First, the HR Tech market is turned inside out – it’s entirely focused on employees, not HR.
Every company is reinventing its employee experience, so they need tools that simplify, automate, and digitize everything. We’ve gone well beyond building a great portal or mobile app: companies need AI-enabled tools that fit together like puzzle pieces and platforms that let them build journeys, back-to-work programs, onboarding, and transition programs, and wellbeing solutions easily.
The big trend in the tech market is moving from “systems of record” to “systems of design.” In other words, we need platforms that are not only easy to use but actually easy to build and customize. Vendors like Microsoft (Viva), ServiceNow (the Quebec release), and new offerings from Workday, Oracle, SuccessFactors, and others are opening the door to a world of “Creator Tools” for HR.
Second, Microsoft’s entry into the market could change everything.
It’s hard to think of a vendor that isn’t impacted by Microsoft Viva. Learning platforms have to integrate with Viva Learning and Microsoft Teams. Content companies are building Viva-enabled search and discovery. Communication and wellbeing tools are developing plugins. The wave is just beginning and it has every HR Tech product manager scratching their head.
The other impact is the formal definition of the Employee Experience Platform as a category. Lots of vendors have decided they want to be in that space.
Third, new user interfaces and AI-enabled agents are transformational.
The user experience for HR platforms has changed. Every new system needs a conversational interface, and most work through messaging. Upwards of 40% of the workforce is now “diskless,” and they want the HR system to “disappear.” In fact, one trend is what I call the “disappearing HR system” – we just chat with it or interface with it and never really log in and see it.
There are many innovative designs to consider. One cool tool I’ve seen is a product called Charthop that displays every piece of data you need visually.
Vendors like HiBob (mid-market HRMS provider) have built entire HR Platforms designed for managers.
HiBob’s employee-focused user experience
Workday’s acquisition of Peakon is an example of what’s happening. Not only does Peakon have a fantastic survey system, but it is also a very innovative and compelling user experience for managers. I think Workday may have been as excited about this as they were about surveys.
Peakon User Experience
Fourth, skills engines and Talent Marketplace are now mainstream.
Coming out of nowhere, these technologies are now available from all the ERP and HCM vendors and there are dozens of new solutions. The LXP market is now the most important design center for corporate training, and every LXP has its own built-in skills engine. So lots and lots of companies are looking for integrated skills technology, again enabling newer vendors like Gloat, Hitch, Eightfold, Fuel50, Workday, and others to disrupt the market.
We’ve talked with SAP, Pepsi, Allianz, Standard Chartered, NetApp, Verizon, Citibank, P&G, and dozens of other companies. These companies and more are piloting skills taxonomies and talent marketplace platforms. If you’re moving in this direction and would like some help, let us know – we now have a methodology to help bring this together.
Fifth, 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 120 employee apps). Employees want self-service tools and workflow management platforms to build new employee journeys. The ERP vendors have not focused on this area until recently (Ultimate acquired PeopleDoc in 2018), opening the door to ServiceNow, Microsoft Viva, and tools like Embark from WillisTowersWatson to take the lead. Watch for more from Oracle in this area soon.
ServiceNow is becoming a “citizen developer” platform, enabling teams to build employee apps without learning how to code. Microsoft PowerApps is a similar service, available to anyone who uses Microsoft Viva or Microsoft Teams and 365. The reason I think ServiceNow is so disruptive is its strong ties to IT. We are now in a world where HR Tech, Work Tech, and messaging and communication tech are integrated. That means you cannot buy HR tech without partnering with IT, and ServiceNow is one of their best friends.
Where is all this going? The self-service and workflow design systems in HR are becoming “systems of design,” opening up a new market for every vendor.
Sixth, employee listening tools have become critical infrastructure.
Vendors like Qualtrics, Medallia, Glint, Peakon (Workday), Perceptyx, CultureAmp, and dozens of mid-sized vendors are revolutionizing the world of employee voice. Microsoft Viva Topics can identify experts in the company from their documents and activity, and Microsoft Viva Insights can help managers see when employees are overworked. We now have an entire industry of survey, feedback, listening, and crowdsourcing tools in the market, many of which are worth $billions because of their growth. And ServiceNow and Oracle are getting into this space.
While most companies now have HR data lakes and data warehouses, there is a new market to store the “experience database” that manages all this employee feedback. Vendors like Medallia and Visier are working on this, and ultimately this feedback data will be as well organized as your 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 with Qualtrics, Medallia, and Workday in the market I expect more disruption to come.
Seventh, the corporate learning market is healthier than ever.
The $240 Billion markets for employee development is also now on fire. Not only are content companies like SkillSoft, LinkedIn Learning, Udemy, O’Reilly, and Pluralsight growing at double-digit rates, the learning tech market is as healthy as I’ve ever seen it. Degreed and EdCast are taking over as center stage systems for employee learning, with LMS platforms pushed to the back. The mid-market LMS market is growing rapidly again, as vendors like Fuse Universal, Docebo, Totara, and many others continue to grow.
But the big story is Learning in the Flow of Work. It has really arrived, and nearly every learning tech vendor now offers skills-based learning, browser recommended content and soon integration with Microsoft Teams. Soon enough we’ll see streams of learning in the flow of collaboration, communication, and project management. New Precision Development Systems like BetterUp, the $1.7 Billion valuation AI-based coaching platform, are even challenging the LXP.
The next big step, as I describe above, is working with leadership to build strategic Capability Academies.
And there’s more.
In the report, I discuss the trend for a new, simpler job architecture; the emergence of graph database technology (Neo4J is a hot company); the increasing relevance of ONA (organizational network analysis); and the emergence of dedicated DEI analytics tools. I recently had a call with the head of People Analytics at Nasa and they have built an entire skills-analysis system for their 15,000+ engineers and scientists based on a graph database. What did they find? They have some big skill gaps in the new quest for Mars.
Wellbeing continues to grow, as companies like Castlight, Limeade, VirginPulse, meQuilibrium, and many others continue to grow. But a new, more integrated model is coming. League, a platform vendor positioned as “The Health Operating System,” has built an entire platform focused on managing all aspects of health and wellbeing. League, which is partnering with Workday, could start to redefine this fast-growing market.