Global HR analyst Josh Bersin says the HR tech market has never been more diverse and exciting.

Technology has kept many businesses running throughout the rollercoaster ride that has made up the last 16 or so months. Technology has helped employees stay productive and connected regardless of their working locations. Technology is currently being used to create safe workplaces and support returning to work processes. To address critical hiring needs, technology is also being used to revamp recruiting and onboarding.  

In addition to reinforcing our reliance on technology, this last year has also shown the importance of tearing down functional siloes and working across the enterprise to take full advantage of technology innovations and investments, to provide more holistic employee experiences and to use comprehensive analytics to guide and expedite workforce-related decisions.  

HR tech vendors are moving from systems of record to systems of design

The last year has proven the importance of adaptable technology. Companies have had to come up with solutions to unanticipated needs in days or weeks, not months or even years.  HR organisations, in particular, have faced unprecedented challenges. Those solutions that are easy to implement, customise and use have been big winners. In fact, HR investments are rapidly moving away from systems of record (think learning management systems and human resource management systems) to systems of design. New offerings from Microsoft (Viva), ServiceNow(Quebec release), WorkdayOracle, and SuccessFactors are in response to HR’s demand for tools that give them the ability to rapidly adapt to ever-changing workforce needs and to provide highly personalised and relevant employee experiences.

Microsoft’s entry into the HR market has the potential for massive disruption

It’s hard to think of a technology vendor that isn’t impacted by this year’s introduction of Microsoft Viva, an employee experience platform that integrates with Microsoft 365 and

Microsoft Teams and  brings together communications, knowledge, learning, resources and insights. Learning platform vendors will have no choice but to integrate with Viva Learning and Microsoft Teams. Content companies are building Viva-enabled search and discovery. Communication, productivity, and wellbeing tools are developing plug-ins. 

Microsoft Viva is meant to solidify Teams as a central hub for work, taking on communication and collaboration rivals such as ZoomSlack and Google while expanding its productivity technologies further beyond the core Microsoft Office suite.

Microsoft has about a 47.5 percent market share worldwide for office productivity software, so this is a new offering that can’t be ignored by the business world; it promises to have a massive impact on the HR tech market.  

Skills engines and internal talent marketplaces are rapidly being adopted

Coming out of nowhere, these technologies are now available from most ERP and HCM vendors as well as new market entrants. These solutions look to identify and catalogue employee skills, help employees grow their careers and look for new opportunities, and identify employees with skills to take on new projects or new jobs.  

The learning experience platform (LXP) market is now the most important design centre for corporate training, and every LXP has its own built-in skills engine. Many companies are looking for integrated skills technology, enabling newer vendors like GloatHitchEightfoldFuel50, Workday, and others to disrupt the market.

We’ve talked with leaders from companies such as SAPPepsiAllianzStandard CharteredNetAppVerizonCitibank, and P&G – all of which are piloting skills taxonomies and talent marketplace platforms. With the talent shortages we’ve recently been seeing, implementing these solutions is becoming critical.

ServiceNow, employee portals and service-delivery platforms are white-hot

As we enter a world of hybrid work, companies need systems to schedule desks, monitor safe workplaces and manage travel, location and system access (the average large company has around 120 employee apps). Employees want self-service tools and workflow management platforms for their day-to-day routine and career journeys. The ERP vendors have not focussed in this area until recently (Ultimate acquired PeopleDoc in 2018), opening the door to ServiceNow, Microsoft Viva, and solutions such as Embark from Willis Towers Watson. Oracle is also looking to be a big player in this space.

ServiceNow is becoming a platform for citizen developers with functionality that enables teams to build employee apps without learning how to code. One reason I think ServiceNow is so disruptive is due to its strong ties to IT. We are now in a world where HR tech, work tech and messaging and communication tech are all integrated. That means no one should buy HR tech without partnering with IT.

Employee listening tools are becoming essential to enterprise infrastructure

Vendors like QualtricsMedalliaGlintPeakon (Workday), PerceptyxCulture Amp, and dozens of mid-sized vendors are revolutionising the world of employee voice. For instance, Microsoft Viva Topics can identify experts in the company from their documents and activities, and Microsoft Viva Insights can help managers see when employees are over-worked. We now have an entire industry of survey feedback, listening and crowdsourcing tools in the market, many of which are worth millions of dollars because of their growth. ServiceNow and Oracle are also getting into this space.

In the not-too-distant future, we’ll see streams of learning in the flow of collaboration”

While most companies now have HR data lakes and data warehouses for storing people-related data, there is now a need to store data from employee feedback and experiences. Vendors like Medallia and Visier are working on this, and ultimately this feedback data will be as well organised similarly to CRM customer data. (Workday Prism Analytics is one solution.) There is a scramble for the front-end tools market, as survey vendors grow and expand. Microsoft could make a big move with Glint here, but players such as Qualtrics, Medallia, and Workday will ensure there is more disruption to come.

The corporate learning market continues to grow

The pandemic and its after effects continue to fuel the $240bn market for employee development. Content companies like SkillsoftLinkedIn Learning, Udemy, O’Reilly, and Pluralsight are growing at double-digit rates. Degreed and EdCast are taking over as centre stage systems for employee learning, with LMS platforms being pushed to the back office. The mid-market LMS market is growing rapidly again, as vendors like Fuse UniversalDoceboTotara, and many others continue to grow.

But the big story is learning in the flow of work. Nearly every learning tech vendor now offers skills-based learning, recommended content and soon-to-come integration with Microsoft Teams. In the not-too-distant future, we’ll see streams of learning in the flow of collaboration, communication and project management. BetterUp, the AI-based coaching platform currently valued at around $1.7bn, is also looking to get into this space.

Other areas to watch

Also likely to impact the HR tech market is the emergence of graph database technology (Neo4j is a hot company); the increasing use of organisational network analysis tools; and the demand for dedicated DEI analytics tools. For instance, NASA has built an entire skills-analysis system for its 15,000-plus engineers and scientists based on a graph database. In doing so, it discovered big skill gaps that could hinder its mission to explore Mars.

Wellbeing-related solutions like CastlightLimeadeVirgin Pulse, and meQuilibrium continue to grow. But a new, more integrated model for managing health and wellbeing is coming. League, a platform vendor positioned as ‘a health operating system’, has built a solution focussed on managing all aspects of health and wellbeing. League, which is partnering with Workday, could start to redefine this fast-growing market.

In summary, innovations in HR tech will allow companies to reinvent and radically improve the employee experiences, boost employee productivity and collaboration, and offer more meaningful and business-aligned employee development. But, gone are the days when HR tech was the concern only of the HR organisation; these benefits can only be achieved through strong cross-functional partnerships.   

Josh Bersin is an internationally recognised analyst, educator, and thought leader in the global talent market. He is the CEO and founder of joshbersin.com and founder and dean of the Josh Bersin Academy.