3 reflections on the 2023 HR Technology Conference: the future through lenses of the past

Last week I had the pleasure of attending the 2023 HR Technology Conference . It was a fascinating if somewhat overwhelming conference. More than 400 vendors and over 300 speakers discussing a wide array of HR technology applications. The following are three impressions from the conference reflecting the current state of HR technology. To provide some context, I compare each to previous shifts in technology along with suggestions on what they mean for companies’ current HR technology strategies.

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1). AI/ML functionality is shifting from differentiating innovation to commoditized expectation. Almost every session made some mention regarding the impact of AI/ML on the field of HR.?Generative AI is now being applied across most HR processes and is significantly improving things such as candidate relationship management, employee coaching and development, and analyzing and interpreting workforce data.? Machine learning applications are also being widely adopted to support things such as workforce planning, shift scheduling, candidate assessment, and skills management.?

The rapid growth in us of AI/ML suggests that this once cutting-edge feature that had been limited to a few advanced technology companies is becoming a readily available commodity across the HR technology market[i] .? Roughly 25% of the vendors on the show floor explicitly called out AI/ML functionality as a key differentiator in their solutions. One wonders how many vendors must offer a functionality before it is no longer seen as a differentiator to be touted in marketing campaigns, and simply becomes an expected part of technology. The way people talked about AI/ML reminds me of how HR technology vendors talked about mobile applications in the past.? If an HR technology vendor had a mobile app in 2010 it was seen as somewhat leading edge.? But by 2015, having mobile apps was more an expectation than an innovation. I suspect this is how people will view AI/ML functionality by 2025. It will still be a complicated and impressive technological capability, but it will also be something vendors are expected to have in their solutions.

What this means for companies’ HR technology strategies. Companies should change their view of AI/ML functionality from something they might adopt at some time to something they have to do within the next 3 years. Particularly when it comes to functionality that impacts candidate and employee experiences.?Companies that adopted AI/ML applications in 2022 were ahead of the curve.?Companies that do not adopt AI/ML applications by 2024 will be outdated.?That said, there is a right and wrong way to use AI/ML.? Now is the time to define and start executing a strategy to incorporate AI/ML into your organization’s HR technology portfolio in a way that maximizes its value while minimizing its risk.

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2) Skills management is a major step forward, but perhaps not in the way it is being presented.

Based on a rough count, over 20 vendors offered skills management solutions that use AI/ML generated skills ontologies to support workforce planning, external hiring, internal talent mobility, or employee learning and development. These solutions show how modern technology is being used to address age-old problems of skills identification, discovery, and matching. Despite the rapid development in skills management technology, a study by RedThread Research found 58% of companies have no defined skills management strategy, and most companies that do have skills strategies are only addressing specific parts of their workforce. This suggests a significant gap between the growth of new skills management solutions and the actual use of these solutions to solve business needs. The customer case studies I saw featuring skills management solutions showed the value they provide but also emphasized the work needed to train skills ontologies to reflect the nature of the organization’s workforce and address the specific problems the company is seeking to solve. In sum, skills management is a major area of technological innovation that has not yet achieved widespread business application.

Companies building skills management solutions often talk about their potential to “revolutionize” the nature of work by moving from role-based to skills-based talent management. I believe skills management will significantly improve companies’ ability to build, develop and reshape their workforces, but suspect this will be an evolutionary step forward rather than a revolution in work practices. How companies talk about skills management solutions in 2023 reminds me of how companies talked about employee experience management solutions around 2018 and psychometric assessments way back around 2005.? All three represent significant advances in the ability to measure and understand employee attributes. In all three cases, arguments were made that these solutions could and should be used to fundamentally rethink how companies approach organizational design and workforce management. But it did not happen. Though these solutions have yet to fundamentally change the way companies manage people, these solutions do significantly improve the quality of decisions companies make about people and how they are managed.

What this means for companies’ HR technology strategies. The book Talent Tectonics explains why improving skills management is critical to addressing growing labor shortages caused by demographic shifts and the increasing demand for specialized skills driven by digitalization. HR technology strategies should include a framework that defines how skills management solutions can be applied to address critical business needs facing the organization. ?Somewhat similar to employee experience strategies companies developed a few years ago that focused on specific workforce issues, these frameworks may not lead to using skills management solutions everywhere for all employees. But it is safe to say is that every company can significantly benefit from improving skills management for some part of workforce operations. Whether it is related to workforce planning, staffing, learning, or internal talent movement either for a certain segment of the workforce or for the entire employee population.

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3) HR technology is still more about improving HR processes than directly improving work. HR has long been criticized as being disconnected from actual business operations. One reason for this disconnect is most HR technology solutions are designed to run on HR technology platforms, which are not the same technology platforms that companies use to run business operations. This limits the impact these solutions have on work itself. To illustrate this concept, consider the following example based on two solutions using applications of AI/ML to assess employee skills. Both solutions analyze video footage of employee behavior to determine if people are displaying actions associated with mastery of job tasks. What is different is the focus of the solutions. The first integrates with learning management solutions so HR organizations can determine if employees have mastered skills presented in training programs. The second integrates with plant operations systems to guide shift supervisors in coaching employees to perform work tasks appropriately. The first indirectly improves working conditions by improving the effectiveness safety training.? The second directly improves working conditions by addressing safety risks in real time.

The current state of HR technology reminds me of the disconnect that once existed between mapping technology and driving technology. There was a time when maps were sheets of paper. The process of using a map while driving required stopping the car, pulling the map out of the glove compartment, trying to figure out where you needed to go, struggling to refold the map so you could shove it back into the glove compartment, restarting the car, and then driving off, getting lost again and starting the process all over. GPS technology led to significant improvements in our ability to use maps, but it did not radically change the driving experience until maps were incorporated into displays appearing on car dashboards.?Maps went from being something that sat in a car that drivers might access occasionally, to being a part of the car that directly influences driving decisions in real time. A similar change is needed related to HR technology and business operations technology if the field of HR is to fully realize its potential when it comes to improving the quality of work.

What this means for companies’ HR technology strategies.?The development of cloud technology has enabled creation of interoperable solutions that make it possible to integrate HR technology with business operations technology.? However relatively few companies have started to use these solutions to link HR and non-HR business platforms. As a result, very few HR technology vendors build solutions designed to work outside of HR platforms. Fully realizing the potential of HR expertise to improve company performance requires creating HR technology strategies that focus on breaking down the silos between HR processes and business operations. This means examining the systems the company uses to manage financial, supply chain, manufacturing, sales, and customer operations and finding ways to integrate HR solutions into these platforms to directly improve the nature of work itself.

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The future of HR technology depends on vendor partnerships. These themes are some major take aways I had from attending the HR Technology conference.? But they are a fraction of what I learned.?As I spoke to various vendors and customers one additional thing became abundantly clear. The future of HR technology is too broad and diverse to be driven by any single company. It will be shaped through an increasingly interconnected community of HR technology innovators and developers. Similarly, the most impactful innovations are not intended to work in isolation. They are designed to work as part of larger suite of solutions.?

When it comes to HR technology, no one is good at everything .? The myriad of workforce challenge companies face will always go beyond what any single HR technology provider can address. HR technology strategies must look past the outdated notion of “best of breed” versus “single platform” approaches. Emphasizing the importance of working with vendors who embrace the value of partnership and promote the sharing of both knowledge and data. Which bring to mind one more thought I had while wandering through the crowds attending the HR Technology Conference: ?how lucky we are to be part of an amazing community of people dedicated to using technology to improve the world through improving work.

[i] This does not mean the technology is simple to understand or easy to apply.? But it is far more common now than it was in the past.