Wednesday, 11 January 2017 12:02

2017 HR Technology Trends

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We are now embracing an era when both enterprise and personal technology options are improving almost by the day. So several important considerations must be taken into account to help decide how our organizations will respond and benefit from new HR and learning technologies. Among them: how overall strategy, corporate culture and existing technology will play into future plans.

STRATEGY:

Strategy is both a key component when it comes to a technology environment and a significant opportunity; for instance, more than 40 percent of organizations are looking at improving or developing a new enterprise HR systems strategy this year. This is a key issue for most organizations.

For large organizations (more than 10,000 employees), the goal is most often to transform the technology environment, creating a more modern architecture that can support new user experiences, mobile access, and full-data analysis requirements. Research has shown that organizations are taking multiple pathways forward and are leveraging this opportunity to rethink their enterprise view of HR technology.

Among mid-market (2,500 to 10,000 employees) and small businesses, HR technology adoption has become a key to success. Organizations with higher-than-average HR technology adoption in these categories saw almost double the revenue per employee, and a 12 percent increase in their overall HR, talent and business outcome metrics. These organizations also are 75 percent more likely to be viewed as strategic partners by their business leaders, and they are 10 times more likely to be in the top 10 percent of organizations when it comes to social responsibility initiatives.

CULTURE:

Three specific HR outcome models — talent-driven, data-driven, and topperforming organizations — can alter decisions. In a world of constant digital change, organizations need to completely rethink their perception of technology investments. In today’s Cloud-based environments, organizations have shown that continuous change management models improve decisionmaking across the entire organization.

Cloud-based technologies also allow organizations to develop more valuable relationships with their workforces, clearly defining their expectations and the employee value proposition in a tailored employee experience.

TECHNOLOGY:

Now that there has been a shift both from vendors and buyers toward Cloud/SaaS HR solutions, foundational technology questions are refocusing. This year’s survey shows a 25 percent increase in organizations evaluating Cloud solutions for non-HR technology, and an increase in large organization initiatives to integrate both HR and non-HR technologies. The key questions for many organizations come down to cost, security and long-term value propositions for a full Cloud solution.

The new non-negotiables are focused on user experience, roadmap strategies, and tailored relationships. For instance, there has been a 40 percent increase to 66 percent of organizations that identify “poor user experience” as their primary reason for giving vendors a low satisfaction rating.

The next generation of technology is meant to be invisible and ubiquitous in our lives, and it’s expected to perform as an intelligent system. More than 5 percent of organizations are already using some form of machine learning, wearables and sentiment analysis tools as strategic parts of their HR systems strategies.

Now for some specific facts and figures, based on Sierra-Cedar’s most recent research:

SPENDING PATTERNS

This year, just 42 percent of organizations believe their spending will increase in 2016–2017, while 7 percent feel their spending will decrease. That represents a slight slowdown in spending plans from last year, but it’s still very healthy when compared with 2013’s spending plans following the recent recession.

Small organizations are the fastest growing segment of “new” HR technology buyers, so vendors will need come to the table with a compelling reason for them to increase spending next year; 57 percent of small organizations are on target to simply maintain their existing HR technology spending. However, each year, smaller and smaller organizations invest in HR technology.

HR SYSTEM EXPENDITURES

On average, total HR technology costs can range from $100 to $500 per employee annually. These numbers change dramatically based on the number of systems implemented, amount of internal resources versus outsourced resources, global scope of an organization, and the complexity of an organization’s service and support needs. These global numbers are generally helpful only as a ballpark figure, but do provide us with a lens through which to review year-over-year annual expenditures per employee — and it might be surprising to note that the total overall HR technology costs have seen a slight decline over the last few years.

HR TECHNOLOGY RESOURCING STRATEGIES

Knowing that spending doesn’t provide the only indicator of what an organization can accomplish when it comes to its enterprise HR systems strategy, a new question was added concerning an organization’s plans to increase or decrease certain roles across their HR function over the next year. Immediately, corporate learning and development initiatives claimed the top position for increased hiring plans for 37 percent of the organizations that responded to the survey — and only 5 percent plan to decrease these initiatives.

Following just behind L&D was 33 percent of organizations planning to invest in hiring HR data analytics personnel. Twenty-nine percent of organizations also plan to increase talent management headcount this year.

IMPLEMENTATION PLANS, TIMELINES, MODULES

Fewer organizations (17 percent) are planning to make solution changes in the next 12 months as compared to previous years, but more are planning movement over the next 24 months. Organizations with low user experience scores are four times more likely to have near-term plans to replace their current vendor.

Once an organization has decided to either replace or upgrade an existing solution, the next focus becomes timelines and costs. Implementation timelines have been a constant challenge for organizations dealing with on-remise solutions, particularly for large global organizations. Two- to three-year implementation timelines for enterprise-wide HRMS environments were not uncommon for organizations, especially when these solutions were implemented alongside other enterprise-wide solutions.

In the last few years, we have seen a decrease in overall implementation timelines, particularly for licensed environments, but also for Cloud/SaaS solutions. Less customization, greater access to APIs, and pre-developed connectors for integration, along with more adequately trained implementation partners, have all led to a reduction in overall implementation timelines over the past three years.

At this point, there are fewer onpremise implementations than Cloud/ SaaS implementations, since very few organizations are aggressively selling their on-premise solutions.

LEARNING APPLICATIONS

Because of complex learning needs, large and medium organizations are much more likely to have high levels of learning application adoption over small organizations. Sierra-Cedar anticipates continued shake up in the learning space over the next few years as enterprise software packages continue to invest in their new learning solutions, and many niche learning players coming out of the consumer learning space (like Degreed) are trying the change the concept of who owns an employee’s learning record.

Although Cornerstone OnDemand focuses heavily on its talent management modules, it continues to be one of the largest providers in the learning space and holds the highest level of application adoption at 19 percent; for large and medium organizations, Cornerstone OnDemand sees an increase forecasted adoption in the next 12 months. Other companies that are expected to grow substantially are SuccessFactors Employee Central, Saba, Health Stream, Oracle HCM Cloud (which is being rolled out separately from the Oracle Taleo/Learn solutions). Moderate growth is likely to come to NetDimensions and SilkRoad.

SumTotal and Skillsoft — now combined organizations — continue to hold large adoption shares in learning across all organization sizes. It is likely that many organizations use Skillsoft as a secondary learning solution along with their primary learning management system (LMS), but decreases are projected in adoption rates for this vendor for both applications.

—Research for Sierra-Cedar conducted by Stacey Harris, vice president of Research & Analytics and research consultant Erin Spencer. The “Sierra-Cedar 2016-2017 HR Systems Survey White Paper, 19th Annual Edition” can be found at www.sierra-cedar.com/wp-content/uploads/sites/12/2016/10/Sierra-Cedar_2016-2017_HRSystemsSurvey_WhitePaper.pdf

--By Jerry Roche

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