Is The HR Tech Gold Rush Over?
Digital innovation influences all aspects of the workspace and many tech start-ups started their journey with the goal of advancing people operations, and help solve some of our organizational problems, offering companies better ways to engage with their employees and create better business outcomes.
…HR in our view has proved itself somewhat resistant to digital change and transformation, and some of the current bottlenecks are due to;
- failing to acknowledge the need for transition periods longer than the norm, or
- implementing a software tool that just does not align with the rest of the systems that are currently being used.
Changing mentalities and the human approach to work itself, is far more complicated than implementing HR Tech; that new app or switching to an improved mobile technology.
People talk about the last decade or so of technological advancements as of a gold rush, one that sees investors frenetically chase each promising (HR Tech) Start-Up, pump it with capital, and watch it grow, hoping to become the next Google, Facebook, SAP, IBM.
Although the Silicon Valley keeps attracting bright minds and over-optimistic venture capitalists, the bubble is slowly deflating, now obeying the same ‘old rules’ that dictate what eventually happens in any market. The same way the auto industry is dominated by giants that seem immovable, the world of (HR) tech is racing – head on – towards monopoly, or at least a competition reserved for only a couple of MVPs.
Most of the HR Tech Start-Ups have been off to a good start and some are enjoying amazing rounds of funding (YES!), but we already saw some great Start-Ups (focusing on smaller/medium size businesses) ending up digested by the companies at the top of the HR Tech trophy chain.
Giants of the Technology world learned this lesson in the 1980/90’s and did whatever it took to keep the market for themselves — by crushing any form of competition. Even Google itself came close to such a fate, as its creators, Larry Page and Sergey Brin, almost sold the company for a mere $1 million in 1999. Even smaller enterprises that survived longer periods on their own, who became landmarks of the HR industry, eventually succumbed to the temptation of generous $$$ bids. Microsoft acquired LinkedIn for $26.2 billion, showing that money is not an issue when tech giants battle for vital resources that can help them expand their pool of services into the people niche.
Some Start-Ups we speak to, see their window of opportunity narrow down, as entrenched Tech giants prepare a fierce defensive and also as technology gradually is losing some of its novelty character and becoming the new “normal”. Although the industry is still flooded with new (app / software) founders and investors, the rule for HR Tech survival is simple and remains the same – build a small company with a loyal client base or grow big enough (quickly) or disappear in the long run…
Or for the lucky unicorn (we keep our fingers crossed X) a Tech giant will buy them up – yet, likely losing the foundation of why they build the HR software tool in the first place.
Shifts In HR Transformation
Despite the so-called gold rush formally ending (in our view), business owners still need to keep an eye out for the applications that do work 😉 and which can give organizations that cutting edge.
The last couple of years confirmed the focus on the “consumerisation of HR,” which translates to companies wanting to offer their (and potential) employees a consumer-style experience. The Employee Experience approach is centered on the individual as a whole, and this means that we have to change the People Operations function through the use of new technologies – digital transformation.
[The employee experience includes tailoring the physical environment of the workspace, personalizing the tools and technology that enable cooperation, and setting productivity goals that are coordinated with one’s unique set of values and work philosophy – creating meaningful connections]
Applications that focus on Agility are also worth watching, as more companies formulate the need – for example, to go through the recruiting process at a faster pace and with reduced unpredictability.
Taking this Agile approach is desirable not only in Talent Acquisition, but also in learning, and personal development. Quite a few companies now invest in a digital platform that enables an employee to acquire knowledge, skills, or view elements of the company’s corporate culture online, often making use of channels – like Social Media that were previously viewed as “undesirable”. Such businesses, understand that – human capital is like a muscle that needs constant training, keeping up with the rate at which Modern HR change is happening.
We are also seeing the undeniable rise of HR applications that handle People Analytics. Companies are interested in smart ways to monitor real-time engagement and, break down the alchemy of success into processes that can be identified with correlations.
So yes, the gold rush is over and employers have learnt now (some the hard way) that HR Tech tools do not make an amazing workplace – it is the people that use these tools – that make it productive… and companies are now looking at integrating systems that really match their authentic business direction.
The HR application of tomorrow will be the one that replaces rigid with basic custom-tailored and adds value to any organization, whether small or big!
© New To HR