2017 Forecast: 9 HR Trends Disrupting the Market - Part 1

November 1, 2016

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In 2015, approximately 2.4 billion was invested in HR vendors - a 60% jump from the year before, signalling a massive disruption in the industry. This sudden increase in focus on HR technologies has people wondering, where did this interest come from?The HR Technology industry is in the cusp of a reinvention. Factors driving these changes are new technologies that are changing the way we experience and understand the way HR processes work, and the impact they have. These changes include:

  • A shift from cloud, to mobile
  • Learning analytics and artificial intelligence on the rise
  • Video, social systems, and behavioural economics, and wearable technology are becoming increasingly popular HR tools

The transformation is also due in part to the constant motion in HR. HR departments have to hire, train, pay, and manage employees every day, all the time. Decisions around these actions are crucial, complicated, and need to be made quickly and effectively. HR technologies and tools can either make these decisions easier and simpler, or even carry out the processes, alleviating departments from these tasks.

With 2016 wrapping up, we thought we would recap Bersin by Deloitte’s report, HR Technology Disruptions for 2017: Nine Trends Reinventing the HR Software Market. 

#1) Performance Management on the Rise

Traditionally, the method for measuring and managing performance (promotions, raises and rewards) was manual - There were top-down methods for establishing goals, conducting yearly performance reviews on these goals, grading and ranking employees based on performance, and planning for their improvement and growth. What’s missing in this process, however, is measuring performance and improvement. Without the ability to track improvement and performance, it's very difficult to determine whether performance goals are being achieved. 

In the 90’s and early 2000’s, the competition between companies over the best hires caused a change. Google was among one of the many companies who noticed improvement in performance when employees felt empowered, supported, and included in their own professional development. Giving people a say in their own goals (and how they achieve them), encourages them to set realistic but effective goals for themselves. This allows employees to explore their creativity, and have input in their own professional development. 

This shift has brought forth new methods and ideas, such as Objectives & Key Results (OKR’s), 20% time, and servant leadership. Now organizations are using technology to manage users, and measure performance and improvement. Like a domino effect, these new methods also sparked innovation and creation of other similar methods. These innovations have also cause an improvement in employee performance because users are motivated, and they have the support to achieve their goals. 

Now organizations are using technology to manage users. Organizations that have gone digital have learned how to incorporate group work and collaboration into their work culture. As well, they use these technologies to help evolve their products and services. According to reports by Bersin by Deloitte, 92% of companies are trying to restructure to incorporate digital culture, but only 14% of companies actually know how to do this.

How are organizations changing the way they do things? Frequent feedback, checking in, and conversations on progress and development, easy-to-build development plans, and developing common goals.  Easy-to-build development plans. Online assessments. User friendly systems. Performance is measured among teams, not just from the top down. Applications integrated into the existing HR tools.

#2) Larger Focus on Real-Time Engagement Evaluation, Performance, & Feedback

In the past, employee engagement was it’s own branch in an organization, headed by psychologists in charge of yearly conducted “climate” survey. This process proceeds to this day, but it is slowly changing, because organizations are realizing the limitations in annual surveys like these. More accurate data would be collected in real-time, and on the job. In response to this new revelation, some organizations are trying to find new and innovative ways to measure employee learning and performance. They are beginning to provide weekly, and/or monthly opportunities to give feedback, particularly in the case of a work event, or an organizational change.

To accommodate this change, HR tools and systems that conduct pulse surveys and feedback methods are becoming increasingly popular. According to a survey conducted by Bersin, over 120 vendors now provide pulse survey tools, systems that monitor employee’s moods and assess workplace culture and engagement, and other various forms of anonymous feedback tools. These tools categorize feedback, so that it’s easy to see the trends.

The idea is that over time, employees will become accustomed to these tools and systems, and become more comfortable providing their honest feedback. With more accurate feedback, organizations will have a better understanding of their employees, and will be able to better understand trends.

This ongoing engagement and feedback method is beginning to influence various other segments of the HR market and industry. Frequent feedback, assessments, and surveys are the foundation for a large portion of these new performance management tools. Systems like Trello, Slack, and Skype have built-in surveys and assessment tools. There’s also a rising trend in events such as hackathons, which are based on “always-on” feedback.

#3) People Analytics 

There has been a shortage of analytics skills in the HR market — the industry has been hungry for “data scientists” who can take on the challenge of collecting people data, and turn it into actionable insights. This benefit organizations by giving them insight into their people and processes (Such as what’s working, what isn’t, who is learning and who isn’t).

Analytics is quickly becoming a core part of all HR systems - including operational, assessments, and learning tools. This inclusion allows systems to make recommendations and suggestions to users, suggest to directors and managers, who the best employees are for certain projects, jobs, and positions, and show users based on their previous activity.

According to this report, organizations need to invest heavily in analytics if they want to keep up with their competition, and reduce the risk of losing their employees to them). Once analytics are implemented, it can take anywhere up go to a few years to make sense of the data - recognizing trends, making inferences, finding gaps, improving processes - so the longer you wait to get going, the longer you will have to wait to benefit from the insights people data have to offer. In the meantime, your competition may have already implemented new practices based on their analytic data, and be using those practices to attract your best employees, and gain competitive advantage over you in your market.

Here are some of the improvements organizations have been able to benefit from, using analytic tools in their HR systems:

  • Lower absence rates
  • Higher retention rates
  • Increased innovation
  • Reduced fraud and compliance violations
  • Higher collaboration and performance rates
  • Fewer work accidents
  • More diversity

Don't forget to check out Part 2!

If you're interested in people analytics, register for our upcoming webinar, Advanced LMS Reporting with Zoola Analytics, for an in-depth look at a solution that provides full access to all learning data, and helps make sense of your learners progress, and learning programs. 

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