Human capital will continue to be an organization’s largest investment in 2014 and if productive will be one of its most valuable assets and differentiators. It also continues to rank as top priority by CEOs across the industry. We anticipate that businesses that take advantage of the innovative technology now available for human capital management (HCM) will gain a competitive advantage. Ventana Research will track these technological advances and how they are put to use by organizations that deploy them.
Technology vendors in the HCM market will continue to integrate applications into comprehensive suites as they have done in recent years. We expect to see more HCM platforms combine core functions such as HR and payroll management to create a single, accurate record of hours worked in order to comply with the Affordable Care Act (ACA). Vendors also will focus more on the new generation of technologies, particularly mobile, social media, business collaboration, big data and analytics, some of which have evolved from consumer products. To attract and retain talent vendors are responding to the business imperative of engaging the workforce more fully, and these technologies supply capabilities demanded by today’s workforce. Our benchmark research continues to find a disconnect between the adoption of technology for HCM and the challenges to transition to utilize the innovative advancements.
I’ve designed my 2014 human capital management research agenda to explore the most significant business and technology issues and opportunities organizations face in this area. This research will help HR professionals, managers and executives understand how to address human capital problems so they can achieve maximum competitiveness while applying best practices to practical HR issues. This year our HCM practice will cover three main areas: the role of mobile and social collaboration technologies in transforming activities in the workforce; how organizations can optimize HR activities through better use of technology; and how companies can implement change in human capital management.
In the first area, we will assess how social collaboration can help engage managers and workers more effectively across the organization. We also will examine the relationship between learning and social collaboration in efforts to increase workforce productivity and performance. To support this focus we will start the year by conducting benchmark research on social learning, including how organizations use these techniques and technologies and the challenges they face. Drawing on our completed benchmark research on social collaboration and HCM, we will investigate social platforms that are evolving to serve several important core processes in HCM. Such needs like recognition and rewards that can use the gamification techniques as well as context-aware collaboration to advance HCM processes like recruiting and onboarding.
In addition, we will study how mobile and social technologies change organizations’ talent management processes like those that operate on smartphones and tablets. No longer are online forms and workflow engines sufficient to address the performance needs of businesses and workers. Now workers want real-time, relevant tools that they already use in other areas. We see from our social collaboration and HCM research that organizations have taken the first steps in this shift, with more than half (58%) having open social media and networking policies. In the second half of the year we will explore this trend further in benchmark research on performance management.
The second area we will focus on in 2014 is how managers and workers can better use technology organizations to optimize their HR-related activities. Over the past decade new technologies have helped companies streamline or reinvent many HR processes. As examples, the recruiting process has gained new dimensions with social media, while mobile technologies enable employees to access information such as their HR profile without being in the office. Organizations have invested heavily in such areas over the past several years. We will search out instances in which such investments are paying off.
Building on our benchmark research on next-generation human capital analytics, we will focus on the impact of analytics across the spectrum of HR processes to improve the performance of human capital across the enterprise. Our research finds that improving efficiency and productivity are critical to almost two thirds of organizations. Ventana Research also will introduce a Value Index that evaluates next-generation human capital analytics software to determine who is best for your needs.
Another important development in HCM analytics is the introduction of predictive analytics, a technology that in this area helps organizations plan their future workforce needs for both near-term scheduling and long-term global workforce planning. This year Ventana Research will launch new benchmark research on workforce planning to assess the best practices and adoption patterns of organizations as well as the maturity of current market offerings. In our research on human capital analytics, we found growth in adoption of dedicated human capital analytics tools. Increasingly these products offer predictive analytics, which more than half of respondents (54%) in the research said is important.
Another HCM process innovation we will research in 2014 is task and activity tracking. For several years this has been offered in some workforce management products, with activity tracking in scheduling and time and attendance applications. We identified this growing need in our next generation workforce management benchmark and part of the recent release of Value Index in workforce management where I have assessed the vendors and products that I have summarized. Now this functionality is increasingly included in broader social HCM platforms, making it possible for employees and managers to track individual goals more effectively. We will cover this as part of our benchmark research on core and next-generation HR technologies and the social capabilities emerging in these products. But even managing to have the most productive employees in these activities is no easy feat, and advancements in techniques to engage employees is required to be successful through layering on collaborative technology that finds knowledge sharing as the top benefit. Also, making sure the wellness of employees needs to be considered and is now part of using a new generation of mobile or wearable technology that can track activities and related health of individuals.
The third main area we will address in 2014 is how companies can implement change in human capital management. As organizations continue to adopt next-generation technologies and re-engineer core HR processes, change is inevitable. For many the challenge goes beyond the ability to implement technology; it also involves people and processes adapting to the capabilities the new technology brings. The Ventana Research benchmark research model and its Maturity Index are built to identify issues in people, processes, information and technology and their interconnections. We expect many organizations to update their core HR processes and link them to their broader talent management efforts. And with the employer mandate provisions of the Affordable Care Act poised to go into effect at the beginning of next year, this will likely be even more of a focus because many companies will have to update their HR processes, information and technology capabilities to comply with the law.
There is still much work to be done in other areas of human capital management. In our last benchmark research on total compensation management and its integration with talent management more than half (52%) of organizations had no plans to integrate their compensation and talent management systems. We also have just completed new research on payroll management and current level of efficiency but also as it finds compensating management is critical system to integrate in 45 percent of organizations. We will revisit this area with an updated Value Index on compensation management to help examine the latest advancements in products. We will also examine where the core and next-generation HR technologies are helping transform how employees work and are productive in any organization.
In 2014 the trends that have shaped HCM over the past several years will continue to evolve but with a stronger focus on engaging the latest generation of employees. Companies that embrace new HCM technologies can apply them in ways that yield business results. Doing so will require more in-depth partnership with the business and the finance organization to justify and help fund the investments. Social media and mobile applications within specific HCM processes will increase engagement and reach. In addition, less touted but equally valuable investments in the integration of core processes like HR, payroll and talent management will improve the quality and visibility of human capital information across the organization. In contrast, businesses that choose to stay with older technologies and processes may find themselves less competitive because they lack access to the information and tools they need to attract and retain a high-quality workforce. The advancements in cloud computing have facilitated the timeliness of deploying new applications and get off of the outdated technologies and to meet new generation of HCM needs.
Please download and read the full research agenda. I look forward eagerly to sharing the new insights we discover this year and how I can interact with you as a client or casually across social media to improve human capital management.