Global HRM Market Trends

2023

Top HR IT Trends Named

Generative artificial intelligence will become one of the main technologies that determine the transformation of the processes of searching, attracting and hiring employees. This is stated in a study by Gartner, the results of which were released on September 11, 2023.

It is noted that many organizations have already introduced AI into their recruitment processes - to personalize work with candidates, as well as to perform everyday tasks, such as planning or conducting an assessment of applicants' skills. In 2023, recruiting is focused on the use of new IT technologies to attract highly qualified specialists. At the same time, as analysts note, new macro-trends are being formed, which HR managers should pay attention to. Gartner highlights three key trends in the relevant area.

Top HR IT Trends Named

Generative AI

HR managers are exploring new uses of AI in order to increase recruitment opportunities. Generative AI, according to the authors of the report, will serve as a watershed moment in determining how best to use neural network technologies and large language models to improve the efficiency of processes related to employee search. Although artificial intelligence as a whole has become quite widespread in the recruiting field, the introduction of generative AI is at the initial stage. It is assumed that in 2024 the use of such tools will continue to grow actively: generative AI will help in compiling job descriptions, communicating with candidates and even preparing interview questions. Approximately 76% of HR leaders believe that if their organizations do not implement AI-based solutions within 12-24 months, they will lag organizationally compared to those who use such tools. It is also noted that 81% of HR managers have studied or implemented AI technologies to improve the efficiency of processes in their companies.

Tightening requirements

The hype around generative AI also leads to a change in the way organizations view ethics in the relevant field as a whole. The regulatory uncertainty observed in 2023, according to researchers, will continue and even intensify in 2024. As more companies seek to incorporate generative AI into their day-to-day operations, questions are increasingly being raised about the responsible use of such tools. Despite the tightening of regulation, organizations will continue to use generative artificial intelligence. As companies and businesses increasingly experiment with AI, HR managers should be mindful of the technology being applied.

Top HR IT Trends Named

Extended Purchase Cycles

The current macroeconomic situation, high inflation and market uncertainties lead to longer cycles of procurement and implementation of IT technologies. This forces companies to evaluate the economic rationale for the transformation more carefully. This trend will continue in 2024. According to Gartner, the observed situation may lead to the fact that developers will be in a hurry to bring new products to the market, trying to maintain profits. As a result, HR managers will have to carefully study certain tools before deciding on their implementation. And this can further lengthen purchase cycles. Customers need to prioritize a wide variety of requirements to ensure long-term success.^[1]

How HR technologies will develop in 2023. 5 main forecasts

Gartner has identified the main strategic HR technologies that will be key for organizations in a difficult macroeconomic environment and in a crisis. The corresponding list was published on February 22, 2023.

HR technologies are a set of different tools and tools used by HR teams to improve the functioning of the organization. It is noted that the published list is based on the results of a survey of 138 heads of various companies. To drive HR transformation in their organizations, directors should act on the following five fundamental principles:

How HR technologies will develop in 2023

1. Top HR Technology Priorities

According to the survey, approximately 44% of HR managers reported that improving business results is their top strategic priority in transforming HR technologies. 26% of respondents stated an increase in the number and advanced training of personnel. About 17% of respondents highlighted the need to optimize costs. Overall, it is critical for HR executives to deliver revenue and profitability growth, especially in times of social, technological and economic change.

2. Key Barriers in HR Technology

Gartner's research shows that the main obstacle in the HR technology segment is to ensure the constant implementation of HR solutions among key stakeholders - employees, managers and the HR team itself: 57% of respondents indicated this. In addition, the justification of investment in HR technologies (46%), as well as the development and maintenance of a strategic plan for the transformation of HR technologies (43%), are named as barriers.

3. Current and new technologies

In 2023, many HR managers will focus on deploying and optimizing existing technology solutions. Most cloud applications receive two to four major updates per year, and organizations should quickly implement them to maximize the benefits of new capabilities as they become available. In addition, Gartner research shows that HR leaders consider areas such as skills management (51%), learning platforms (41%) and internal talent (32%) to be the most important.

4. Employee satisfaction

Less than half (43%) of HR managers believe that their employees are satisfied with the HR technologies used in their organization, while the rest report that their employees are either neutral or unhappy. It is said that dissatisfaction is most often associated with a suboptimal approach, which can be caused by several reasons, including insufficient digital maturity, inadequate change management and insufficient communication about the value of technology.

How HR technologies will develop in 2023

5. HR/IT Interaction

Approximately 39% of HR managers indicated that they define their own HR technology strategy with the support of the IT department, while 45% of respondents reported developing an HR technology strategy with the equal participation of HR and IT teams.

While many HR organizations are trying to fully control the strategy of HR technologies, the HR team hardly has all the skills necessary to determine a holistic strategy in the relevant area. IT and HR teams need to work closely together to combine understanding of business processes and technical expertise of the required functions, "said Josie Xing, Director of human resources department Gartner.[2]

2022: How technology will change the organization of work. 10 forecasts

On December 6, 2022, the analytical company IDC published a study that examines the trends in the development of the global labor organization market. Analysts note that the current macroeconomic situation, pandemic and digital transformation of enterprises around the world will have a significant impact on this area.

The study says that the hybrid approach to organizing labor activity, which was once considered a temporary means of allowing enterprises to continue business operations against the backdrop of COVID-19, has become the basis of the global working environment. Companies, according to IDC, require dynamic and reconfigurable teams of employees who can quickly adapt to business requirements and new realities - anytime, anywhere. Hybrid environments include the introduction of automation tools, the transition to cloud resources, as well as the use of advanced artificial intelligence (AI) systems.

Analysts note that the current macroeconomic situation, pandemic and digital transformation of enterprises around the world will have a significant impact on this area.

In general, the observed trends will lead to major changes in the organization of work. The IDC study identified factors that must be considered by company directors and management personnel when building a business.

Forecast 1. To address issues related to employee health, stability, travel and other factors, by 2027, 30% of the world's 2,000 largest public companies (Global 2000) will begin implementing metaverse-based third-party services to provide customer engagement.

Forecast 2. By 2024, the demand for business developers will become widespread: more than 60% of enterprises will train users to create their own applications and automated services using Low-Code tools.

Forecast 3. Amid a shortage of qualified employees, Chief information officer investing in digital adoption platforms and automated learning tools will be able to expect 40% efficiency growth by 2025.

By 2025, Chief information officer will be able to count on a 40% increase in efficiency

Forecast 4. By 2024, organizations applying micromonitoring measures for employees (cameras, keystroke registration) will actually face a 20% decrease in labor productivity.

Forecast 5. Companies in the Global 2000 ranking that implement tactical hybrid work models will lose 20% of revenue in 2024 due to job cuts and inefficient teams.

Forecast 6. By 2025, organizations that have created special hybrid security policies and developed a culture of trust will be three times less likely to face violations of information security policies.

Forecast 7. By 2024, companies offering their employees convenient access to digital collaboration platforms, process automation systems and other similar tools will increase revenues by approximately 20% thanks to increased productivity.

Forecast 8. Integrated analytics in the intelligent digital workspace ecosystem will lead to a 70% improvement in differentiated business results by 2026.

Forecast 9. By 2025, 65% of Global 2000 companies will begin to consider online presence as an alternative to real communication among their involved employees.

Forecast 10. By 2024, 55% of senior managers at large enterprises will use intelligent space and resource planning technologies to revise the organizational structure of office space for meetings, collaboration and training.^[3]

2013-2014

According to a study Aberdeen Group^[4]2013^[4] economic situation in the world left most organizations with rather vague prospects. In this situation, the main factors that determined the company's strategies in the field HRM were the need to work more efficiently (41%), achieve the intended goals (32%) and develop unique advantages, skills and skills for the industry (30%).

This organically implies the main HR priorities of companies around the world: this is the acquisition of "talents" (57%), increased operational efficiency (53%), development and training of personnel (44%). In a similar way, the preferences of organizations in terms of mastering certain automated HR tools were distributed:

Top HCM Technology Implementation Priorities

Aberdeen Group, December 2012

According to Deloitte^[5], these trends are still relevant in 2014. According to experts of this company, in 2014, in spite of everything, globalization will remain the main challenge for business.

In 2013, developing countries accounted for about 50% of world GDP, by 2018, according to forecasts, this figure will already be 55%. And all these countries have a fairly serious consumer demand. The global middle class will increase from 1.8 billion in 2009 to 3.2 billion in 2020, in Asia alone, the middle class will triple by 2020 to 1.7 billion. Plus, there is a significant demographic shift, the population is growing, and young workers approach technology in a very different way than their older counterparts. The regulatory sphere is also changing, and continuously.

All this requires companies to lead, based on competent talent management, develop opportunities, based on analytics and the simultaneous transformation of the HR sphere, update personnel strategies.

Mobile, social and cloud technologies in 2014 retain influence and change the workspace. At the end of 2013, according to Gartner, there were more than 1 billion smartphones and more than 420 million iPhone mobile devices in the world. Facebook, starting with 1 million users in 2004, had more than 1.23 billion at the end of 2013.

Forrester estimates that cloud technology will generate $241 billion in revenue for suppliers in 2020, up from $41 billion in 2011. All this, of course, forever changed the world of recruitment, education and training, analytical tools and approaches to work in general. All these new technologies are absorbed by markets, including suppliers of HRM systems.

The main HR priorities of organizations

Deloitte, 2013

According to a Deloitte survey of more than 2.5 thousand companies, for most of them, the most important role in 2014 will be played by maintaining leadership, revising HR functions, and absorbing talent.

Depending on the industry, the emphasis may be shifted. The table below shows the percentage of companies in various industries that have noted certain elements of HR development as vital or very important.

Industry priorities in terms of HR technology development

Deloitte, 2013

As can be seen from this table, the absorption of talented specialists, for example, is more relevant for the technological, media and telecom sectors (80% with an average market importance of 75%), and HR analytics - for the field of medicine and life support (80% with an average of 72%).

In general, almost half (47%) of companies admitted that they plan in the next 12-18 months either significantly, by more than 5% (13% of respondents), or simply increase (34%) HR costs, another 39% were ready to leave them at least the same level.

2011-2012

According to a study by Gartner (Hype Cycle for Human Capital Management Software, 2012), compensation management, visualization in HCM, biometrics, mobile HCM are now in the HRM systems market at the peak of user expectations. The ideology of Hype Cycle research suggests that every technology product in the market goes through certain logical stages of maturation in its evolution - from inflated user expectations to the "sobering" stage, when the shortcomings of the technology become more obvious, and then to the productivity stage, when consumers purchase the product, clearly realizing its pros and cons, as well as the effect of implementation.

HRM Technology Maturity Cycle

Gartner,2012

So, in the HRM market, for example, social recognition systems, video recruiting, social educational platforms, social tools HCM, social recruiting are at the ascent stage. At the stage of disappointment are SaaS HCM, talent management, work time optimization tools and others. In the productive stage, tracking applicants' applications and self-service of employees.

2009-2010

Analysts at Forrester Research believe that the processes taking place in business, society and the technology industry constantly influence the development of the global HRM systems market, especially in today's changing macroeconomic conditions. Based on this, they highlight several major trends that dominate the market.

Global Influence Factors

Business strives to integrate all the components of employee lifecycle management

Thus, the technologies that are used for recruiting, training, improving efficiency and calculating compensation for central-level attire, HRMS, form a single information field that allows employers to manage employees comprehensively. Due to economic problems, most companies today prefer to cultivate their own recruitment services and contact third-party consultants only if they need a radical change of strategy. Personnel training thus integrates more closely with corporate goals, sharpening the skills of employees according to the standard required by corporations. 

Companies continue to face challenges managing ever-changing labor resources

The baby boomer generation is behaving completely different from old-timers, moving up the career ladder. Most young employees change jobs with ease, preferring options where, for equal remuneration, they will be offered less responsibility or working hours, as well as a free or rolling work schedule. To somehow preserve corporate competencies, companies will have to develop the institution of mentoring or mentoring, so corporate knowledge will be transferred from experienced employees to beginners directly. 

The instability of the global economy affects HR practice

Under the current conditions, enterprises will develop special programs that will target employees for efficiency and assist them in achieving maximum working efficiency in as short a time as possible. In addition, the turnover of personnel will make companies seriously puzzled by the loyalty of personnel and establish serious training, development and incentive schemes.

Social technologies permeate the structure of organizations

Modern technology allows employees to do their job faster, do it more efficiently and without being tied to a specific location. Employees will need solutions that will allow them to have constant online access to data on sales, search, participation in trainings and experts, regardless of where this access is from and with which device - a laptop or smartphone. 

Employees perform "self-service" using mobile technologies

Employees of companies are increasingly receiving the information they need using mobile devices, social media or collaboration tools. Also, mobile technologies are and will be actively involved in the processes of training, reporting, talent management and services such as employee-employee.

Talent management comes to the fore

Forrester classifies corporate training and employee efficiency tools as key strategic areas for the development of HRM systems. This is the hottest segment of the global human resources market. Thus, the segment of talent management systems will grow by 16.5% annually until 2014, and the segment of corporate training systems - by 8%. At the same time, both of these segments also took a course on SaaS: this model of software use is becoming more and more popular among customers.

Market consolidation

According to the largest vendors of human resources systems, HR professionals need integrated HRM solutions from one supplier. The largest outsourcing companies share the same opinion. In addition to the takeovers (ADP bought Workspace and so on), autorsers and system integrators (ADP, Ceridian, Infosys, NorthgateArinso) are becoming an important part of the HRM and WFM (Workforce Management) sales channel of subscription-distributed solutions (SaaS).

Consolidation is a serious market driver, as seen in the latest deals:

• SuccessFactors acquired Inform (workforce management analytics and strategic planning) and Cube Tree (social software)
• Authoria and Peopleclick Team Up to Create Joint Recruiting and Talent Management Solutions
• ADP acquired Workspace
• StepStone Solutions Swallows MrTed to Achieve Global Leadership in Recruiting Solutions Market
• Taleo acquired Learn.com
• Kenexa bought Salery.com

The role of SMB is strengthened

The growing popularity of SaaS solutions is due to both their "global," flexibility and ease of adaptation, and relatively low cost. And the factor of reducing automation costs came to the fore, mainly due to the shift in active sales to the medium and small business sector, which has to "count money."

In this regard, another trend is manifested. SMB solutions become comparable in functionality to HRM systems for large companies, while remaining affordable. Perhaps this has become an additional factor in the transition of vendors of "heavy" HRM systems to a service-oriented architecture, which should make these solutions more accessible (it will be possible to buy only the necessary services) and flexible (it will be possible to combine solutions from different developers and supplement them with their own).

Thus, the SMB segment, the SaaS model and the development of the "strategic" level of HRM systems provided the market with the opportunity to grow at a rate of 10 % per year. According to Gartner analysts, over the next five years, the advanced functionality today, which is not always in demand, will be the standard and used by most companies. Accordingly, after this deadline, market growth should slow down. Until then, its growth rate should be 7% -10 %, as predicted in Forrester and AMR Research.

Notes