What will be the Future of Human Capital Management?

November 18, 20158:00 am916 views

Within the human resources technology market, human capital management has long been the major leagues — the category that includes the largest and best-known brands in HR technology.

The future of the Human Capital Management market is changing in many of the same ways that work itself is changing. HCM technology may have created efficiencies and cost savings by automating manual and paper processes, but it also reinforced a top-down, hierarchical, command-and-control approach to business.

According to a recently released report by the Starr Conspiracy titled, “2015 HCM Vendor Brandscape”, it takes a unique look at the $131 billion market of human capital management solutions and predicts which brands will dominate and advance in the coming year.

The new world of work is bottom-up, peer-to-peer, and networked. There’s probably more change going on in the global workforce than at any time since the Industrial Revolution.

In human capital management,  customers’ preferences for and resulting rapid adoption of cloud-based solutions for HR technology made it possible for disruptive technology and service delivery models to go to market quickly and grow rapidly. However, this trend, though important, is not particularly noteworthy.

In the near future, we expect three major trends shaping the evolution of human capital management software, they are:

  1. The rise of the contingent workforce. Employers now need fewer workers as direct full-time equivalent (FTE) employees. For example, when Facebook bought Instagram for $1 billion in 2012, it had 13 employees. Even now, it only has about 80. Compare that to Kodak, which went bust in 2012 and had 145,000 employees in its prime. Smaller companies can compete with larger ones, and employers of all sizes are more interested in leveraging contingent, on-demand labour to mitigate the uncertainty and sudden changes in today’s business environment.

See: 5 Efficient Tools for Human Capital Management

  1. The quest for on-demand workforce optimization. Organizations are wrestling with systems and data integration for a reason. They want access to real-time, on-demand analytics to guide decision-making. And there are many new concepts and technologies emerging that will allow organizations to engage, analyze, and optimize their workforces more strategically.
  2. The emergence of HCM for small and medium-size businesses. Once the exclusive domain of larger enterprise customers due to complexity and expense, it’s now possible for even small companies to manage payroll, benefits, and time and attendance efficiently and inexpensively. The shift of these capabilities to be more efficiently self-managed to the SMB is more than a trend — it’s a force in the global economy. And as a result, these companies and their workforces will look more different in the next 20 years.

Based on these trends, the future of HCM as a technology and as a practice will require current market leaders to reinvent their products and the way they help their customers adapt to the new business reality.

Since there’s a level-playing field now created, it is possible for new emerging vendors in the human capital management market to disrupt, gain traction and market share like never before.

Most projections place the HCM technology market at $11billion in 2016, however the Starr Conspiracy believes the size of the HCM market alone will be approximate $131 billion.

Internationally, in both mature and emerging geographical markets, the movement of HR technology to the cloud will continue to create even more opportunity for HCM platforms that can truly support the complexity of global implementations.

Also read: Balancing the Promise and Pitfalls of Human Capital Analytics

Image credit: hci.org

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