The HR industry has witnessed an explosion in technology designed to service every conceivable area of the profession; from recruitment to offboarding and everything in between.
Enterprise software providers who have dominated the space for decades are now competing with thousands of niche technology offerings that promise to integrate seamlessly with your HR tech stack.
For many HR professionals, the bewildering array of technology solutions is confusing and somewhat overwhelming. But it doesn’t need to be. Rachel Hill, co-founder of HR Tech Market understands how to navigate the myriad technology options out there and has this advice to share.
The changing HR technology landscape
It almost feels like the HR tech explosion has come out of nowhere.
“Up until five to 10 years ago there were very few technology vendors out there – I could probably count them on the fingers of one hand,” says Rachel. “Unfortunately, there weren’t a lot of products and what was available wasn’t that automated.”
Traditionally, HR was a paper-based, form-driven and manual profession. “Most HR managers grew up that way. I’m in my early 50s – HR managers my age didn’t grow up with mobile apps,” she says. “Some of us are lifelong learners, but for many, this is a brave new world.”
What’s exciting about HR technology today is that there’s a solution out there for every function. HR managers have used technology to manage payroll and track employee leave for decades, but in 2020 you can find smart technologies that support:
- Recruitment and talent acquisition
- Learning and development
- Payroll and compensation
- Internal surveys and pulse checks
- Work health and safety
- HR data and analytics
- HR s trategy
- Culture and engagement
- Diversity and inclusion
- Performance management
- Redeployment and career coaching
- Talent management and succession
- Workforce planning and more.
In fact, when Rachel and her co-founder were developing the structure for their HR Tech Market – an online marketplace, and one-stop destination to find, sort and compare HR tech (more on this later) – they sorted the tech solutions into 14 categories and 130 subcategories.
Underpinning these products are the cutting-edge technologies that make them work: artificial intelligence that powers cognitive computing, smart analytics and chatbots that make personalisation possible, even in a fully automated environment.
At present, recruitment and talent acquisition solutions make up around 50% of the market, but Rachel predicts there’s going to be enormous growth in high-tech areas such as blockchain-based verification checking, HR chatbots, workforce behaviour tracking, and programmatic sourcing.
There is a huge number of vendors out there, with the global market worth as much as $400 billion. “We have 2,300 products on the site, but rumour has it there are 10,000 HR technology products out there globally. There are 350 vendors in Australia alone.”
Australia is doing pretty well in this respect – Rachel theorises that because we’ve had a skills shortage for such a long time, this situation has driven the need for technology solutions to attract talent. “We’re not ahead of the technology curve, but we’re not behind either,” she says, adding that Australian HR managers are sometimes keen to engage with Australian-based technology vendors if their organisations have policies around on-shore data storage or local sourcing requirements.
“The problem is that HR managers don’t know what they don’t know,” explains Rachel. Some of the challenges they face include:
- Not understanding what they need: Before meeting with technology salespeople, it’s crucial that HR managers take the time to understand what their requirements are. Do they need technology to specifically manage an area such as recruitment, onboarding, or learning and development? Or a system that will do everything? Once they have determined their needs, it will be easier for HR to know what questions they should ask during the product demo.
- Not knowing what’s out there: HR managers may be aware of the big players like SAP, but have difficulty discovering or sorting through the thousands of other vendors that could meet their needs. It really doesn’t help that a lot of the products have weird names like Bamboo, Namely, Wierdly, Curious Thing and Firstbird making them even more difficult to discover.
- Tech company salespeople tend to be very good at their jobs: They’re often ex-recruiters, they understand recruitment and are also very good at selling. HR managers may find themselves purchasing solutions that don’t meet their specific needs, don’t integrate, or have bells and whistles they’ll never make use of.
- HR passes buying power to other functions: When faced with a confusing choice, the temptation can be to abdicate the purchasing decision to other functions such as procurement or IT. This will inevitably mean that HR loses the buying power and often ends up with something they didn’t want.
- The digital gap: Older HR professionals face a steep learning curve as they absorb concepts such as artificial intelligence, the Cloud, integration, and chatbots.
- Enterprise system versus HR tech stack: Sometimes, HR has no control over the software they end up with. A CFO may make the decision to go with an enterprise system that “does everything” but leaves HR with a module such as an ATS that is clunky or doesn’t meet their needs. On the other end of the spectrum are small, “best-of-breed” products that are designed for a specific purpose. They tend to be cheaper, slicker and faster than enterprise systems. But often the issue lies in integration. HR may (understandably) not want to end up with a pick-and-mix of 17 different products. That being said, integration is rapidly improving and is now a top priority for product developers.
- Understanding costs: Costs often depend on company size, with some products being more cost effective if you scale. It’s important to understand the different cost models, such as licensing fees, or pay-per-user subscriptions. Costs can blow out if software requires tailoring or significant amounts of user training.
Navigating through the market
Rachel launched HR Tech Market in December 2019 to help HR professionals find great HR technologies that will solve a wide range of problems ranging from simple to complex. The website “is like AirBnB for HR Tech”, she says. “We’ve done the sorting and heavy lifting for you, to make it easy for HR managers to find what they need.”
It’s also a time saver. Without an online marketplace, it takes HR managers around 50 hours to research the technology offerings in just one product category.
HR Tech Market allows visitors to search the directory by category, subcategory, country, town, company size, and other parameters to find exactly what they need. The platform is free to use for HR managers, while vendors pay up to $1300 per year for a listing, which can include testimonials, videos, and case studies to help spruik their product.
“A lot of our mission is around connection and education, because this is quite new to many HR managers. We’re currently developing a resource centre that will include a buyers’ guide, templates, common questions to ask, and so on. In the future we plan to run workshops to help empower HR managers to make these decisions with confidence.”
Advice for HR tech buyers
The best place to start is to look at where you are spending the most time in HR and consider what could be automated. If you’re spending a lot of time answering employee questions, consider investing in a HR chatbot. If your company’s onboarding process is inconsistent and time-consuming, look for a technology solution in that area. As Rachel notes, these days there is a tech product for everything that HR does. Often, it’s available off-the-shelf and easily customisable.
Next, educate yourself on the offerings out there. Subscribe to newsletters, attend workshops, and use a tool such as HR Tech Market to make the search for the right technology vendor faster and easier.
It’s difficult to give advice on the right questions to ask during a technology demo, says Rachel, because it will depend on what you’re buying. “If you’re buying a learning management system (LMS), you might want to ask how many users it supports, cost per user, and what sort of mediums you can use. But if you’re buying an application tracking system (ATS), you should ask whether it includes tools to help AI search for candidates, post adverts, automate offers, onboarding, and reference checking. Some do, and some don’t. Some products include every tool within their platform while some link out to third-party tools.
“Understand your needs first, list your specifications, and know your budget,” she says. “It could be worth getting in a consultant to save you the potential future expense of making a poor decision. Most importantly, don’t give your buying power away to procurement. Make sure you’re at the table picking the vendor and functionality or employee experience you want. HR are the subject-matter experts, not procurement!”
About Rachel Hill
Rachel Hill is a recruitment solutions expert, media commentator, popular keynote speaker and Project Director and Principal Consultant at Hill Consulting HRS Australia. She advises corporate Australia on how to best attract and recruit for key skill shortages in the 21st century by reviewing their process efficiencies, their people, and use of technology. Rachel is passionate about HR tech and the use of new technology and applicant tracking solutions in HR. She is the author of numerous blogs and articles on candidate experience, HR best practices and recruitment improvements.