More Employers See Need For Diverse ‘Ecosystem’ in HR Technology

Covid-19’s disruption of business operations has also spurred innovation throughout the HR technology industry as vendors revised roadmaps to help employers cope with fundamental changes to how and where work gets done.

At the root of the change was employers’ growing belief that HR can’t operate at peak efficiency or effectiveness if it relies on a single system of record. That’s according to the Fosway Group, a UK-based analyst firm focused on Europe.

While HCM suites have become more powerful, an increasing number of specialized products have entered the market to streamline, or even transform, how key processes are addressed, Fosway said. As a result, a “new ecosystem approach” allows companies to combine narrowly focused solutions with more traditional platforms.

The company’s 2020 Fosway 9-Grid for Cloud HR examined both HCM suites and specialized solutions, thus encompassing both traditional and next-generation approaches to people management, employee experience and old and new talent processes.

Impacts on Business and HR

The challenges arising from the pandemic were neither included in 2020 business continuity plans or in vendors’ roadmaps, the report notes. However, vendors have managed to refocus their efforts to assist employers with new demands by developing solutions in areas such as video interviewing, virtual onboarding, digital learning, shift management and workforce supply. As a result, the report said, “[d]espite a steep learning curve for corporate HR teams and suppliers, full digital transformation is now a reality.”

Meanwhile, HR finds itself in the thick of things in a way it never has before. Because of the pandemic, HR leaders are more involved in strategic decision-making, and corporate leadership regards the CHRO’s expertise as “critical” to managing costs, keeping operations going and planning for a return to work.

Platforms and Performance

In terms of solutions being used, Fosway found that 60% of European enterprises operate with HR technology suites that are only partially standardized. Given the number of companies that have decentralized their approach to HR, that makes sense. At the same time, these companies aim to improve the performance and impact of HR on an organization-wide basis. That requires managing technology solutions across the ecosystem, rather than by silo, the report noted.

It also makes sense that HR teams would want to make their solutions as close to frictionless as they can. By adding digital capabilities, they can streamline processes, increase their impact and ease the frustration felt by the workforce. In particular, the report observed, vendors and employers both aim to deliver HR services in the flow of work, and integrate them with productivity tools.

And although user experience remains important, it may not be “the critical differentiator that many believe,” the report said. Solid UX are quickly becoming table stakes, Fosway suggested, but reducing friction as part of that experience is taking priority. One result of that may be that HR systems become less visible as more tasks become embedded into the employee’s primary flow of work.

HR operations doesn’t seem so dull anymore as companies wrestle with the details involved with managing remote workforces or planning for returns to work. As a result, a number of vendors have scrambled to improve their offerings in time and attendance, service delivery and similar areas. 

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