A design-oriented focus on the employee experience is the prevailing trend in HR technology.
"We continue to move from the old systems of record and engagement to technology which allows you to design systems for your employees," said HR industry analyst and thought leader Josh Bersin, speaking at the Spring HR Technology Conference and Exposition held virtually March 16-19.
"Employee experience is turning the tech market inside out," said Bersin, founder of the Josh Bersin Academy for professional development in HR. "Every company is reinventing its employee experience, so they need tools that simplify, automate and digitize everything. We've gone well beyond building a great portal or mobile app. HR needs creator tools as well as off-the-shelf systems. Collaboration and productivity systems need to be integrated into the daily HR transaction systems, making them easier to use, personalized, data-driven and AI-enabled, so employees can do their jobs and manage their work lives."
Bersin said companies need tools that "fit together like puzzle pieces and platforms that let them build journeys, back-to-work programs, onboarding and transition programs, and well-being solutions easily. In other words, we need platforms that are not only easy to use, but easy to build and customize."
The introduction of Microsoft Viva is another recent major development to note. "It's hard to think of a vendor that isn't impacted by Microsoft Viva," he said. "Learning platforms have to integrate with Viva Learning and Microsoft Teams. Content companies are building Viva-enabled search and discovery. Communication and well-being tools are developing plugins. The wave is just beginning—Microsoft will touch more of the HR stack as Viva matures."
Core HR Systems
The fundamental HR systems that manage employee data, payroll, benefits and attendance are still critical but becoming more interchangeable, Bersin said.
The big enterprise resource planning (ERP) software vendors —Oracle, SAP and Workday—are struggling to keep up with employee experience, he said. "They are systems of record with tremendous amounts of employee data, but they are realizing that they have to open up their APIs and allow HR to use the systems to create and develop employee journeys," Bersin said.
All these companies are very competitive with each other, he added.
Workday continues to expand its footprint, acquiring Peakon, an engagement survey and performance management system based in Copenhagen, Denmark. "The challenge for Workday will be maturing their tools, the skills cloud, the talent marketplace, the learning platform," he said.
Bersin described Oracle's integrated cloud platform Oracle HCM as "one of the most elegant systems, with integrated analytics and help desk, a social network, and an employee experience layer to be introduced in May."
SAP SuccessFactors recently re-engineered its user experience, developing a modern chat-based interface, Bersin said. The company is also about to announce redesigned learning technology.
"I've also been very impressed with Workplace from Facebook, an employee experience app widely used in retail and hospitality," he added.
Skills engines and talent marketplaces are gaining adoption as internal mobility has become a core talent acquisition strategy. "The talent marketplace will change recruiting, turn recruiting inward, giving employees the ability to search for and apply for jobs [where they are already employed], and be matched to jobs, based on their skills," Bersin said. "The new model of talent mobility is centered around agility, opening up the system to give people time to work on other projects, to change roles and participate in developmental assignments. Lots of companies are looking for integrated skills technology, and these vendors have built systems that facilitate the exposure of internal roles and projects. Some, like Eightfold and Gloat, have very intelligent matching systems that match employees based on their experience."
He explained that the talent marketplace is disrupting the markets for both external recruiting platforms and learning systems. "There are dozens of new solutions, and I would not be surprised if the big ERP vendors started buying up some of these talent mobility platforms."
Software that helps employers understand employee engagement feedback has become critical infrastructure. "Employee experience is a multifunctional business strategy, not just an HR issue," Bersin said. "To adapt to that, HR needs listening tools that are just as sophisticated. We learned from the response to the pandemic that the employees know what is going on in the company and what needs to be improved. If we don't listen to them, and pay attention to their journeys, we won't be able to solve employee experience."
Vendors like Culture Amp, Glint, Medallia and Qualtrics are revolutionizing employee voice—as feedback moves from annual and pulse surveys to continuous action platforms. "We now have an entire industry of survey, feedback, listening and crowdsourcing tools in the market, many of which are worth billions because of their growth," Bersin said.
The well-being technology market exploded during the pandemic. About a third of payroll is now spent on noncash benefits; well-being program spending increased by about 43 percent in the last five years, Bersin said. "Ultimately, well-being is about performance. It is no longer a benefit, but a business need. It must be integrated into leadership, management and employee models."
Some of the vendors in this space include Castlight, Limeade and Virgin Pulse.
People analytics tools are maturing, becoming more graphical and much more integrated, Bersin said. "It is becoming a business consulting function that analyzes data on behalf of business leaders and then provides them the answers they need in easy-to-use dashboards. Employers should continue to invest in analytics as a business solution, not just a technology function running reports," he said.