Innovations are Coming to The Human Resource
Harbor View Advisors recently hosted a roundtable event focused on the trends in Human Capital Management Technology. Participants represented a cross-section of industries and roles including HR Directors, Talent Acquisition Managers and Chief People Officers. Broadly speaking, the participant companies represent industries that make up roughly 50% of U.S. private employment (U.S. Bureau of Labor and Statistics ), including: Healthcare, Transportation, Finance, E-Commerce and Utilities.
There was lively discussion on the forces impacting the HR function that ranged from the importance of engagement in the workplace to the potential shortfalls of new technologies entering the HR market.
In this note, we highlight three observations:
- There is an increasing inflow of new technology in HR, but HR practitioners expressed caution in adoption.
- The highest priority area for HR professionals continues to be talent acquisition.
- Roundtable participants anticipate breakthroughs from Artificial Intelligence (AI) and are excited about investments in this space.
There is an increasing amount of development and investment in new technology entering the HR arena; notably, the market for learning platforms reached $3 billion in 2016 and is expected to grow at a 19% Compound Annual Growth Rate until 2020 (Docebo ). Despite the influx of providers and products to the space, 32% of HR professionals believe that some of these technologies are still too immature to implement (KPMG International ). Practitioners also face the challenge of funding a new HR system and tackling the lack of integration with current IT systems. This dynamic creates an interesting juxtaposition in the market of technologically forward products being sold into a cautious consumer base.
Talent Acquisition is Getting the Money
Given a tightening labor market and the need for recruiters to reach an increasingly mobile, distributed workforce, HR executives unanimously agreed that technology innovation is most needed in Talent Acquisition. HR professionals are looking for a platform that bridges the gap between a friendly user experience for candidates and clear reporting analytics for talent acquisition managers. In fact, user experience and administrative experience were the top two reasons for switching systems (Docebo ).
Notably, new entrants in Talent Acquisition received the most funding in the HR technology arena, securing over half of the $1.06B in VC investments in 2017 (Larocque LLC ).
Looking forward, mobile-enabled and social-enabled technology solutions in Talent Management are expected to become among the most widespread technology adoptions in Human Resources (Docebo ).
Artificial Intelligence has Everyone’s Attention
Participants are excited about the potential for AI. It quickly became apparent that some participants have been slower to consider the application of AI while others are already in practice. Representatives began brainstorming ways to apply AI in their own HR processes.
The early AI adopters seemed to have an endless list of ways AI could facilitate functions from nurturing potential candidates to customizing e-learning content. However, the technology has had a slow start in entering the HR space- of the top 100 AI startups identified by CB Insights, only three companies came from the HR Tech space, representing only $69 million of the $12 billion in aggregate funding.
Despite HR’s slower adoption of AI relative to other industries, AI deals in HR have grown considerably from 2013 to 2018 (CBInsights ). Executives in the room agreed that the value add for these breakthrough technologies were well worth the investment.
The attendees at Harbor View’s recent HR roundtable provided valuable insights into technology trends in the HR arena. The opportunities for technology-enabled service in HR are expanding, and investments in the industry are paving the way for future innovations in talent acquisition, employee engagement, and leadership development. Breakthrough technologies, like AI, are growing support in the industry and HR executives are excited to experiment. There is a vision for HR where successful innovations are combined with existing point solutions to form a suite that can deliver a user-friendly experience for both candidates and administrators.
CBInsights. 2018. “Artificial Intelligence Deals Tracker,” https://www.cbinsights.com/research-artificial-intelligence-startup-deals.
Docebo. 2018. “Docebo E-Learning Trends Report 2017-2021,” https://www.docebo.com/resource/elearning-market-trends-and-forecast-2017-2021/.
KPMG International. 2017. “HR Transformation,” https://assets.kpmg.com/content/dam/kpmg/jm/pdf/hr-transformation2017.pdf.
Larocque LLC. 2018. “Q4 HR Tech VC Update,” http://larocqueinc.com/q4-hr-tech-vc-update/.
U.S. Bureau of Labor and Statistics. 2018. Employment Projections Program, https://www.bls.gov/emp/.