The HR tech market categories to watch this year
The old saying goes that the only two things we can count on are death and taxes. I would like to add a third: the continued evolution of HR technology.
As I look ahead to 2023, I see the strengthening of several existing market categories and the emergence of other new ones. I will be talking about these categories, and much more, in my upcoming keynote at HR Tech Conference Virtual, which runs from 28 February to 2 March 2023.
Meanwhile, here is a preview of the categories to watch:
- Employee experience platforms. Largely created by ServiceNow and then popularised by Microsoft Viva, this is a massive, high-priority product category. Vendors in this category offer deep functionalities that enterprise resource planning (ERP) and human capital management (HCM) vendors simply cannot offer. Employee experience platforms (EXPs) are sorely needed to manage the workflows related to hybrid work, employee listening, onboarding, and custom career and development work going on today.
- Talent intelligence platforms. These are artificial intelligence (AI)-powered data platforms that help companies with sourcing, internal talent matching, intelligence succession management and data-driven solutions for assessment, job design and skills analysis. These systems (including Eightfold, Gloat, Beamery, Phenom, SeekOut and iCIMS) all offer new, high-value offerings. Their ERP counterparts simply are not there when it comes to matching capabilities.
Talent marketplace and career pathway solutions—offered by companies such as Gloat, Fuel50, Guild Education and EdAssist—are in a subset of this category. These companies are responding to urgent needs for intelligent career management, internal job mobility, job matching, mentoring and other talent challenges. In many ways, these are the talent management platforms of the future because they connect employees to learning, mentors, developmental assignments and jobs. Unlike the old “hire to retire” systems that tried to do this with competency models, these are highly dynamic systems that can infer skills and interests and identify opportunities identified through the use of AI.
- Lifecycle employee listening systems. Solutions in this category are becoming more and more robust. If you look at survey platforms like Qualtrics, Perceptyx, Medallia, Glint and Workday Peakon, you quickly realised they are really data analytics platforms first and survey platforms second. They collect data from many sources (including passive data from email traffic, calendar schedules, voice feedback and even video), providing a comprehensive view of employee sentiment, satisfaction, engagement and, ultimately, productivity. Recently, BetterUp acquired Motive, Visier acquired Yva.ai, and Perceptyx acquired Cultivate; they all have the common goal to build out advanced passive listening systems. Microsoft Viva Insights is also moving in this direction. I have high hopes for this category because employee listening is core to understanding productivity and employee retention.
- Capability academics/mastery learning platforms. These solutions offer employees a centralised destination for browsing content, finding experts and mentors, taking courses, and deepening skills or learning new ones. Also in this space are solutions for creating learning content, for cohort-based or collaborative learning, and for providing AI-powered coaching networks.
- Talent acquisition suites. Although recruiting will slow this year, we will continue to see rapid innovation in this space. Solutions offering interview intelligence, video interviewing, and technical and soft skills assessments are among the “must-have” functions for modern recruiting. Leaders in this category include Modern hire, Paradox, HireVue and Outmatch.
- Contract worker management platforms. In too many cases, contractors are still managed by purchasing departments using vendor management applications, and contractor data is not integrated into enterprise HR solutions. I believe in 2023 we will finally start to see these systems come together with core human resource management systems (HRMSs) as contract and gig work continues to grow. For instance, contractors can make up 40-60% of workforces in pharmaceutical, tech and distribution companies. These individuals need scheduling systems, payroll support, various forms of onboarding, benefits and information security. Hot vendors in this category include Magnit (formerly ProUnlimited), the largest; Legion, offering one of the most exciting platforms; VNDLY, now part of Workday; SAP Fieldglass, now integrated into SuccessFactors; and Beeline, a market pioneer.
- Conversational AI. We will definitely see exciting innovation in this category. With solutions like Olivia (from Paradox), you can market, screen and even hire people with almost no human involvement. Take that type of technology, add an AI engine like that developed by GPT-3, and we have a huge new set of tools for HR service delivery, case management, recruiting and eventually coaching and learning. Vendors like ServiceNow, Microsoft, Workday, Oracle and SAP beef up this tech in 2023.
- Workspace management. This is another category we could see emerging in 2023. Now that hybrid work is here, companies need a way to schedule rooms and offices, procure AV and other equipment for various types of activities, organise and schedule teams. Facility managers need tools to monitor room and location utilisation and better plan for hybrid work needs. HR teams want to help employees work wherever it is most productive for them and for the company. Vendors like ServiceNow, Cisco and Microsoft are seeing the potential for AI-enabled solutions that can help manage utilisation, scheduling, employee location, equipment and more.
While overall HR tech spending will probably slow, some of these categories will see growth. Buyers will need to make wise choices of where to invest—and that will require in-depth research into various product offerings, vendor satisfaction trends and product plans. As always, I strongly advise developing technology expertise within HR teams and strong relationships with enterprise IT.
I will get into much more detail in my upcoming conference keynote, HR Technology 2023: The Disruption Continues, slated on 28 February 2023.
About the author: Josh Bersin writes HRE’s HR in the Flow of Work column. Bersin is an analyst, author, educator and thought leader focusing on the global talent market and the challenges and trends impacting business workforces around the world. This article was first published on Human Resource Executive.
Bersin will be speaking live from USA at HR Tech Festival Asia 2023, which is taking place at the Suntec Singapore Convention and Exhibition Centre from 10-11 May 2023. Together with a lineup of global and regional thought leaders and HR luminaries, he will provide key insights into what is shaping the way we work.