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The four hottest HR technology trends for 2018

HR technology is growing at breakneck speed as companies look for better ways to attract and understand talent, as well as boost the employee experience. Here's a look.

To win in the war for talent, today's companies need to know the latest HR technology trends and understand which ones they need to explore as soon as possible. Indeed, HR is being disrupted by technology at an arguably unprecedented rate.

Forrester principal analyst Paul Hamerman has worked as an analyst and advisor for more than three decades and said he has never seen HR technology advance as rapidly as it has in the past few years.

Hamerman expects 2018 to be another breakneck time for HR technology, as AI-supported and consumer-type applications and services continue to develop capabilities that give organizations sweeping and detailed insight on current and prospective employees.

HR consultant Steve Boese agreed. "We've been talking about [HR technology] for almost a decade, but a lot of things are finally maturing," said Boese, who serves as the co-chair of the HR Technology Conference. (SearchHRSoftware publisher TechTarget is the media sponsor for the HR Technology Conference.) "The next couple of years will see HR technology focused on how to actually drive more business value out of investments rather than just improving HR systems."

From programs that gauge employee performance to employee-facing chatbots that accept feedback on sexual harassment, there are several "must-have" -- or at least "must-consider" -- HR technologies on the market, according to Boese, Hamerman and other industry observers.

Here's a look at four HR technology trends that are important to explore.

HR technology trends focus on understanding talent

For years, organizations tried to boost employee productivity by hiring workers whose job experience and educational background mirrored that of the most successful employees, Boese said. Now, the analytical capabilities of HR technology are starting to provide clear insight on aspects of work that were previously hard to recognize and track. "Programs are looking at what kind of projects people worked on, who they worked with and, on a personal level, what their thoughts and feelings are," he said.

Effectively measuring performance is a critical way to understand an employee. That's why continuous performance management technologies appeal to organizations because, as the name implies, they measure performance on an ongoing basis and provide in-the-moment feedback, as opposed to conducting a review with dated feedback only at year's end, Hamerman said. Offerings from BetterWorks, HighGround and Lattice automate the review process and help managers and employees proactively share data and discuss performance goals, enabling employees to tweak performance in the moment, he said.

Programs that attempt to discern worker sentiment are gaining traction, according to Deb Card, partner at ISG (Information Services Group) and lead of its HR technology practice. As an example, Card cited Ultimate Software, which uses natural language sentiment analysis technology to uncover the true feeling behind what employees say in surveys.

Similarly, analytics technologies also aim to best understand job prospects. AI-supported software creates algorithms to sweep through data, identifying candidates who match an organization's hiring goals, said Brian Kropp, HR practice leader at CEB (now Gartner). HiQ Labs Inc., for one, scans LinkedIn, Twitter and other public social media data to predict if someone is hinting -- or shouting -- about making a career change.

Employee feedback among top HR technology trends

Hamerman recently opened his hometown newspaper, the Richmond Times-Dispatch in Virginia, to read that a local advertising company, The Martin Agency, is using an employee feedback application in the wake of an executive leaving under a cloud of sexual harassment allegations.

According to the Times-Dispatch, as part of the agency's program to handle this issue and prevent future similar occurrences, it will be using TINYpulse to anonymously collect "progress on categories like safe place to work, inclusive workplace, diversity and morale, in real time." With society closely examining sexual harassment, companies will undoubtedly follow The Martin Agency's lead in 2018 and give their employees an avenue to anonymously report unwanted behavior, Hamerman said. Feedback technology gives HR a great opportunity to gather honest opinions without employees worrying about reprisal, he said.

"It's important for companies to listen to feedback on how to run the business and understand what employees are thinking on any issue," Hamerman said. Another platform, Culture Amp, is also making industry waves for its ability to collect and analyze employee feedback, he added.

HR technology trends include major inroads by chatbots

HR engagement technology is also starting to mirror technology that employees encounter outside of work, ISG's Card said. It might not take off this year, but Workday and Oracle are fine-tuning the development of chatbots to make HR's work easier. These employee-facing chatbots would handle many basic HR administrative functions, freeing up HR employees' time for other tasks, she said.

While consumers interact with a chatbot via a call center, it's still unknown how employees will access the virtual HR assistants on the Workday and Oracle platforms, Card said. "It's not unlike Alexa," Card said, referencing Amazon's virtual assistant. "Except with this, they're asking about a wage increase."

Marrying HR data with non-HR data among HR technology trends

Another trend to watch in 2018 is the integration of HR data with non-HR enterprise data, Card said. SAP, Workday and Oracle, to name three, are marrying the platform connections among HR, ERP and financial products, and the use of these products by companies this year will determine how those offerings are maturing, she said.

If this platform marriage succeeds, HR could benefit from real-time financial data that would inform decisions on salaries and staffing. The financial management end of the ERP technology hasn't yet lived up to its promise, Card said, "but we believe the wave is starting."

Will these hot HR technologies work?

Because AI is in its early years, in terms of maturity, many of the new HR technologies that rely on analytics will work well but aren't perfect, several analysts said.

"They're probably behind on what most people want or what the real progressive companies want," said Boese. Still, organizations need data to be processed fast, and many technologies can provide necessary dashboard data analysis on functions such as head count and compensation trends, he said.

No matter the technology, [companies] won't be able to uncover the best ideas with poor data.
Brian KroppHR practice leader, CEB (now Gartner)

Very few technologies are immediate "must-haves," but if organizations were to invest in them this year, they might want to consider offerings that are being embedded into core HR systems, Card said. "If it's in Oracle Cloud or [SAP's] SuccessFactors, these are things you're going to see year after year anyway," she said. "You don't have to really invest in them separately."

Gartner's Kropp has one caveat for HR departments looking to jump into new HR analytics technology: First, understand your own data.

"These technologies offer a lot of promise and potential, but we believe most companies won't see significant ROI immediately," he said. "That's because most companies have an underlying problem with data quality. No matter the technology, they won't be able to uncover the best ideas with poor data."

He added: "While, in the long run, companies will find potential in analytics, right now, some don't even have an accurate head count number, let alone have data that's ready to be analyzed in a robust, smart way."

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