3 kinds of emerging HR tech ideas
Three kinds of emerging HR tech ideas: which one will be the most disruptive?
As business leaders, we’re used to making data-driven decisions in every facet of our organisations, except, perhaps, for our people.
While the world of work is changing rapidly, there are still aspects where organisations generally do things the way they’ve always been done, such as the way they find candidates for roles, select new hires, and identify and develop top performers.
Largely I think this is because businesses still struggle to accurately measure people. And that leaves the HR and recruitment sectors ripe for disruption.
It could be done by innovators who combine user-friendly digital platforms with data gathering and clever algorithms to power artificial intelligence, and do it at scale.
I’ve recently had the unique opportunity to meet entrepreneurs who are trying to do just that: risking their livelihoods on their belief that they could become the HR industry’s equivalent of Facebook, Amazon or Uber.
I was on the judging panel where more than 30 start-ups and scale-ups pitched their business ideas in the hope of being selected for an HR Tech accelerator program run
by Slingshot. Hudson is a Principal Partner of the program, alongside SEEK and the University of Technology Sydney.
This week, a dozen of those entrepreneurs – plus Viren Thakrar, Hudson’s Regional R&D and Innovation Manager – began a 12-week intensive program in Sydney as they learn how to commercialise their ideas, supported by corporate mentors.
From these entrepreneurs, I’ve observed three kinds of HR technologies emerging.
- Online market places
These are digital platforms for matching supply and demand for job roles, such as for finding contractors, interns, part-time work, job sharing or even job swapping.
Of course jobs boards are not new, but many of the new platforms use algorithms to match people with roles – not dissimilar to dating apps. The speed and sheer number of entrants is going to have a major influence on recruitment.
The market place apps typically match candidates based on their skills and work experience, and sometimes incorporate additional profile information based on a behavioural-based interview or questionnaire.
For recruiters who are not evaluating their offering, it’s going to be a huge challenge. If all they’re doing is placing ads on jobs boards and flicking through CVs to clients, there’s very little value add that they are providing
above and beyond what an app can do. What these online market places can’t do (yet) is significantly improve the likelihood of finding a candidate who is a good fit and will be a high performer. Our own Hudson research has previously
found that only 56% of employers rate their recent hires as good, with 44% rating them as average or bad – that’s almost the same as tossing a coin when selecting a new hire.
So how can recruiters add value above and beyond what a platform can do?
You need science and you need rigour to help you make the right hiring decisions, beyond skills and experience. You need to be able to analyse and measure motivations, behaviours and values, using accredited psychometric assessment tools.
You also need extensive data gathering and analysis to create a profile of what a successful candidate looks like in a specific field, and in specific roles for individual organisations. This is where recruiters can truly differentiate themselves.
It’s why at Hudson we are placing so much emphasis on our talent management and talent analytics tools, such as our Business Attitudes Questionnaire and Leadership Blueprint.
- Portals for specialist expertise
These are online platforms that provide specialist advice at low cost – whether that’s HR and legal advice, or business consultancy, or mentoring. This is particularly beneficial for SME businesses, who previously have not been able
to afford specialist advice.
In addition to providing low cost advice at scale, these platforms are gathering data that will help them to better tailor their advice, as well as providing insights to fuel other services such as job-matching or business decision-making.
While these platforms will inevitably challenge consultancy firms, their drawback is that they will also have to prove the credibility and reliability of their advice.
- Online tools for information and data gathering
These are tools with a specific use that also provide businesses the ability to gather data about their people, whether that be 360 reviews of employees, or personalised training and development plans, or elearning platforms.
Their advantage is that they significantly reduce the cost to businesses to access tools that otherwise would be too expensive or too complex, especially for SMEs.
In the same way that Fitbits and mobile apps have enabled us to make data-driven decisions in our personal lives, these emerging HR tech apps provide businesses with tool sets to curate data to improve their decision making.
Part of the challenge with these tools is validating the data. How do you norm the data? How do you get it accredited? Anyone can create a test for anything, but are the results accurate?
Data can be really dangerous if it’s used in the wrong context by the wrong people.
If you are going to use one of these new tools to make decisions, you have to have someone giving advice, to be able to interpret what it’s telling you.
The common thread to all three of these emerging HR tech ideas is that they provide opportunities to gather data about people. But measuring people isn’t easy, and getting it wrong can have serious consequences.
I expect that the most successful HR tech innovations will be those that not only collect people data at scale, but back it up with the science, rigour and insights to ensure the data leads to effective decision-making.