Another year’s ending and this time, it seems, we can look around and feel like the world’s getting back to something like normal. Just as they were in 2019, people are out and about, even if many remain wary of crowded spaces. Offices are re-opening, though much of the workforce has decided it prefers remote and hybrid work arrangements. And, there’s hiring going on, but it’s been a long while since candidates wielded so much power.
In 2020 and 2021, HR technology companies scrambled to address demands imposed by Covid-19. At the same time, they moved forward with their expected efforts in product development. Overall, the industry was healthy and dynamic. According to the research firm Imarc Group, the global market for HR technology reached $31.5 billion during 2022, and is expected to reach $53.3 billion by 2028.Teeing Up Next Year: Highlights of HCM Technology in 2022 #HR #HRTech Click To Tweet
For well more than a month now, HR’s cognoscenti have been imagining the industry’s landscape for 2023. For our part, we prefer past as prologue. By and large, we think the trends and themes below impacted 2022 as much as they’ll form 2023. So, here are major trends we saw during the year.
Earned Wage Access
Earned wage access hasn’t been around for very long—most observers say it debuted about 10 years ago. For a time, its use expanded quietly as employees found they liked its speed, convenience and portability. All indications were that the use of EWA was going to continue expanding until, at some point, it broke into the mainstream. As 2022 turns into 2023, that point seems to be here.
During 2022, EWA gained notable momentum. The changing dynamics of work—courtesy of the pandemic—had a lot to do with it, as did the wide unpopularity of payday loans. But as important was EWA’s increasing popularity among younger workers, and investors. In 2021, EWA startups raised more than $1.1 billion in debt and equity, outpacing their total funding raised between 2015 to 2020, according to PitchBook.
Overall, there’s no sign that things will slow down during 2023. For one thing, providing ready access to the earned wages of lower-ranked workers continues to be a concerning issue for employers. For another, employers have discovered that offering EWA brings non-monetary advantages with it, such as increases in engagement and retention.
Earned wage access is popular among workers. Some 60% of them want daily access to their earned pay, according to the National Payroll Survey. Most (76%) believe they should have access to their earned wages at the end of each workday or shift, according to Ceridian. About 69%, including 71% of those with a household income of $100,000 or more, said that no-cost access to on-demand pay would increase their loyalty to an employer. Others (71%) said it would make them feel more valued.
The possibility of economic crisis and the rising cost of living have made EWA’s features more appealing to people. Ceridian, for one, believes participating employers can more easily attract candidates, especially as more employees seek to take back control of their financial wellbeing.
All of this explains the surge of momentum EWA saw during 2022. That energy won’t dip because of a change in the calendar. As TechCrunch put it, “Earned wage access promises to be the shakeup that the payroll system has perhaps required for a while now.”
‘Artificial Intelligence’ is Everywhere – Even When It’s Not
After September’s HR Technology Conference, RecruitingDaily’s President and Editor at Large William Tincup observed that “every third booth” on the exhibit floor talked about AI, even when they were really talking about something else, like machine learning, natural language processing or conversational chatbots. “The acronym ‘AI,’” he said, “has lost all meaning to both vendors and practitioners.”
This was inevitable. For several years—certainly going back to the time before Covid—executives on HR technology’s buy side described AI as “table stakes.” More often than not, they used the term interchangeably with “advanced technology.”
As a result, the idea of “AI” is now applied to products that do everything from coordinate video interviews to tease out workforce trends in order to analyze the behaviors and preferences found in candidate databases. A number of observers argue that what’s called AI is really regression analysis or some other statistical exercise. This implies that “AI” products aren’t so much intelligent as they are complex, and certainly not capable of undertaking the cerebral heavy lifting that goes into management’s decision-making.
On the website Big Think, Kai-Fu Lee and Chen Qiufan argue that AI’s strength lies in its ability to “detect incredibly subtle patterns within large quantities of data.” It can quickly examine swaths of data much larger than anything a human could process on their own. What AI can’t do is set goals for itself, think creatively, think across subjects or apply common sense.
Most true experts in AI agree with these assessments. For HR, AI saves time and increases productivity, eliminates manual, repetitive tasks and operates chatbots that conduct first-line communications with employees. In talent acquisition, AI-based tools allow employers to identify and screen candidates more efficiently, especially at companies that work with large numbers of job seekers.
From generative AI to virtual reality, new flavors of technology are doggedly competing for mindshare with more established technologies. There’s plenty left to discover with AI, but 2022 was the year when the technology really moved into the mainstream.
‘Experience’ Keeps Getting Attention, Even If Its Definition Is Squishy
Just as they have been for the last four or five years, during 2022 employee and candidate experience were at the center of HR conversations. In a distressingly tight labor market, the thinking goes, employers must compete for talent by making the hiring process simple and personal. Once a hire is made, they must ensure the work experience is as engaging as possible in order to encourage retention.
It’s not clear how much progress employers made on this during the year. For example, according to WorkForce Software’s Workforce Experience Gap Study, 39% of employees said their companies didn’t offer them flexibility, even though 79% prefer to work for a company that does.
Meanwhile, Greenhouse’s Candidate Experience Report found that over 60% of job seekers aren’t impressed by traditional recruiting processes. They’re pressuring employers to create a more modern experience. It’s important to listen to them: Candidates who run into application delays, slow recruiter response, inconsistent feedback or ghosting are quick to move on to other prospective employers—of which there are plenty.
In response to all of this, HCM technology vendors have delivered products that are faster, more efficient and easier to use. Even time clocks are now viewed – or at least now marketed—as contributors to employee engagement (because they’re so simple to use, you know).
Experience doesn’t result from one touch, but from several. For many of those touches, technology acts more like an enabler than anything else. For example, fast, easy-to-use apps satisfy workers’ demand for consumer-like technology. But if an employee is overscheduled, or a video is dull and obtuse, the organization has a problem the app can’t address.