2023 HR Technology Trends: Talent Marketplaces, Expanding AI and Optimizing Existing Systems

By Dave Zielinski January 10, 2023
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2023 HR Technology Trends: Talent Marketplaces, Expanding AI and Optimizing Existing Systems

​Creating internal talent marketplaces, optimizing investments in existing systems, supporting hybrid work and expanding the use of artificial intelligence (AI) will be top technology priorities in 2023, according to HR analysts and practitioners interviewed by SHRM Online.

While talent conditions will vary widely by industry—with some companies continuing to lay off employees while others increase compensation and perks to attract and retain workers amid ongoing labor shortages—there will be commonalities in how HR leaders deploy existing and emerging technologies in an uncertain economic climate, experts said.

Optimizing ROI from Existing Technology Stacks

Technology analysts believe shrewd HR leaders will focus on optimizing their existing technology ecosystems before considering investments in new platforms this year.

"In times of economic uncertainty, organizations should lead with process optimization across the tools and resources they already have in place," said Kimberly Carroll, managing principal of IA, an HR advisory firm in Atlanta. "If net-new technologies are then determined to be needed, it should be in the context of the most valuable outcomes supporting the highest-impact HR processes."

Kara Yarnot, vice president of strategic consulting services for HireClix, a talent acquisition consulting firm in Gloucester, Mass., said a top priority for HR leaders in 2023 will be effectively integrating tools they already have in technology stacks.

"Stand-alone, nonintegrated systems create manual work and increase the likelihood of errors," Yarnot said. "They also can negatively impact the employee and candidate experience."

David Wentworth, principal analyst of learning and development for the Brandon Hall Group, an HR advisory and research firm in Delray Beach, Fla., said one of the most valuable things learning and development (L&D) leaders can do in 2023 is audit their current technology systems to ensure platforms are being used to their full potential.

"Identify the current challenges L&D is facing and see which, if any, can be addressed with the tools and technologies already in the building," Wentworth said. "Is every system adequately integrated into its environment? Conversations with your existing technology providers can remedy many of these challenges without a need to look for new solutions in the market."

Internal Talent Marketplaces Stay Hot

Internal talent marketplaces were one of the hottest HR technologies in 2022, and experts expect these digital platforms will continue to gain traction this year. These systems match workers with internal job openings, side gigs or projects; list available mentors; detail learning opportunities that support career paths; and more.

"Investments in internal talent mobility will pay off more than ever in 2023," said David Brodeur-Johnson, a principal analyst specializing in employee experience for Forrester, a global market research company.

John Kostoulas, a vice president in Gartner's HR practice, said Gartner clients continue to show strong interest in talent marketplaces. "HR and other organizational leaders can benefit from data created by these marketplaces to support workforce planning and other talent processes," he said. "Employees benefit from greater visibility into work opportunities and options to build skills and experiences toward career growth. Managers or project leaders benefit from more flexible staffing and improved talent visibility."

Emerging (and Overlooked) Tech Expands

HR leaders will deploy more emerging as well as historically underutilized HR technologies in 2023 to enhance the employee experience, improve recruiting results and help identify key skills gaps in the workforce.

Kostoulas said "orchestrators and overlays" serve to streamline and unify the HR-related digital aspects of the employee experience across a fragmented technology landscape. "These typically include portals, micro-applications, and low- or no-code tools," he said.

Carroll said employee portals, knowledge management tools and case management tools can provide more relief to HR business partners, people leaders and employees in the year ahead.

"HR needs to move past the 'hand-holding' mindset and leverage these tools to establish a single source of truth, enable more self-service for employee requests, and provide timely and accurate responses to internal customers," Carroll said. "When properly deployed, these tools free up HR to focus on the highest-value and most-strategic activities."

Evelyn McMullen, a research manager specializing in talent acquisition for Boston-based Nucleus Research, said more organizations will benefit from using nascent AI-based tools that help identify existing skills in the workforce. Such technologies can help HR leaders close skills gaps that drag down company performance.

"AI-driven skills graphs and other means of identifying employees' soft and hard skills are at a point where they can be adopted by HR," McMullen said.

Brodeur-Johnson said skills ontology software and related tools will prove increasingly important in 2023. "Tools that help you take a full accounting of the skills and capabilities your people have, as well as what they're most interested in working on, will be a huge help," he said. "We're also seeing companies apply AI-based skills intelligence tools to help them redeploy people or even inform layoff decisions."

Technology to Support Hybrid Work

Technology will play an increasingly larger role in supporting hybrid work as that model becomes a permanent fixture in more organizations, experts said. One challenge to overcome is proximity bias, said Frank Weishaupt, CEO of Owl Labs, a video collaboration technology company in Boston.

"There will be a large focus from HR teams on figuring out how to train managers to actually manage by results," Weishaupt said. "We'll also see the evolution of productivity tracking to more results-based assessments that factor in new functions like creative departments, where quantitative data is more difficult to come by."

Suneet Dua, products and technology chief revenue and growth officer for consulting firm PwC, said there will be a greater emphasis on benchmarking tools and new methods to track productivity and performance of hybrid workers in 2023.

"Benchmarking tools collect numerous data points, from measuring employee sentiment to tracking the number of employees using office spaces or training tools," Dua said. "In terms of productivity and performance, we're already seeing many companies implementing tracking methods for remote workers or developing plans to do so."

But Dua cautions that excessive employee tracking can erode worker trust. "HR leaders interested in tracking productivity should prioritize more-meaningful metrics, including the quality and quantity of employee output," he said.

New Applications of AI Grow ... Along with Regulatory Scrutiny

As HR seeks to do more with less in 2023, the use of AI will grow to include recruiting, identify skills gaps in the workforce, analyze engagement survey data and answer employees' frequently asked questions.

"Using AI to analyze worker data beyond traditional demographic and performance metrics will be one key in 2023," said Erin Spencer, a senior research analyst specializing in HR technology for Deloitte Consulting. "More HR departments now view their workforce data as a strategic asset to help guide key business and talent decisions in areas such as upskilling, scheduling, staffing and more."

Companies also will begin to find real-world applications for "generative AI," like the much-ballyhooed ChatGPT, a recently released tool from OpenAI that not only acts as a search engine but can perform complex tasks like writing essays or computer code. Such leaps in the technology, along with a continued lack of transparency from some HR vendors about how their AI tools work, will result in more regulatory and legislative scrutiny in the coming year. For example, a New York City law will go into effect in April 2023 that requires employers in that city to conduct an independent audit of AI tools they use for employment decisions.

"As more federal guidance is introduced, as with the recent White House 'Blueprint for an AI Bill of Rights,' we expect to see increased clarity around legislation and how it's intended to enable the harnessing of AI for the good of humanity," said Eric Sydell, executive vice president of innovation at Modern Hire, a recruiting technology company in Cleveland.

Improving Management Skills, Alleviating Workloads

Experts believe companies will turn more frequently to tools like online coaching and learning platforms to help managers build the skills—and resilience—necessary to lead in increasingly challenging environments. Organizations also will introduce more AI and other automated tools to remove manual or nonessential tasks from managers' plates.

David Hassell, CEO and co-founder of 15Five, a performance management technology platform, believes companies will place management training center stage in 2023. "With record-breaking burnout and phenomena like quiet quitting, skilled management is today's success-defining element," Hassell said. "In remote environments, interpersonal relationships can suffer or never form in the first place. Manager training is key to helping keep people engaged, motivated and productive."

David Somers, a group general manager with Workday, also believes supporting and retaining front-line managers will be a top priority in 2023.

"The tight labor market and long tail of the pandemic have put front-line managers under incredible pressure," Somers said. "HR leaders will focus on ways to retain this critical part of the workforce by automating repetitive tasks such as managing payroll and labor, and by leveraging data such as schedule quality and productivity to understand managers' unique needs."

Employee Experience: No Longer Just an HR Strategy

More C-level leaders will make the employee experience a broad strategic objective in 2023, experts say, removing it from its human resource silo. "Employee experience has become a business strategy, not just an HR strategy," Kostoulas said.

For HR, that means aligning its technology system with the key tenets of an employee experience strategy. In 2023, more companies will make the employee experience integral to IT, operations, finance and facilities strategies, he added.

"In 2023, HR leaders will leverage new technologies focused on the individual employee experience," Spencer said. "Technology has to create benefits across an organization, whether it's through increasing access to data, upskilling talent to work beyond traditional boundaries, or providing enhanced learning and development opportunities."

Recruiting Tech: Video, Programmatic Advertising and Marketing Automation

Recruiters will deploy evolving AI tools to create even greater efficiencies in candidate screening and interview scheduling, use more programmatic advertising and turn to employee-generated videos to attract candidates in what will remain a highly competitive recruiting landscape.

"With recent labor shortages and the need to improve long-term employee development and retention, improving top-of-the-funnel recruiting processes will be a top priority for HR and talent acquisition leaders," McMullen said.

She said approaches like programmatic job advertising that can strategically deliver ads to the right prospective candidates will be valuable in 2023. "That will be important as the economy faces uncertainty and employers must maximize the efficiency of their job advertisement budgets."

Yarnot said recruiters need to double down on creating an engaging candidate experience this year. "Whether we enter a recession or not, top candidates will always have choices and opportunities," she said. "Every recruiting leader should apply for a job on their career site via a mobile device to experience it from the candidate's perspective. They should then make changes to ensure that process takes less than five minutes."

Yarnot said recruiting leaders also will benefit from more strategic use of video in 2023. "Authentic, employee-generated videos result in the most engagement from candidates," she said. "As such, recruiting teams should use videos in job ads, on a career site, in candidate e-mails and throughout the hiring process. The videos should communicate your values, tell your employees' stories, introduce candidates to your leadership team and explain the hiring process."

Learning and Development: Focus on Analytics, Personalized Learning and VR

Experts say L&D functions will have three main areas of focus in 2023. One is creating more personalized, contextual and adaptive learning experiences for employees. "That's anything that can help ensure employees are getting exactly the learning they need, when and where they need it, especially at scale," Wentworth said.

L&D teams also will seek out software tools that make it easier to derive actionable insights from the learning data they collect, Wentworth said. "They need data analytics tools that match the data analysis skills of their teams," he said.

Janice Burns, chief people officer for Degreed, a skills-building platform headquartered in Pleasanton, Calif., said she expects to see more L&D functions introduce data science and business intelligence tools to their teams.

"L&D leaders have an unparalleled opportunity to gather a wealth of data created through digital learning to provide a dynamic overview of the skills being built in the workforce," Burns said. "Overlaid with HR and recruitment data, this can be used to determine skill gaps and spot opportunities where L&D can help businesses meet their goals by ensuring the right people have the right skills."

Wentworth said L&D functions also will continue to invest in or upgrade virtual reality (VR) technology in 2023. The confluence of lower equipment costs, increased processing power and enhanced bandwidth make VR simulation tools more practical than ever, he said.

"People need to be able to practice new skills and behaviors without the consequences of on-the-job interactions," Wentworth said. "Simulations can be leveraged for anything from sales techniques to difficult conversations to DE&I [diversity, equity and inclusion] training."

Dave Zielinski is principal of Skiwood Communications, a business writing and editing firm in Minneapolis.

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