The Keys to HR Tech in 2021

Given all that’s transpired during 2020, making predictions seems like a particularly dicey proposition. But one thing’s for sure: Employers must begin the new year anticipating how their markets, customers and employees will react to the crises that began over the last 12 months.

Ian Campbell, CEO of Boston-based analyst firm Nucleus Research, expects that next year “will see many of the long-term technology and business implications of the pandemic come to fruition.” Meanwhile, analyst Josh Bersin, speaking during October’s (virtual) HR Technology Conference, said the COVID-19 pandemic led to a “big reset” to the world of work. “Companies are redesigning the ways things get done at a pace I’ve never seen,” he said. “They’ll need technology to support their efforts.”

During 2020, the coronavirus caused a spike in remote work, encouraged growth in digital recruiting and sped adoption of electronic payroll and touchless technology. While these areas all received much attention, broader shifts became evident as both employers and HR technology vendors re-conceptualized some foundational approaches to work. Wherever technology touches the workforce, they paid close attention to flexibility, productivity and integration.

How will that focus manifest itself during 2021? Consider …

Simpler Workflows, Less Distraction

The increase in dispersed workforces has sharpened demand for tools that are simple to use, streamline work and minimize distractions. For example, Nucleus Research believes the use of iPaaS (Integration Platform as a Service) and low-code platforms will grow as employers seek to make each individual more productive.

That focus on productivity involves more than tools, however. As Bersin pointed out, workers at home are torn in a number of directions: Their kids need one thing, their boss wants something else, the system goes offline, a deadline looms. This dynamic, he believes, will encourage more vendors to integrate HR tools into work technology. “HR has to be a feature of the work, not a destination outside of the work,” Bersin said.

That idea has given momentum to the idea of presenting solutions or content in the flow of work, at the moment something is needed. Such efforts first became apparent before 2020, though they moved into the mainstream this year. Both ADP’s Next Gen and SAP SuccessFactors HXM, for example, present users with more options within a single session, avoiding the need to toggle between solutions.

Shifting to ‘Work Technology’

Such approaches are about flexibility and productivity. But as Bersin said, while the range of productivity solutions is growing, companies still need adaptable platforms. As a result, “HR technology” is shifting toward becoming “work technology” and platforms are becoming more like Swiss Army knives and less like chainsaws.

That transition is evident in the UK-based Fosway Group’s 9-Grid for Cloud HR. In brief, a growing number of smaller, specialized products have entered the market even as full-blown HCM suites became more powerful. As a result, employers are taking more of an “ecosystem approach” to HR technology, assembling packages of solutions tailored to their needs.

Integration Table Stakes

That hints at the other dynamic: integration. The idea of connecting one platform with another is nothing new to HR technology, and the willingness of brand-name vendors to partner with specialized developers has been a major factor in the industry’s growth.

When small companies partner with the likes of ADP, UKG or SuccessFactors, they’re put in front of a qualified customer base and given a strong set of bona fides. From the larger company’s point of view, making specialized tools available provides customers with a flexibility the large vendor might not be able to achieve on its own.

Focusing on flexibility, productivity and integration may not, by itself, result in a passel of dramatic product announcements. But it will certainly drive HR technology’s development in the months and years to come.

2020’s Top HR Tech Developments

The coronavirus, Black Lives Matter and the U.S. presidential election all impacted (dare we say, stressed out) HR departments during the year. But within the narrower HR technology world, these developments reverberated.

1. Salesforce Buys Slack

On the surface, Salesforce’s acquisition of Slack isn’t really a story about HR technology. But it is when you consider those three dynamics: flexibility, productivity and integrations.

In December, Salesforce, the San Francisco-based provider of customer relationship management solutions, announced it would acquire the communications platform Slack, also in San Francisco, for $27.7 billion. The company said the merger would create an “operating system for the new way to work.”

Because it does a neat job of enabling both internal and external communications, Slack’s often described as an important contributor to corporate culture and employee experience. The platform also plays well with others. It offers integrations to a wide variety of solutions in areas such as file sharing, productivity, calendars and marketing. Already users can access HR solutions such as UKG and Workday through its interface. That allows workers to complete tasks related to, say, payroll or time off without switching out of a tool they interact with throughout the day.

Salesforce CEO Marc Benioff has made no secret of his goal of extending Salesforce’s reach into almost every area of business operations. He calls Slack “the interface to everything.” Partnerships with Slack could prove critical to HR tech vendors who want to expand their reach while simplifying deployment.

2. Ultimate Software and Kronos Merge

In February, Weston, Fla.-based Ultimate Software and Lowell, Mass.-based Kronos Incorporated, both controlled by the San Francisco private equity firm Hellman & Friedman, announced their plan to merge into a single HR technology giant. The resulting company boasted $3 billion in revenue, more than 12,000 employees, an enterprise value of $22 billion and a product line that ranged from nuts-and-bolts workforce management to the finer points of HCM.

Analysts said the merger played to each company’s strengths. “These organizations are very similar in terms of revenue, culture and headcount,” said Pete Tiliakos, principal analyst with Boston-based NelsonHall. He and other analysts observed that the companies’ respective customers fit neatly together, with Ultimate’s leaning toward the enterprise and Kronos enjoying a greater presence among smaller organizations.

In August, the company unveiled its new brand—Ultimate Kronos Group, or UKG. At the time, CEO Aron Ain said his goal was to create a unified organization. “Two years from now, there won’t be different platforms and different products and different billing systems and different business cards,” he said.

The merger left the market with one less vendor holding large enterprise ambitions, said Holger Mueller, vice president and principal analyst at Constellation Research in Monte Vista, Calif. As a result, he expects more enterprises to consider Kronos as an HR tech option while smaller employers will have fewer choices from their usual short list selections of ADP, Ceridian and Kronos.

3. Retention Becomes Mobility

When iCIMS relaunched itself as iCIMS Talent Cloud in October, the company added a module designed for internal recruiting and signaled its intention to move aggressively into the market for identifying and developing existing talent. According to CTO Al Smith, the core capabilities of the module were already in place, but the company had never packaged them as one or invested real dollars into their development.

iCIMS became one of many vendors who set their sights on developing new business from employers who want to leverage the talent they already have. In March, Phenom added an internal gig marketplace to match short-term projects with current employees who have the right skills. Also, Phenom and learning platform Docebo unveiled an integration to help customers better identify skills gaps, then deliver training content.

Investors have shown interest in the mobility space, as well. In June, the social learning platform Degreed raised $32 million in new funding, attributing investment to rising demand for training and educational solutions. “We’ve seen a tremendous surge in client demand for our career mobility product,” noted CEO Chris McCarthy.

Degreed planned to use the funds to accelerate its career mobility roadmap. It believes that most employees don’t complete the talent profile included in their organization’s HR system, hampering businesses as they try to intelligently deploy their workforce. One of the company’s aims is to help employers plug this gap, thus promoting career mobility by connecting users to project, gig and job opportunities. That’s become an increasingly common theme among both talent acquisition technology providers and learning solutions.

4. Virtual Campus Recruiting Becomes a Thing

Providers of virtual campus-recruiting technology saw a jump in customer interest as employers shifted their talent acquisition efforts online. One of them, San Francisco-based Turazo, said its sales conversations picked up notable speed as shelter-in-place directives came down and employers struggled to connect with new talent, even as college campuses shut down. “They have no way to really match well and have a good, engaged conversation with those types of prospects,” said CEO Peter Cipollone.

In April, Paradox and Eightfold.ai announced products designed to connect organizations with candidates they previously would have met in person. Paradox’s Virtual Hiring Events product helps employers engage with candidates through a chat-based interface. Eightfold’s Virtual Event Recruiting invites candidates to events, suggests appropriate positions and schedules conversations with recruiters.

Cipollone believes the COVID-19 pandemic forced a structural change to recruiting, especially at the early talent stage. “So much of the early interaction involves companies sending people out to campuses to actually physically interact with students,” he observed. “Whenever this is over, I think it’s going to be done in a completely different way.”

About the Author

Mark Feffer is executive editor of RecruitingDaily and the HCM Technology Report and an award winning journalist. He has been writing about Human Resources and technology since 2011 for outlets including TechTarget, HR Magazine, SHRM, Dice Insights, TLNT.com and TalentCulture, as well as Dow Jones, Bloomberg and Staffing Industry Analysts. He likes schnauzers, sailing and Kentucky-distilled beverages. Connect with Mark Feffer: