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Over the last decade there has been a tremendous change in HR technology as we have shifted from licensed software to cloud-based systems and now to mobile apps.
As this technology architecture has changed, the needs of businesses have changed as well–leading to a new market for HR technology, one I believe is reinventing itself before our eyes, as I wrote for Forbes six months ago.
Decades ago, we used to think of HR systems as systems of record. They were mainframe or client/server systems that stored all the vital data about our employees; they were supposed to be kept for decades into the future; they held critical financial data, including salary histories, job histories, and benefits and bonus histories; and important compliance data for payroll, tax, anti-discrimination and other government policies. As the Internet evolved and we started using PCs and web browsers to access systems, the HR software market shifted toward systems of engagement. During that period, we saw an explosion of growth in talent management software, as companies needed help dealing with the war for talent.
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During that phase we saw hundreds of software companies building applicant tracking systems, learning management systems, performance management systems and, later, compensation and integrated talent management systems. All these systems were designed to be used by employees (the prior generation of systems was primarily used by HR) so they had to be easy to use. Vendors and HR departments focused on buying systems that employees would find attractive and easy to use.
As this shift occurred, we tried to buy and build systems that employees found useful. We deployed lots of learning management tools, user profiles, social systems, goal-setting systems and tools for employee screening and interview management—all with an intention of making employees' work easier. I'd say that we were somewhat successful in this effort, but what we discovered is that most employees don't really like doing "HR stuff" that much, so they only used the software when they had to. In a Bersin by Deloitte 2014 study of performance management software, for example, we found that 86 percent of companies felt that their goal-setting systems were "not worth the time they put into them."
Companies eventually reached a point where mobile apps, video and consumer-based systems became so popular that people just stopped using these older systems. (For example, most companies tell me that today their learning management system is only used for compliance purposes.)
This created a new market, the one we are seeing today: a market for HR tools that drive productivity and actually make work easier! This third wave, which is built largely around mobile apps that recommend actions and present easy-to-use data, is a huge change for HR.
I talk with HR software buyers all the time, and more and more they ask, "How useful will this be for employees or managers to get their jobs done?" If the answer is "not very useful," the chances are that the system won't be utilized very much.
We are in an amazing new time for technology: New tools like Slack, Workplace by Facebook, HipChat and dozens of other innovative new tools are starting to change the way we work. These are tools that make collaboration easy, reduce the constant flow of noise that comes from e-mail and are more familiar to people who grew up on social networks. And, yes, they can do lots of HR things, too (often through plug-ins or embedded apps).
The future of HR software is now very clear. We need to build and buy systems that make work easier; make life better; and help us learn, give feedback, collaborate and get aligned. These new systems are built as mobile apps, they require little to no training, and they are so engaging you can use them while standing in line at the coffee shop. If your new tools do these kinds of things, you're in good shape. However, if they're "easy to use" but not very "useful," you probably have some work to do.
Josh Bersin is founder and principal of Bersin by Deloitte, Deloitte Consulting LLP. He is a published author on the Forbes website; is a LinkedIn Influencer; has been quoted by Bloomberg, NPR and The Wall Street Journal; and speaks at industry conferences and to corporate HR departments around the world. He is also the keynote speaker at The SHRM India HR Tech'17 Conference & Expo in April. Contact him on Twitter @josh_bersin and follow him at www.bersin.com/Blog/.
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