A Typhoon Is About to Hit the HR Tech Market  

5 December 2018:

These last few months have been a whirlwind. I recently wrapped up a global roadshow during which I talked with HR and vendor executives in Paris, Moscow, Amsterdam and Romania. In September, I also had the honor of participating in the 2018 HR Technology Conference in Las Vegas—probably the best conference yet. Buyers were knowledgeable and tech-savvy but eager for more information, and vendors had impressive innovations to discuss and demonstrate.

All these conversations formed a clear forecast: A typhoon is about to hit the HR-tech market. In a typhoon, thermal energy comes together, resulting in a swirling cyclone that sucks everything into its path. That’s what appears to be happening there.

According to the latest research by Sierra-Cedar, HR technology spending increased by an astounding 10 percent this year. This is a very high number, considering that globally HR tech spending is well over $40 billion. And according to CB Insights, in the last two years $12 billion of new investment capital also entered the market, most of which goes to start-ups and growth-focused vendors.

To give you a sense of the coming disruption, I’m now tracking more than 1,400 global-HR tech companies—most of which range from start-ups to midsized vendors selling solutions to HR departments around the world. Almost two-thirds of these companies are less than three years old, and most are focused on new segments of the market, such as advanced use of AI or cognitive technologies or the redesign of talent and HR applications.

 


Why all the growth? It’s quite simple: The global economy continues to grow; companies are looking for new tools to attract, recruit, engage and manage people in new ways; and organizations are operating in a more digital way, changing how people are managed. Companies are also changing how they pay people, implementing new solutions for wellbeing and team management, and purchasing even more powerful tools for analytics and detailed reporting.

Underlying these factors is a desperate need to improve the employee experience. Every executive I talk with is trying to find ways to make the work experience simpler, healthier and more engaging for people. Consequently, technology vendors are trying to make their tools become invisible to users by fitting functionality into the flow of employees’ day-to-day work. (One of the biggest trends in HR tech we’ll be seeing in the coming year is what I call “HR in the flow of work.”)

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Source: HR Executive

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