Table of Contents
With little fanfare and a constant rush of incremental news bites, 2010 didn’t always feel like a lot was happening. In hindsight, there was a TON of structural change in the HR Industry. New powerhouses emerged. The focus of HR underwent a series of profound shifts. Years of impoverishment in marketing and sales investments began to show as structural weakness.
Here are the high points of the year we are wrapping up.
- Continued Economic Insecurity and High Unemployment
“It’s the economy, stupid.” That was the underlying theme of Bill Clinton’s successful political campaigns. It’s truer now than ever. Fear mongers try to scare HR Execs about pending attrition problems when the economy changes. The real issue is that organizational decision making is getting really conservative as people try to insulate themselves from making observable mistakes. The problem isn’t pending attrition, though. It’s that current attrition isn’t high enough.
- Social Media Continues To Blur The Distinction Between Work and Family
The bizarre notion that everyone should be polishing their social media image for the consumption of the resume police distracts from the larger question. Social Media in general (and Facebook in particular) allow no distinction between the public and private spheres. Everyone can know everything about everyone else when your friends, family and coworkers see the intimate details of your status updates. Stodgier companies are not getting comfortable with the increased casualness implied in this ground-leveling. Where hierarchical governance depends on a separation between work and not work, organizational effectiveness is declining.
- Shifting Media Landscape
Social media, changing generational dynamics, structural workforce changes and a rearrangement of priorities in HR and Recruiting are among the factors driving major change in the industry’s media landscape. Traffic to older more established properties are down. HR.com (-67%), Recruitingblogs(-57%), Workforce (-26%), ERE (-31%) and SHRM (-17%). New projects HRExaminer (our sentimental favorite) and TLNT are among the destinations to which traffic is flowing and increasing. Upstart Fistful of Talent (+57%) is growing rapidly. 2011 will be a major transition year for web based publications in the space. Harder to quantify decentralized journalism in blogs, web radio and Twitter are major forces in this redesign of the media ecology.
- Workday Redefines The HR Software Category
Have you noticed that legacy software always looks old and feels clunky? That’s because interface standards change faster than development teams can deliver code to an established customer base. The advantage of starting a software company from scratch is that you get to start where the standards are today. (The disadvantage is that you have to win accounts from existing contractual relationships with other providers.) Workday bravely entered the enterprise HR Software game this year. Their offering is reshaping the expectations of customers everywhere. Find your way to a place where you can see a demo.
- SuccessFactors Changes The Conversation
There are strongly mixed opinions about whether or not performance management is a good thing or a bad thing. But, operational managers will always prefer direct accountability to touchy freely concepts like synergy and teamwork. SuccessFactors, armed with massive promotional resources and a really good idea, has changed the fundamental HR conversation. Where HR’s role used to be administering the Performance Management and objective setting process, SuccessFactors makes it possible to use that process to drive execution at the line level. We’re noticing that people are busier and more effective everywhere we look.
- Learning Takes Center Stage
When growth was the norm, Recruiting was the best place to invest real HR dollars. Talent acquisition was always harder than talent development. Churn was an implicit part of the headcount equation. While it remains to be seen whether or not this is a permanent thing, Learning (we used to call it training) is moving to the forefront of strategic HR thinking. Making your workforce agile depends on being able to redeploy existing employees. Cheap video, YouTube production standards, Bite Sized content and employee self-service are turning the old Training Department into a cafeteria of choice. Talent Management is the phrase word used to describe this shift in priorities.
- SABA Drives HR’s Role in Communications
We reviewed SABA’s communications and collaboration toolset earlier this fall. While there will be some heated debate between IT and HR about who should be in charge of the collaboration environment, it seems like a logical win for HR. Collaboration is a world in which technology should be extremely transparent. As long as HR takes up the challenge and works to make the platform recede behind the energy of collaboration, this is an amazing new frontier. SABA is likely to continue to lead the way.
- Video Grabs Traction
Say all you want about the propensity of video to cause discrimination. Hiring managers want to see people before they interview them. While conservative HR decision making (see economic insecurity above) will keep video interviewing and screening out of some organizations for a while longer, it’s here to stay. Video saves travel money, time and creates an environment for better decision making. 2010 was the year that the trend moved decidedly towards the use of video.
- Differentiation is at an All Time Low
For the most part, you simply can’t tell one HRTech Vendor from another. And, the vendors don’t know it. They are so busy believing their flimsy marketing materials that they can’t see the erosion of their brand. This difficult state of affairs began when vendors cut their marketing and sales functions to protect their technical core. Without guidance from marketing and sales, the development teams created a whole slew of new functionality. It looks like a marketplace of Swiss Army Knife purveyors.
Those are the key notes from my 2011. What did you see?
2011: What’s Coming?
It would be nice to have a crystal ball that wasn’t quite so cloudy. In the two long years since the economic downturn started in earnest, seeing what’s coming has been hard to do. These days, it’s not uncommon to hear normally sensible business people talk about not having a long term view as an acceptable thing.
It’s hard work to see the future in times of upheaval. You’d think that highly compensated executives could do better than the ‘forecasting is dead’ point of view. You’d be tempted to think that part of the big compensation packages are earned by actually having a vision of the future and organizing around it.
But, we’re getting used to ass-covering as a way of doing business.
Risk averse conservative decision making was the norm last year. You had to look far and wide to find entrepreneurial experiments in the incumbent players. Mostly, the top folks pressured the trench level workers to produce results according to the performance management plan. Doling the problem out in egalitarian bites was the 2010 substitute for vision.
In many ways, the best forecast for 2011 is that it will be more of the same. People will be pounding out results so that they can be measured as acceptable and keep their jobs. Q1 stock market wins will be wiped out by the still unsolved housing market problem in Q2. The vision shortage will result in more layoffs. Joblessness will not get much better.
Eeyore would be satisfied.
Surprisingly, there’s a lot of change in the air. It’s like early spring in the economy and here in our industry. If you look right beneath the gloom, you’ll see all sorts of agility and entrepreneurial stuff. It just isn’t happening in the incumbents or the big box markets.
Here in San Francisco, there are more than a dozen small startups in the HR Technology space alone. There are another 25 or 40 around the United States. India, China, Australia and even Western Europe all are showing signs of startup activity.
These bright spots are uniformly operated by younger folks with more to win and less to lose. The conservative thinking that applies to operations that have something to lose doesn’t apply in the startup world. When startups are run as if losing ground was the worst that could happen, they always fail. Funny thing is that it’s also true for established players. It just doesn’t feel like it.
So, while the mood is conservative and anti-experimentation, here are the interesting things that will flower in 2011.
- The O Starts to Disappear, RPs and HRs Growth Accelerates
Outsourcing is not going away. No matter how much we long for a better time when people routinely lost life and limb in factory jobs, we’re entrenched in the information economy. HR and Recruitment Process Outsourcing was a novelty when it first arrived a decade ago. Increasingly, business leaders understand that Recruiting and HR are just like oil changes. It’s best to get them done by professionals who know how to apply world class standards to your situation. Growth means that the emphasis on the fact that these services are outsourced is archaic. As RP and HR providers learn to really distinguish their brands, the emphasis will be placed on the delivery of services and not the location of those services.
- Small Startup Entrepreneurial Explosion
Sustained unemployment and difficulty getting starter jobs portends great things for entrepreneurial activity. Between the people who are tired of working three jobs for one paycheck and those who simply have a lot of time on their hands, there’s a great startup workforce ready to be deployed. Working on the come makes more sense than sitting on your hands. As HRTech migrates to a universe of apps and ecosystems, there are lower barriers to entry and huge opportunity. Expect to see a ton of startups.
- Standards Emerge in SaaS Procurement
Big companies continue to try to buy SaaS as if it were licensed software being run on premise. The exact deal with SaaS is that it’s less expensive because it’s not tailorable. Therefore, the procurement process is going to change radically. Expect to see a lot of talk about how to buy SaaS software in 2011.
- It’s the Year of the App
HRTech is a backwater. Throughout the rest of the High Technology world, apps have become the foundation for service delivery. The model of cheap, easy to install single purpose tools that integrate smoothly with the overall platform is an idea whose time has come. Expect that every HRTech vendor is going to be talking about its App Store. What will differentiate one offering from another is the level of greed in the platform vendor. There’s a reason that the Salesforce.com version of this isn’t doing very well.
- Talk About The War For Talent Returns
If you listen closely, you can hear it already. In some areas (health care and IT), labor shortages are aggravated by the housing crisis. Where it was easy to move someone from Raleigh to San Francisco five years ago, it’s virtually impossible today. That means that the competition for workers in local markets will heat up. It’s really a case of harsh economic friction and a market driven decline in workforce mobility. But, given the shortage of imagination we face, the old saw will get trotted out and reinflated.
- Monster Returns To Job Board Leadership
Sometimes, the leadership at Monster is reluctant to wear the responsibility it has for driving the job board industry. It seems to come in waves. After all, these are the guys who invented the industry. The company’s culture, which is half pioneer and half monster, goes through wild swings that are at least somewhat related to the cyclical nature of the business. At any rate, they are coming to market with really smart ideas about where worker information belongs and how to manage it. The next step in job boards is tighter integration with customers and Monster will lead the way.
- Software Definitions Change
Software is a medium like paper, radio, television, video, film, CDs, digital file formats. It only really makes sense when it is loaded with data and expertise. For years, the financial community has rewarded software companies for not having content associated with their product. Today, the best software comes pre-populated with useful information. Increasingly, valuations will shift to reflect this. It’s the revenge of the bricks and mortar companies who have survived the first generation of the internet.
- It’s the Ecosystem, Baby
Companies are made by the company they keep.
As hierarchies shrink and more work is done outside of core expertise, the question of how to manage HR in the ecosystem starts to bubble to the top. Your local community, educational suppliers, service providers, vendors, channel partners, distributors, development community and other external entities are all essential to organizational success. Learning to spread effective practices and standards throughout the entire ‘ecosystem’ is becoming the essence of enterprise behavior. This is the year that the HR industry takes note.
So, there’s a ton of material for theses and event programming. We’re at an inflection point even though it seems gloomy. Material advantage can be had by noticing and capitalizing on these trends.
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