Enhancing the “Human” in Human Capital Technology: Observations from Recent Conferences
Friday, April 27, 2018
Posted by: Gary Hotze
Corey Greendale, First Analysis
We recently attended two conferences focused on human capital technology: HR Transform, a first-time event bringing together providers of HR technologies with HR leaders and professionals, and the ASU+GSV Summit, an annual event at the nexus of education and HR technology, featuring public and private companies, investors, academics, and thought leaders. We hosted some 60 meetings over the course of the conferences, and while topics varied by company, two consistent themes emerged:
The Convergence of Education and the Workforce
We are increasingly seeing companies and investors who previously focused mainly on institutional education (i.e., the K-12 and higher education markets) investing time and capital in the corporate market. Some of this is a “grass is greener” phenomenon, based on the belief that the corporate market is larger and that it’s easier to sell to companies than to schools, universities, or students. However, we believe a shortage of professionals with the skills needed to fill specific jobs, combined with students’ increasing sensitivity to the ROI on assuming debt to pay for education, is resulting in a need to eliminate the artificial divide between life as a student and life as a working professional. We expect technologies to continue developing that allow employers to understand better and predict potential employees’ skill set and cultural fit in their organization, rather than relying solely on general signals like alma mater and GPA. Concurrently, we see significant growth opportunities for technologies that allow potential employees to discern and cost-effectively attain the specific skills they need to maximize their career prospects, productivity, and professional satisfaction, starting before they’ve entered the labor force and for their entire working lives.
People as a Competitive Advantage
Machine learning may be slower to transform human capital technology than some other industries, in part because the quantity of data generated isn’t as robust as in digital commerce, for example, but we believe the transformation is, nevertheless, coming. However, rather than looking to such technologies primarily to replace people, we think employers are looking for solutions that strengthen their relationship with employees, build culture, and enhance individual and team effectiveness. Between low unemployment, the fact that people are facing information overload at both work and home, and the preferences of younger workers, who are likely to switch jobs many times in their lifetime, the ability to attract, engage, retain, and advance talented employees is an increasing priority of the C-suite. We believe performing well on these fronts will become a more significant competitive advantage over time, and we foresee a considerable opportunity for tech companies offering practical solutions in these areas. As players in the space proliferate, we believe the winners will be those that design solutions with people squarely in mind, building intuitive user experience and effective customer success functions in addition to differentiated tech, and software designed with empathy for its effect on those who use it.