Emerging HR Technologies & Disruptive Trends
Dr. Evangelo Damigos; PhD | Head of Digital Futures Research Desk
- Sustainable Growth and Trends
- Human Resources
- Digital Transformation
Publication | Update: Sep 2020
Due to the sheer volume of start-ups and how fragmented the HR Tech space is, it can be difficult for HR leaders to keep abreast of new and emerging technologies and prioritise which technologies are worth exploring.
According to CB Insights research, the HR tech space is exploding, with over 135 start-ups innovating across the value chain. The HR Tech space is fragmented and it can be difficult for HR leaders to keep abreast of new and emerging technologies and prioritise which technologies are worth exploring.
With that in mind, below we explore a discussion on emerging HR technology trends hosted by Lisa Gerhardt, Partner and Global Lead for Savannah Group’s Global HR Practice.
KEY EMERGING TECHNOLOGIES IN HR
Many large organisations have always had some kind of screening technology, but the next generation of screening technology, automated screening, is getting very sophisticated. This new type of technology is being paired with chat bots, and ultimately will be able to set up interviews and, through facial expression analysis and video interviewing, will likely start running early parts of the interview process. Some of the bigger organisations are trialling this successfully and are seeing it reap significant benefits in terms of both time and cost savings.
It does however rely on having a very good data set and the implementation and learning phase can be quite slow. There are also some potential hurdles to overcome in terms of data privacy and ensuring that there is enough accountability and explainability of the process so that if challenged, an organisation can explain why a candidate was rejected.
Chatbots have become increasingly popular, and there are hundreds of start-ups in the space. Following their success and popularity in customer service and marketing, chatbots are increasingly being deployed within HR. For years, cost and sophistication has been holding organisations back, but as sophistication increases and costs decrease, they are becoming increasingly more attractive to organisations. The chatbot space is very crowded, with over 250 start-ups in the US alone.
Artificial Intelligence and Machine Learning
A very popular topic in the press due to the exciting (and sometimes terrifying!) potential use cases, AI and specifically machine learning are paving the way for an incredibly advanced type of technology deployment within businesses. Largely the reserve of enterprise sized technology companies, systems like IBM’s Watson, Salesforce’s Einstein and Google’s Deep Mind labs are developing technologies that can process vast quantities of data to find relationships and patterns that were previously unthinkable to human analysts. When paired with larger data sets as a result of more sophisticated recruitment, wellness and L&D programs, from an HR function’s perspective, machine learning could be used to identify patterns among the highest performing, happiest, and most engaged individuals to further assist recruitment and L&D.
Not just limited to currency type applications like Bitcoin, blockchain can help HR to provide a better audit trail on sensitive issues. Sexual harassment cases for example, where a rogue individual or organisation may try to erase evidence of a complaint being lodged could instead be securely stored on the blockchain to avoid tampering. Very recently, the Ethereum blockchain was used for just that, after a Chinese student activist had an open letter censored after requesting information about a decade-old sexual misconduct case at the prestigious Peking University where she was a student. Referencing could be uploaded to a blockchain as well, allowing universities to upload verified qualifications so that organisations can check and verify the accuracy of an individual’s education.
VR is typically thought of as an immersive media experience for gaming or exploring a yet to be built physical space, but it’s also finding a place in HR. From a diversity and inclusion perspective, virtual reality (VR) can be used to emotionally immerse an individual and create a consequential shift in terms of their behaviour. For instance, one type of technology allows a user to wear a VR headset and inhabit a virtual body of the opposite gender. Studies have shown that ‘living’ inside a body of the opposite sex for just 20 minutes can create a powerful change to an individual’s outlook. This type of emotional immersion can also be used to help understand mental health issues.
From a retail point of view, facial recognition is increasingly being used to see what areas of a shop customers gravitate towards and how they react to products, offers or display items. From an HR point of view, this could either be used in a team training environment or in a larger space, for instance a canteen, to get an understanding of morale or motivation when the organisation is going through a big change for instance a merger or acquisition.
KEY TRENDS IN HR
One of the areas where we are seeing the most disruption is recruitment and specifically how to enhance the employer brand while making the process more efficient. There are more than 250 recruitment tech start-ups alone, with volume recruitment a popular area of focus for many of these start-ups. Culture and team fit is also a significant focus for these start-ups, and some are hoping to incorporate advanced psychometrics to give a more accurate fit.
Learning and development
L&D used to largely consist of a content depositary that relied on the individual to find what they needed. There have been videos and interactivity in the past, but it was often expensive and not hugely sophisticated. Learning and telling isn’t the favoured style of approach any more, and there is a big shift to focus on the individual rather than L&D being an organisational initiative. The thinking is that if learning is a life-long process, let’s have something that individuals can carry with themselves as they move from organisation to organisation. There is also a trend to create sophisticated curated content which is much more engaging and dynamic than previous versions.
Employee engagement and feedback
Marketing is a good function to look at for innovation – whatever becomes popular from a consumer branding point of view normally then gets applied to employer branding. Surveying tools have become much better and predictive analytics have made the process of issuing, populating and analysing surveys faster, allowing organisations to gather feedback more regularly and more quickly.
There are a number of start-ups that are shifting their focus from the crowded consumer wellness space to corporate wellness. This can be physical wellness but also financial wellness such as clearing and restructuring debt, discounts etc. While these types of systems have been around for a while, there is now a move to make them more mobile, more accessible, and to be proactive in prompting and supporting an individual.
The Gig Economy
Historically certain industries have had high numbers of contractors such as oil and gas, but a more flexible approach to work is getting more popular across other industries. The gig economy is much more than just a difference in payroll. Businesses are seeing the advantages of flexibly outsourcing specific parts of their processes, and individuals like the empowerment and freedom to choose their next assignment.
Interestingly, performance management is a space which is quite underdeveloped from a start-up perspective. There are solutions that look at feedback but nothing that covers the whole life cycle from strategy and interaction through to performance management and how to have difficult conversations.
HR Operations Automation
Probably one of the biggest areas for disruption is how HR runs itself, and the next phase of automation for HR functions is underway. Interestingly, the start-ups active in this space don’t typically see HR as the customers and are instead approaching line managers directly. These start-ups are creating solutions for a problem that they think HR are creating. Similarly, this is happening in Finance, and is part of a bigger back office automation theme.
What is appealing for businesses now is that these systems and applications are much easier to deploy rather than the big systems that have traditionally been bought for huge expense and took time and effort to deploy. There is an argument however that deploying numerous ‘mini’ systems to automate a specific part of the HR function may lead to a fragmented, inefficient and disjointed function.
Challenges for HR Leaders
From HR’s point of view, the fact that many tech start-ups are approaching line managers directly could be seen as a challenge to the control they have over an organisation. In reality, it’s very hard for any HR function to have absolute control over every HR process in every location, particularly for international businesses. This does however present some organisational challenges particularly in terms of continuity of service or leveraging economies of scale when you have a number of different locations using niche software to solve specific problems. Whereas the trend several years ago was around integrating technologies, in a lot of ways, this latest trend is a move towards the opposite and HR leaders will increasingly need to get comfortable with managing ambiguity.
As the technology develops, HR leaders will be expected to create an ever-more engaging and personalised employee experience while improving productivity and keeping costs under control. Similarly, technology will impact organisational development, workforce planning, reskilling and ultimately create a cultural change. HR leaders also have a role to play from an ethical perspective, as data privacy and data ownership issues increasingly effect organisations.
As a result, it’s important for HR leaders to stay up to date and to experiment and disrupt current processes.
Lisa Gerhardt, Savannah Group Partner, Human Resources Practice, has nearly 20 years executive search experience and leads the global HR practice. This breadth of knowledge enables Lisa to assist clients with complex global talent and resourcing challenges across all functions. With her depth of expertise in international HR appointments she brings significant added value to organisations as they plan their overall talent and resourcing strategies.
Objectives and Study Scope
This study has assimilated knowledge and insight from business and subject-matter experts, and from a broad spectrum of market initiatives. Building on this research, the objectives of this market research report is to provide actionable intelligence on opportunities alongside the market size of various segments, as well as fact-based information on key factors influencing the market- growth drivers, industry-specific challenges and other critical issues in terms of detailed analysis and impact.
The report in its entirety provides a comprehensive overview of the current global condition, as well as notable opportunities and challenges.
The analysis reflects market size, latest trends, growth drivers, threats, opportunities, as well as key market segments. The study addresses market dynamics in several geographic segments along with market analysis for the current market environment and future scenario over the forecast period.
The report also segments the market into various categories based on the product, end user, application, type, and region.
The report also studies various growth drivers and restraints impacting the market, plus a comprehensive market and vendor landscape in addition to a SWOT analysis of the key players. This analysis also examines the competitive landscape within each market. Market factors are assessed by examining barriers to entry and market opportunities. Strategies adopted by key players including recent developments, new product launches, merger and acquisitions, and other insightful updates are provided.
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We leverage extensive primary research, our contact database, knowledge of companies and industry relationships, patent and academic journal searches, and Institutes and University associate links to frame a strong visibility in the markets and technologies we cover.
We draw on available data sources and methods to profile developments. We use computerised data mining methods and analytical techniques, including cluster and regression modelling, to identify patterns from publicly available online information on enterprise web sites.
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The future outlook “forecast” is based on a set of statistical methods such as regression analysis, industry specific drivers as well as analyst evaluations, as well as analysis of the trends that influence economic outcomes and business decision making.
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Market phase is determined using factors in the Industry Life Cycle model. The adapted market phase definitions are as follows:
The Global Economic Model
The Global Economic Model brings together macroeconomic and sectoral forecasts for quantifying the key relationships.
The model is a hybrid statistical model that uses macroeconomic variables and inter-industry linkages to forecast sectoral output. The model is used to forecast not just output, but prices, wages, employment and investment. The principal variables driving the industry model are the components of final demand, which directly or indirectly determine the demand facing each industry. However, other macroeconomic assumptions — in particular exchange rates, as well as world commodity prices — also enter into the equation, as well as other industry specific factors that have been or are expected to impact.
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The individual characteristics of a good or service will have an impact, but there are also a number of general factors that will typically affect the sensitivity of demand, such as the availability of substitutes, whereby the elasticity is typically higher the greater the number of available substitutes, as consumers can easily switch between different products.
The degree of necessity. Luxury products and habit forming ones, typically have a higher elasticity.
Proportion of the budget consumed by the item. Products that consume a large portion of the consumer’s budget tend to have greater elasticity.
Elasticities tend to be greater over the long run because consumers have more time to adjust their behaviour.
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