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How your HR can get lucky in 2019

date: 13 / 12 / 2018 | written by Hans Mangelschots | comments: 0
Longread As the end of the year is approaching all HR Trendwatchers and influencers are giving away their predictions for the next year, HR Technology in all kind of forms comes out as an absolute winner. On the other hand research tells us there are still various doubts about the capabilities of current HR Tech. Time to clear up some buzzwords and give HR seven Trends for 2019 (a lucky number 7) in this longread - based on investments made in several HR Tech categories, the sense of urgency on the side of Business and the trust/belief of HR in HR Tech.

Global Trends

The awareness about Industry 4.0 and opportunities behind The Digital Transformation are sinking in at business side, with a growing attention for HR Technology. This brings many buzzwords in play, which are sometimes more a hype than a lifesaver. More on that later on.

Meanwhile the challenges in recruiting, retention and L&D are passed the phase of denial.

Note: If you are still denying the impact of Millennials and Career Owners joining the workforce or the influence of consumerization and digitisation of society on the expectations of the workforce, please stop reading, take a look around in the room you are in and spot the dinosaurs. Check your smartphone while you are at it, 18-24y olds do that every 180 seconds.

According to a research with the HR leaders of EU by Fosway:

  • 75% of them is planning on buying HR Technology to tackle these future challenges
  • 86% say that end-user-experience is a crucial driver to buy new HR Tech
  • 95% even believes that accurate data and analytics are important for the success of their HR operation

Yet, 66% of HR Leaders think that current HR Tech is not yet up for the job as the focus of business grows towards people issues having an impact on HR domains:

  • Employment rates
  • Increasing transparency on business culture & practices
  • The Generational shift and Skills Gap
  • Diversity, inclusion, gender equity, etc.

Global Trends have an impact on the Investment Market, where the attention towards HR Tech is growing.

Source: HR Federation. Note: graph does not include SAP acquiring Qualtrics for $8B, Workables funding of $50M and several others.

Popular HR Tech categories for investors in 2018 were:

1. HCM

2. Talent Acquisition

3. Talent Management

Popular HR Tech subcategories for investors in 2018 were:

1.  Jobboards/Marketplace (TA)

2.  Collaboration & communication (HCM)

3.  Learning & development (TM)

“Global investors are rushing to the HR Tech Categorie, as new products enter the market on a seemingly daily basis, from startups to market leading legacy vendors, alike.” – HR Federation

Trend 1: Payroll Innovation

Is your payroll cloud based? Well.. It should be if you want to reduce costs when connecting to other work-life apps. Research shows that:

The length of time a payroll system is deployed has an impact on Payroll application replacement plans

  • Organisations that are planning to replace their current Payroll application within the next twelve months, report that their systems have been deployed for 8.62 years (on average)
  • Organisations that are planning to replace their current Payroll application within the next two years, report that their systems have been deployed for 10.85 years (on average)

Yet, Payroll is the backbone of a company and innovating the core promise that has been made to employees doesn’t sound that bad at all. Considering the legacy and Windows XP-character of these payrollsystems (no offence Bill Gates)..

40% of HR Leaders is planning on changing their Payroll system within the next two years and 45% will do the same with their core HR systems.

Pay Transparency is a trend that will be more known in 2019 as gender equity, diversity and inclusion will become more trending topics. Women earning 80% of a man’s fee for the same job is not hot. You want people to know you’ll treat them equally.

 Linkedin just announced their new recruiting module – including pay transparency

Pay Modeling is another trend that will become more introduced next year. At this time it is already possible for a self servicing employee to dig into his/her payslip and see what deductions went off and what other corporate advantages he/she enjoys.

In the future (when legal issues get solved) it will become possible for the employee to model his/her payslip; getting what he/she wants at the time he/she needs it.

I.e. When the employee receives a (discount on) a pet insurance but he/she does not have a pet, in the future it will become possible for this employee to change one advantage for another and swop the pet-plan for a dental insurance. 

In fact, depending on legal issues, the possibilities are pretty endless there to create a unique rewarding system in combination with employee feedback.

Trend 2: Practical use of Artificial intelligence/Machine Learning

First; let's kill the Buzzword

Is AI a buzzword? Yes it is. Just as much as “Algorithm” is severely overrated as a mathematical formula.

The clear definition of AI is: “The theory and development of computer systems able to perform tasks normally requiring human intelligence”. (Thank you Isabel Gonzales, PhD.)

In that perspective - thinking about any kind of machine - isn't AI already with us for decades? The development of being smarter than a human is more recent, but still.. Deep Blue was the first chesscomputer actually beating The World Champion in.. 1996!

That being said - the hype that is created about AI today is actually (in 99.9% of the cases) about Machine Learning (and deep learning).

AI however is a good conversation starter, but remains too often too abstract at this point. People want to know what AI can do for them and HR is not different.

HR & Machine Learning

When automating HR processes with Machine Learning, HR wants to know what the possibilities are and HR Leaders are interested in the use of AI – not AI on its own;

  • 76% wants to adopt Predictive Analytics
  • 70% wants to adopt Chatbots
  • 58% wants to adopt Candidate Shortlisting
  • 58% wants to adopt Dashboards and reporting

As there is a lot of attention and advantages on the use of Machine Learning, HR has to be careful: too many automation can lead to depersonalization, which often has a negative impact on the Employee Experience.

In 2019 this technology will take a more solid form and will be used in several HR categories. As a lot of investments in 2017 went to the development of AI and Machine Learning in certain HR subcategories, we expect these developments took place in 2018 and will hit the market next year.

Trend 3: Total Wellbeing Development

Total Talent Development will evolve to a Total Wellbeing Development. The Employee will be put in the driver's seat of his or her work-life experience.

There is no more balance, work and life are personalized experiences. To achieve performance and retention, HR must look at the employee as a whole - with a focus on the Employee Experience during the whole Employee Lifecycle.

Not only including wellness, but looking at the life of an employee and the extra value an employer can give on top of his already made commitments; like financial advice or help, group discounts, gym-funding, student loans, pay modeling and others.

Self Servicing technologies offering these kind of features, in combination with pay modeling, are predicted to have a nice future as its demand will only increase in period of time. Especially when HR consumerizes more and more towards the individual level, meeting the expectations of The Future Employee.

Trend 4: Learning becomes the new recruiting/ Recruiting is the new learning

The skills gap is not only an internal issue, which has to be handled by learning and development. Certain technologies already created the possibility to inform and educate potential recruits, regardless of their skillset, before they get hired.

Recruiting will take learning further to the outside. i.e. by providing possible candidates with learning content in their content (marketing) strategy, companies will attract and educate these “followers” at the same time - attracting Brand Ambassadors for loyal upskilling. 

This principle can also be practiced on the current workforce, together with micro-learning platforms these tools have the potential to build and retain field knowledge, improve the employer brand and the employee/candidate experience at the same time.

Learning Technologies are disrupted by consumerization and gamification and therefore they are very interesting for investors to put their money on, which means quality in development for HR.

Micro-learning and onboarding solutions providing the above are set for the future as possibly learning will become the new recruiting - giving candidates an extra edge with education and personal growth while they are still students or unemployed.

Trend 5: A vivid (VR) candidate experience

When talking about recruiting, the trend will continue to amaze future candidates with a vivid experience, to attract and inform them with the prospect of a sustainable jobmatch.

Features like virtual and augmented reality thereby will bloom in 2019 as the first examples already have been set as experiment in the years before.

In 2018 these experiments were being tried and implemented in recruiting strategies and complementary HR Tech. Next year they will achieve a more structural spot in the overal offer of HR Technology, together with their complementary technologies.

  • The UK army recruited new members using VR to “let them experience what it is really like to fight the front line.”
  • The Norwegian Army trials included a virtual drive with a tank using VR. 
  • The Willemen Group (a Belgian construction group) offers the opportunity to “step into your future”, a virtually experience what it is like to work for them, for all their profiles. So candidates can get a clear perspective.

Trend 6: Skill quantification

As learning and development shows up as one of the key drivers of Employee Engagement and retention, companies are going to look at their own staff to fill in the Skills Gap.

  • 51% of HR Leaders are planning to change their Recruiting/Talent Acquisition within the next two years
  • 51% of HR Leaders also are planning to change or go in to analytics the following two years

With the ability to map all your employees hard and soft skills together with those of new hires, the trend of dividing profiles and functions into tasks and roles could accelerate internal talent mobility through i.e. an internal marketplace for project work.

Instead of seeing talent leaving the company, HR will retrieve insights in how to retain their most valuable employee or retrieve her/him on the long term.

Instead of looking at jobs as a whole, they are going to divide the task over certain roles and micro-skills. Forward thinking employers are even considering an internal gig-marketplace to combine with the external gig-marketplace to get things done.

As the HR Tech Market has a whole host of new solutions to optimise the use of their internal talents, these companies are now searching for a balance between insourcing and outsourcing - or the in depth knowledge of their workforce skills and the input from outside the organis-ation to deliver project-based work.

As Technology finally is catching up, with trustworthy people analytics, it will become more actionable and therefore interesting for potential investors. The tip for HR is to adapt quicly before these technologies are being offered at a higher price.

Trend 7: Getting things done.

With new HR Leaders entering HR, who also are a part of the workforce and by being so subject to change. Combined with the changed value-perception of HR from people who are not in it (i.e. business or IT): the Employee Experience has become a core focus.

It is all coming together for HR in 2019. Communication and collaboration will be the features of this Employee Experience, for gaining accessible analytics and boost performance.

  • 51% of HR Leaders are planning to change their performance management within the next two years, improving their experience.
  • As 91% of HR Leaders say that increasing performance and profitability are primary goals, 86% of them are convinced that the quality of end user experience is a top driver to change HR systems.

New technologies are able to retrieve feedback from candidates to reduce bias and HR solutions are more embedded in communication and collaboration platforms, which can identify when and how a leader communicates with his or her team.

This could lead to a behavioural change within HR and the workforce, supported by feedback analysis, machine learning and workflow management. Also this means that the attention from investors for his HR Tech category will grow.

Why did SAP just bought Qualtrics for about $8 Billion? “Because it’s about the experience” cfr. Josh Bersin

Leader stand up

HR came a long way in 2018 and is finally awake. When these lucky 7 trends hit your organisation and are selected in coöperation with (an ambassador group of) it’s end users (guaranteeing accurate data), HR will stand firm to the challenges it will face in the future.

Nevertheless the HR mindset is changing at the same speed as HR Tech is going to hit the market in 2019. Being aware that a total strategy is needed to make structural changes in processes and experiences work, HR is better off not relying on luck.

In fact, HR does not need luck - it needs leaders who will take their organisation to where nobody has gone before: The Next Level.

Sources: HR Federation & Fosway Group.

My best wishes for 2019 to you all - a year as you can see looks pretty exciting. Are you ready for the Journey towards a better HR?

 

In 2019 HR Tech Valley will launch an offer for HR Tech providers, HR Engagors and HR descisionmakers. Stay tuned!

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