THE BIG SHIFT: HR Tech is now Work Tech 

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As June 2023 came to a close, Mercer | Leapgen’s Global Vendor Services practice hosted our first Market Pulse: a quarterly industry conversation with Workforce Technology solution providers. 

We shared current organizational priorities, market shifts, and investment behaviors driving the selection and success of the wide array of solutions upon which organizations rely to deliver workforce experience and services and support necessary transformation.

Market Behavior

What did we report?

  • A still-bullish market. 
    A still-bullish market. Organizations still need solutions for persistent talent problems, the changing shape of work, and demands for transformation. Economic ripples may slow or defer spend, but budgets remain steady.
  • Investment priorities are par for the course:
    Investment priorities are par for the course: Talent & Skills, HR Analytics, Talent Acquisition platforms, Experience Layer, and Service Delivery.
  • HR is still behind the technology
    HR is still behind the technology; unhappy with current solutions, not seeing the results they need, applying micro solutions to macro problems.
  • The Talent lines are blurring fast. 
    The Talent lines are blurring fast. Once Talent Acquisition, Talent Development, Talent Management — it’s all just Talent now, or should be. The implications of this have yet to play out. Your buyer will change, your business case and value proposition will evolve, and your measures of success absolutely need to follow.
  • Every organization professes to be a skills-based organization but is at the very beginning of a journey not well laid out. 
    Every organization professes to be a skills-based organization but is at the very beginning of a journey not well laid out. Becoming skills-based is a cultural shift first, a technology solution second. Lots of strategic consulting to be done here.

HR Tech satisfaction

In our recent HR Tech Confidence Check survey, 51% of organizations rated adoption of HR Technology as below expectations, and 4 in 10 organizations are dissatisfied or very dissatisfied with their ROI from HR Technology spend.

There are a number of reasons stats like these don’t budge much from one survey to the next. One reason is our propensity to roll out Minimum Viable Product in the place of Minimum Lovable Product. The easiest way to understand the difference is to recall the last time you downloaded an app. Did it meet your discerning consumer expectations? Was it intuitive and helpful, even addicting? Did you love it? More importantly, what did you do if you didn’t?

We agreed most of us bail on applications that don’t immediately hook us or demonstrate value, and we rarely or never return to see if those applications improved. So goes with our experience of workforce solutions. HR organizations have a single shot at hoping people will use the solutions they present. Their success depends on presenting something innovative, not basic; something high-performing, not just functional; something advanced, intuitive and intelligent, personalized and data-driven; and something that feels both aesthetic and optimized for scale and continuous improvement. We expect this from the apps we use to inspire, educate, entertain, and organize our lives; people don’t tend to lower the bar when it comes to workforce technology solutions.

Generative AI for HR

Finally, we asked solution providers to weigh in on the hottest topic of the day: Generative AI. Our audience was more than 100 founders and business heads, CTOs, product strategists and product marketers, sales and marketing leaders, customer success and analytics leaders, and some consultants. You told us 60% of you are using Generative AI in your job today. A resounding 84% agreed more people are talking about Generative AI today than 12 months ago. More than half (58%) said Generative AI will change the HR function by 25% over the 12 months, and the boldest of you (39%) said it will change by 75% or more.

In other words, almost 40% of solution providers predicted an HR function that won’t look the same a year from now thanks to the advancement of Generative AI. What say you, Human Resources practitioners and CHROs?

These conversations create fabric we can use to connect solution providers to their target market and ideal customer profile. It’s not enough to predict market shifts, read the tea leaves of estimated budget planning and stated investment priorities, and react next quarter. Today’s most successful workforce technology solution providers are shifting on a dime; they’re agile, have an active ear to the ground, and partner closely with their customer base and the broader market to tune their solution to the most pressing business needs. And they know how to deliver impact. HR satisfaction with their technology investments will never improve if we can’t show impact, and that’s a story vendors are called to tell better.

Mercer continues to scale our vendor services practice across the globe to help foster these conversations and connect the dots between solutions and business value. Look forward to our next Market Pulse in September 2023 as we help prepare solution providers for Q4 and fall conference season.

About the author(s)
Jason Averbook

Global Lead on HR Transformation and AI

Jess Von Bank

Head of Luminate, Mercer | Leapgen

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