are essential to drive efficiency, productivity, experience and compliance across their workforce. So, over the next two to three years we'll see a lot of M&A activity in this space with some of the larger vendors acquiring some of the smaller vendors that have some of this really innovative technology. Also, some of the less essential technologies will disappear and we'll see a more consolidated marketplace.

The landscape might get a little smaller for a short amount of period as it continues to reduce and expand depending on the trends of businesses. To add to that, organisations themselves are not necessarily adopting new vendors or technology at the same pace as they are developing. So there are two different viewpoints in terms of how the HR tech landscape is evolving and how ready organisations are to use this tech.

Delivering a great employee experience

The importance of employee experience has developed a whole new area of the HR technology market. Areas such as recruitment or learning have been transformed by HR tech, as organisations listen to their workforce. We're seeing next generation employee engagement type surveys and pulse survey that continuously check in on the workforce, trying to understanding how people are feeling across the whole lifecycle of the employee.

Remote working and working from home

The current situation has left many organisations no choice but to adopt digital and to see the benefits of adopting it. We're now starting to see the forced adoption and the championed adoption of many types of technologies. HR has really stepped up over the last few months and is starting to understand what their employees want from their organisation in relation to technology, in relation to culture, in relation to wellness. HR have been far more receptive in understanding that information and feeding it back into the business.

The adoption of digital almost overnight…

Everyone has their own personal preference of how they want to connect with colleagues and individuals in their organisation. Technology is there to support as a great tool but also is an option. People have been figuring out unique ways of using technology and are very creative in just trying to connect. Seeing how an organisation looks at the landscape of HR technology, it's whatever you want to make of it.

Video communication has been huge recently and many people are commenting on having ‘fatigue’ from it. This is where we see HR taking ownership of employee experience and work-life balance. Organisations have been focused on pushing wellness agendas, such as virtual yoga classes at times of the day that we wouldn't typically see any organisations do a few months ago. The recent change to remote working has empowered HR to trial a bunch of different technologies and different methods and see what really works in their organisations. Also, when (and if) we do go back to the traditional working environment we will have a better idea of what's going to drive value in the organisation and what's going to resonate with employees more so than before.

Thoughts on technology journey within HR

The vendor landscape is large and there are great technologies to help with onboarding, digital signatures and so on. This is a great opportunity for HR to try new things and understand what works in their organisation. But we will see a standardisation of the technology landscape. Organisations over the last couple of years started to buy lots of different types of technologies for lots of different areas within the HR ecosystem. So, starting to standardise these technologies will drive a better, more consistent employee experience and stop the confusion around ownership and which technology does what. HR tech will really start to drive workforce productivity and increase the value of HR within organisations.
 

Authors

Tom HughesManager, People Technology Strategy Lead at Deloitte

Tom leads our People Technology Strategy offering in the UK. He specialises in advising and supporting organisations to analyse and select solutions from the rapidly evolving cloud, service delivery, workplace and digital technology marketplaces to enable their business strategies.

Pamela TrinhSenior Consultant, People Technology Strategy at Deloitte

Pamela is a part of our People Technology Strategy offering within the Human Capital Practice in the UK and specialises in supporting organisations going through large HR Transformations. With experience supporting businesses in redesigning and simplifying their systems landscapes, Pamela also helps organisations enhance their employee experience through implementing new digital tools.

Key contact

Tom Hughes

Tom Hughes

Manager

Tom leads our People Technology Strategy offering in the UK. He specialises in advising and supporting organisations to analyse and select solutions from the rapidly evolving cloud, service delivery, workplace and digital technology marketplaces to enable their business strategies. His knowledge of these marketplaces coupled with international project experience across strategy and transformation, has led him to develop an in-depth understanding of how these technologies act as an enabler to becoming a more digital and employee centric organisation.