Human resources technology was never the sexiest part of a company’s information technology portfolio. It’s the plumbing that makes the people side of a business go. Nobody notices as long as job openings get filled, payroll is on time, people can clock in and out and get time off without hassle, and open enrollment season goes off without a hitch.
The past few years changed that, none more than 2017. Companies are thinking more strategically about what they need their workforce to do and be, and how to make that happen given protracted low unemployment that’s made it harder to fill all kinds of jobs. They’re struggling with how to embrace automation and the best way to incorporate everything from agile ways of work to artificial intelligence. On top of that, employers received a major tax code overhaul dumped in their laps in the waning days of December. HR tech can help sort it all out.
If that wasn’t enough, 2017 was a wake-up call that sexual harassment, discrimination and other illegal or unethical activities are thriving in work settings from Hollywood to Capitol Hill, the factory floor to farmers’ fields. By one account, 71 percent of alleged abuses reported last year occurred in workplace settings, but only 25.7 percent were reported to HR. That gap and claims that reporting harassment to HR did nothing or made problems worse point up the need for better practices — or for some organizations to add them in the first place. HR tech can help with that, too.
It’s all conspiring to make 2018 an interesting time for the technology that companies use for talent management. Here is how I see just a few of the major trends playing out. The rest I’ll be covering in future editions of this column over the year.
Payroll will be screwed up
The country’s tax overhaul didn’t change everything, but it changed enough. And because Congress passed it in a hurry, the heavy lifting of mapping out how it affects payroll falls to the Internal Revenue Service — which is expected to issue initial withholding guidance later this month — and to employers, and by extension payroll providers.
This could be good or bad for vendors, starting with ADP. The payroll giant defeated a fourth quarter bid by an activist shareholder to take over board seats based on the argument that the company wasn’t innovating fast enough and its stock was losing value as a result. ADP previously kicked off an overhaul of its underlying technology, the first in years. The tax code rewrite gives ADP an opportunity to demonstrate whether it can innovate as nimbly as smaller, younger competitors. Stay tuned.
Vendors will give payroll a gig economy makeover
Speaking of payroll, expect to see more HR tech vendors jump on the gig economy bandwagon by offering corporate customers the ability to offer workers instant pay. At the HR Technology Conference & Exposition in October, ADP Chief Executive Carlos Rodriguez said the company’s revamped payroll service will include instant pay through technology acquired when it bought a digital payments company called Global Cash Card earlier the same month.
“It’s inevitable that the old ways of how people got paid, in batches of weekly payroll based on the accounting department, is not going to be the way business is done 10 years down the road,” Rodriguez said at the conference.
ADP joins flexible pay services such as Instant Financial and Square’s Square Payroll that facilitate paying hourly workers, contractors and other employees by the day or shift. Expect to see more vendors follow suit.
Companies will use tech to improve sexual harassment training
If there’s one thing we learned from the #metoo movement, it’s attitudes about the acceptability of harassment and discrimination start at the top. No amount of new HR tech will help if the people in charge don’t change. But that doesn’t mean companies won’t try for a tech fix. Expect to see HR tech vendors offer better tools for sexual harassment training.
While research has shown that training can help companies avoid liability in lawsuits, it can have the unintended consequence of confirming gender stereotypes. If companies are serious about fixing the problem, they must also create equitable cultures and promote more women into positions of power. Better people analytics and performance management systems can help track those activities. More frequent employee surveys to determine if people feel safe can also help, according to former Securities and Exchange Commission assistant director turned whistleblower lawyer Jordan Thomas in a Quartz op-ed.
Along with better tracking, companies can combat harassment by empowering bystanders to act, encouraging civility, tailoring training to their individual workplaces and encouraging reporting, according to the New York Times.
If HR departments are the problem, independent whistleblower tech will try to be part of the solution
In case after case, women and other employees who say they were harassed told HR either nothing happened or HR personnel sided with management. Expect to see some enterprising tech vendors offer whistleblower hotlines or other harassment reporting technology that takes HR out of the loop. How well it works could be a different story.
It’ll be a break-out year for women in HR tech
Women make up the biggest portion of the HR community, though less so at the chief HR officer level. When it comes to promoting more women leadership roles, HR tech vendors have the opportunity to lead by example. One standout is Ultimate Software Chief People Officer Vivian Maza, who helped build the HR tech vendor to a workforce of 4,000 people that’s nearly 50 percent women. Women also represent 43 percent of the company’s managers. “A lot of women think they can’t do stuff, and we have to change that mindset,” Maza said at a women in HR tech summit at last fall’s HR Technology Conference.
Other signs that more women are moving into HR tech leadership positions include the fact that two major HR tech industry events are now run by women. Longtime HR tech publicist Jeanne Achille [MR11] is taking over as program chair for the HR Technology Conference’s fast-growing women in HR tech summit. Late last year, longtime industry insider and former Great Place to Work CEO China Gorman signed on to manage the year-old Unleash conference, which takes place in May.
Watch for at least one HR tech IPO
As breakout years go, this could be the one where HR tech startups go big or go home. Namely, a late-stage startup cloud-based core HR management, payroll and benefits platform, has hinted that it’s paving the way toward an initial public stock offering. Look for other startups to explore different exit strategies, including buyouts or mergers.
In fact, I’d already filed this column and had to update it after getting word that applicant tracking system vendor iCIMS is acquiring TextRecruit, a San Jose, California-based startup that sells an SMS-based ATS and core HR service. TextRecruit sells a recruiting chatbot named ARI, short for Automated Recruiter Interface, that fields questions from job seekers before passing qualified candidates onto a real recruiter for further vetting. The chatbot works with Facebook Messenger and WhatsApp and is powered by Watson, IBM’s natural language-based supercomputer. iCIMS will run TextRecruit as a wholly owned subsidiary, according to a Jan. 8 post on the latter’s blog about the sale.
At the rate newcomers have jumped into the business, don’t be surprised to see the number of flameouts increase too. Many have me-too products that duplicate what’s already on the market without adding anything new.
You’ll get sick of hearing about artificial intelligence
If the hype around AI-based HR tech was bad in 2017, you haven’t seen anything yet. By one estimate, companies are expected to dedicate 20 percent of their workers to AI-related activities by 2020. Not only will companies be scrambling to find employees who can do the work, they’ll be using AI to do it, along with adopting AI for other HR and talent economy functions.
Given that push, it’s no surprise that HR tech companies are figuring out how to incorporate AI or machine learning into their existing products or building new services arounds around the technologies. As I wrote in a column on AI for talent management, in recruiting alone, close to two-thirds, or 62 percent, of 1,143 recruiters expect to spend more on AI-based software in 2018, according to one survey. Of those, 86 percent said they plan to spend on AI-based software for sourcing.
In addition to sourcing and recruiting, expect to hear more this year about AI, machine learning and natural language processing for other talent management functions, including success planning, learning, job interviews, employee wellness and employee assistance programs.
New giants could spar with existing giants
HR tech hasn’t lacked for big players, with the biggest consisting of Oracle, SAP, Workday, ADP and, more recently, Microsoft through its 2016 acquisition of LinkedIn. In 2017, Google and Facebook joined the club by adding job search-related features to their respective offerings. Google rolled out three services: a way for employers to markup job postings to show up in Google search results; a search engine API that job boards can add to improve searches on their sites; and Google Hire, which has been described as a free, lightweight applicant tracking system. Facebook added a Jobs function and is seeking partners with employer job content to show job postings to its 2 billion monthly users.
Some of these players are direct competitors — Oracle, SAP and Workday, for example, vie for the same core HR tech clients, and Google and Facebook are trying to encroach on turf long held by Microsoft, LinkedIn and Indeed. But size is not an automatic indicator of success. Earlier attempts to use Facebook for job-related services failed, although all of them were run by third parties .
Expect to see better corporate training, and more of it
Companies are figuring out that in an economy that’s running at full employment, there’s no way to find job candidates with all the skills and qualifications they’re looking for, especially for fast-growing jobs such as machine learning engineers and data scientists. Expect to see companies ramp up training to deal with the shortage but also to help existing employees pick up new skills. At the same time, companies are redesigning learning and development to be more democratic, self-directed and appealing to younger workers. They’re making greater use of video and breaking down training into “snackable” chunks. Accenture is one company that has switched to this style of personalized nanolearning.
Also in 2018, expect to see more companies use virtual reality and augmented reality for training. One company that’s committed to VR training is United Parcel Service, or UPS, which in late 2017 began using 360-degree street scenes projected inside VR headsets to teach new drivers about basic safety protocols[MR22] .
Good times are coming for shift-scheduling software
As more municipalities and states pass laws requiring predictable shifts for hourly workers, the onus is on companies to figure out how to do that as efficiently as possible, a fact that hasn’t gone unnoticed by HR tech companies that make shift-scheduling software.
Michelle Rafter is a business journalist in Portland, Oregon, reporting on workforce and tech for Talent Economy and other publications. If you have a comment or a column idea for her, email email@example.com.