1. Venture capital and private equity companies invested $1.87 billion in HR and workforce-related products during the past two years.
Investments in HR technology and disruptive HR tech vendors are skyrocketing and this number doesn't even take into account the wellbeing or educational technology markets. Of this $1.87 billion, more than $900 million was invested during the first half of 2017.
2. 45 percent of large companies and 51 percent of mid-sized companies are increasing their spending on HR tech, with only 8 percent and 10 percent, respectively, spending less.
Expectations of investors for a market to grow need to come from somewhere. It's only natural that the expected growth follows a measurable increase in adoption of HR tech by large and mid-sized companies, as shown by the HR systems survey by Sierra-Cedar.
3. Only 39 percent of large companies and 49 percent of mid-sized companies have their HR solution(s) adopted to the cloud.
A lot of enterprises and companies still have to make the leap towards the cloud. Primarily because of the tech debt that comes with massively adopting legacy on-premise systems in the 90s. This means there’s lots of room for growth for HR tech vendors. This needs to be nuanced however, as major players from different domains are creating more partnerships and unifying specialized HR offerings with core HR systems.
4. Businesses around the world spend about $140 billion on L&D annually ($500 to $3,000 per employee depending on the industry).
Of that spending, roughly $4 to $5 billion is spent on core learning platforms, while the rest is spent on tools, content, instructors, classrooms, and facilities. Supporting continuous learning has been a thing for a while now, and with the increase in requirements towards digital skills and re-schooling of employees, the Learning & Development tech market has boomed beyond imagination.
5. While companies spend around $1,200 a year per employee on employee training, recruiting spend is about three times larger.
The reason is simple. A US analysis showed more than 20 percent of all US workers change jobs every year. This means that employers are constantly advertising, sourcing, recruiting, interviewing, assessing, and onboarding new people. If you look at the recent purchase of Glassdoor by Recruit holdings for $1.2 billion, that level of spending should come as a surprise to no one.
6. The average large corporation has 15 or more systems of record and it is not unusual for companies to have 20+ payroll systems (simply because of the difficulties of following employment laws in different countries).
This means that to get a single view of the workforce (which generally doesn’t even include part-time or gig workers) organizations often have to buy a new ERP system and consolidate these islands of automation. When Bersin asked companies why they're spending tens of millions on new HRMS platforms. Many of them said its to consolidate data and get access to more accurate analytics.
7. Since 2014, the percent of companies that have moved to advanced reporting, and doing predictive analysis, has almost doubled.
Companies are now taking this domain more seriously than ever before. Increasingly they're putting in place data quality programs, analytics fluency learning, dashboards, and data-driven decision-making processes. In other words, people analytics is now a must-have discipline within HR and business. At least if you want to stay ahead-of-the-curve and apply data to find, retain and improve upon the workforce of tomorrow.
8. The fastest growing analytics spending area is embedded analytics, with an expected 109 percent increase in spending.
(“Embedded” means the analytics are available and produced as needed, without the user having to generate reports, the same way insights works in Officient)
Not surprisingly, we now see a very mature and robust vendor market in this area. Every major HR platform provider now has a Big Data cloud service, a set of embedded analytics dashboards, and many advanced reports to help predict attrition, identify bias, and segment the workforce.
You can find the full 'HR technology disruptions for 2018 by Deloitte' & Josh Bersin report here.