The global Human Capital Management (HCM) software market is evolving at a rapid pace. As HR functions continue to change, organizations are confronting HCM providers with new challenges – from updating legacy HCM and payroll solutions to identifying specialized tools for performance, learning, and talent management. For companies offering HCM solutions, this means anticipating the next big market disruption and configuring actionable solutions to maintain their competitive edge.
Here are the five major technology trends to watch for in the HCM market:
1. Taking off with cloud first
With workplace flexibility and the rise of the gig economy, organizations are actively seeking cloud-based solutions. According to Netscribes research, a sizable share of service-based enterprises will go live with cloud-based technologies by 2025. Reduced IT involvement, improved user experience, cost reduction, and automation of routine processes are among the chief reasons triggering this shift. This, in turn, is aiding HR teams to spend more time working strategically to add value to their organizations. However, in order to be adopted, HCM solutions must be agile, easy to integrate, and flexible.
The current market is witnessing a surmounting demand for software that’s compatible with mobile architectures and applications. From learning modules to talent management systems and more, HCM solution providers are constantly innovating to stay competitive. Additionally, organizations are switching people processes and self-help employee portals to mobile platforms to further bolster productivity and team collaboration.
There’s no doubt that SaaS-based HCM solutions continue to thrive. However, Platform-as-a-Service (PaaS) applications can slash the time and cost involved in getting HR systems to work effectively. By first building and then running plugins on pre-defined platforms, PaaS allows companies to leverage their customized cloud-based applications seamlessly.
2. The need for advanced analytics
HR professionals are constantly pressured to draw actionable insights from employee data in order to streamline various operations. Here’s where advanced analytics can help. Advanced analytics can help organizations predict future scenarios and make data-backed decisions to increase employee performance and retention. Here’s a look at the most flourishing branches of advanced analytics in HCM:
- Cognitive computing
From improving payroll accuracy to aiding HR in case-specific help desk management, Artificial Intelligence-based systems are enabling smarter HCM products. AI and Machine Learning are being used to anticipate attrition, decipher behavioral and competency data, customize learning programs and improve appraisal procedures.
- Organizational Network Analysis (ONA)
ONA offers an organic view of the internal communication network within an organization. This helps HR recognize natural leaders, ensure better talent usage, and streamline collaboration for business efficiency. A blend of AI and ONA can help HR identify promising employees, scan through their overall assessment and performance feedback and sign off a fitting promotion.
3. Robotics and autonomous agents
Chatbots are proving to be a real boon for HR teams, otherwise bogged down with repetitive and time-consuming questions. By offering employees instant access to the right data, chatbots are making HCM systems true, productivity-enhancing, self-service portals. Additionally, automated video-based interviewing is another area redefining the traditional talent pool management functionalities.
4. Integration with social media
Social media allows for network building and effective communication at the workplace. Learning Management Systems are being revamped as HR teams embrace the latest technology to collaborate, innovate, network, and hire. The recruitment realm is also transforming steadily. Recruiters are constantly using their smartphones to browse social networking websites like LinkedIn or Glassdoor to post jobs and connect with potential candidates. HCM solutions that tie in all such functions into a single platform stand to win a preferential position.
5. Evolved learning solutions
Rising job pressure and depleting attention spans make it difficult for HR to maximize retention on its current learning mechanisms. Also, these must be accessible across channels and devices. That’s why virtual learning, collaborative learning, and on-the-job learning have emerged as the latest contenders in this space. Self-directed agile learning tools, next-generation learning management systems, and micro learning platforms are seeing an upward trend. The market is also witnessing spurring demand for learning experience platforms (LXPs) enabled with video learning.
The burgeoning HCM market is attracting lots of new players that offer specialized workforce management solutions. As new entrants find innovative ways to capture market share, the next wave of competitive advantage for HCM software companies will come from evolving quickly to new talent management needs and practices based on deep market knowledge.