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The Technology Giants Are Moving into HR

A man working on a computer in an office.

​Facebook, Google and Microsoft are making deeper forays into the HR technology market, leading to faster consumerization of HR technology platforms, increasing competition for existing vendors and giving HR leaders more choices in tech solutions.

In late 2016, Facebook introduced Workplace, a platform that helps employees collaborate and connect internally using chat, group conversations and video calls. It was released just after the social media giant launched its Jobs and Mentorships platforms, on which users search for jobs and find mentors within specific groups on the Facebook network.

Google launched its own job search engine in 2017, and Microsoft shook up the market by buying LinkedIn and then later purchasing the employee engagement platform Glint.

Now come reports that Microsoft is making further inroads in the HR space. Longtime HR industry analyst Josh Bersin wrote in December 2018 that the tech titan has been funneling more investment into its talent platforms. Those systems fall under the company's Dynamics 365 for Talent banner and include Microsoft Attract, an applicant tracking system; OnBoard, which Bersin calls an "innovative" new onboarding platform; and Core HR, an employee record-keeping system.

Bersin wrote that Microsoft's new talent products reflect a trend toward moving HR systems away from back offices and into employees' daily workflow. By leveraging Microsoft programs like Teams or Graphs, companies may be able to turn their core HR system into a different kind of employee system of record, Bersin believes, based not on a hierarchical organizational design but more on how people work daily, on one-time projects or in matrix relationships on constantly changing teams.

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Implications for HR

What does the trend mean for existing HR technology vendors and the human resource leaders who buy their products? Experts said that while Google, Facebook and Microsoft bring the resources and technology sophistication to disrupt the market, they'll also face stiff challenges from more nimble and experienced competitors.

These nontraditional players are seeking new markets for their integrated communications platforms, said David Mallon, vice president and chief analyst with Bersin, Deloitte Consulting, an HR advisory and research firm, and the HR domain represents a logical fit.

"There is a growing recognition in HR and organizations in general that they need to embed functions like learning, performance management, goal setting and engagement deeper into the flow of daily work," Mallon said. "The systems and tools that HR has traditionally used are converging into a space that HR hasn't historically owned in the past."

Mallon said tech companies that have long offered consumers cutting-edge, user-friendly digital experiences are bringing the same expertise to the workplace.

"If you're a company that's already a master of the always-on digital experience, why wouldn't you think the workplace is something you should pay attention to?" he said. "What their arrival will likely do is accelerate the consumerization of technology in HR. Some of these companies will instantly provide a better user experience than many established HR technology providers."

Impact on Data Strategies

The tech giants have been eyeing the HR space for a handful of reasons, one being to gain access to workplace data, said Michael Rochelle, chief strategy officer for the Brandon Hall Group, an HR advisory and research firm in Delray Beach, Fla.

"The data they collect will be valuable in terms of their analytics functions and what they can potentially sell to advertisers," Rochelle said. "These companies understand they'll be even 'stickier' if they can be the provider that offers the best data insights on the workforce. It will give them even more powerful data repositories and benchmarking information."

He said some HR technology vendors are responding by expanding their own data repositories and making that information more widely available to clients and others.

"One of the big trends of the last year was vendors' improving their application programming interfaces to make their systems and data more accessible to others," Rochelle said.  "Every vendor I did a briefing with last year went out of its way to [show how it's making] its data more accessible, useable and valuable."

Dave Zielinski is a freelance business writer and editor in Minneapolis.


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