May 31, 2019
HR tech is a booming industry, with over 200 start-ups focused on that particular sector launched in Germany alone. Many of these companies are reshaping or will reshape the way businesses work, with the ultimate goal being the complete digitization of HR departments. By automating processes and augmenting the human experience, they aim to bring tons of value to organizations of all shapes and sizes. But how does that work look in practice, exactly? And what makes HR tech so attractive to investors?
Anna Ott—a Berlin-based expert on HR tech, who has been working in HR and Talent Acquisition for the past 19 years, was so kind to have a chat with me on the ins and outs of the newest trends in digital transformation in companies.Anna Ott HR Tech Expert and Consultant
Having built her career from an HR consultant in an employment company, to Managing Director of an HR consultancy company, Anna spent over 4 years working for Deutsche Telekom, where she advocated for disruptive HR approaches and early adoption of HR Tech. She is now an HR Tech consultant with great experience in helping entrepreneurs build HR tech products, educating about this market, and advising start-ups on their growth journey.
In our conversation, Anna Ott and I discussed the impact of technology on HR. We spoke about how HR tech helps businesses realize their mission by solving their most burning problems (real use cases provided!) and tackled the topic of HR niches most prone to automation and worth investing in. Last but not least, we pondered the Future of Work—will technology actually replaced HR someday? Look for the answers below.
Joanna Staromiejska: You help HR organizations transform digitally and learn more about HR technology. Why is that important?
Anna Ott: I would say that the HR department in a typical company is still mostly a low-digitized part of the business, regardless of the size. Having worked in HR for almost 20 years, I see it as huge potential that’s still unleveraged. Seeing that HR continues to be the backbone of most SMBs and corporations, we should be using this opportunity to actually increase efficiency through technology and automation.
Furthermore, a modern, “consumer grade” experience is nowadays increasingly expected by candidates, job seekers, and even existing employees. This is exactly what organizations can achieve by introducing state-of-the-art technology for talent management. Although the benefits offered by such systems seem to speak for themselves, most organizations continue to approach the idea with considerable skepticism and are slow to devise and adopt a talent strategy.
JS: What are the most burning issues that HR people have to deal with and how would automation help?
AO: Asked about their biggest pain point, most HR people would point at “talent acquisition,” because it’s the most obvious problem. This is why there are so many companies out there building products focused around this particular issue, and why the sector continues to draw backing from big-name investors.
But as much as I love this development, I’d also have to say that the biggest potential of automation lies beneath the surface—in involves detecting the skills of our entire talent pool, including former applicants, existing and former employees, as well as all sorts of other “contractors” we have been in touch with. If we can find ways to capture capabilities and skills across all those groups, maybe even in real-time, that would unlock so many great use cases.
JS: The global HR tech market is booming, with its current value nearing as much as $400 billion. What’s driving this growth?
AO: Simply speaking, the demand for HR tech is simply this high, regardless of type of said tech we’re talking about. Everyone has at least once in their career identified an HR process that was broken one way or another. For example, if you work a corporate job and it takes ages to get reimbursed for a travel expense claim, then the process needs to be optimized somewhere. We see advancements in consumer industries, so why is enterprise still lagging behind?
We have basically resigned ourselves to enterprise software being complicated and annoying, where software underpinning the administrative side of enterprise should be a breeze to work with. Obviously, a big chunk of that would involve HR tech.
JS: Theory is one thing, but could you maybe provide me with use cases of HR technology visibly enhancing business performance?
AO: Of course. For example, there’s a company called jobpal, which specializes in developing chatbots for use in talent recruitment, and their client portfolio includes the Airbus consortium. The aerospace giant has deployed chatbots to engage with potential candidates to assist them with finding relevant job offers and to answer whatever questions they may have.
This chatbot helps job seekers decide whether to apply or not. Rather than merely sourcing talent, its role is to capture the candidates’ attention and ultimately convert them into applicants, which is an extremely tough task. On top of that, Airbus has automated a process that usually requires human staff, and furthermore managed to augment it with skills that only an AI-powered solution can provide. How?
Well, they can go back to candidates, regardless of the engagement stage they’re in or the communications timeframe, and say: “We have a new job offer for you. Would you like to apply?” This level of control over potential applicants is hard to achieve using just human capabilities and resources.
This case perfectly illustrates that implementing HR tech is often a smart choice which unlocks a variety of use cases that would never have been discovered without it.
As the debate on the future of work and the impact of AI on jobs, skills, and the entire industry heats up, conflicting information from various experts keep pouring in and muddying up the waters even more. Anna shared with me a handful of insights on what niches are currently trending and the direction in which the entire HR tech sector seems to be heading.
Anna claims that there’s a high probability that soon enough around 50% of the talent acquisition tools will be provided by the growing HR tech market. On the one hand, it’s good to have plenty of choices, but on the other, the market is bound to become saturated at some point. However, there are still a lot of areas that are waiting, or even longing for, innovation and improvement.
AO: I’d say that two things will be key to the future of work: skill detection and skill development. Right now, time, manpower, and skills are the hottest currency. Sharing know-how and having the capability to develop additional skills quickly is also crucial. Additionally, organizations should always strive to know what skills they have at hand at any given point in time, and then decide what to do with them and how to enable individuals to build up more revenant skills.
The coming year will be an exciting time for anyone who’s into flexibility, adaptability, curiosity, and all those things. Everyone who’s keen on acquiring new skills. If that’s natural for you as a person, you’ll be fine. If it’s not really your cup of tea, it will be hard to stay in an organization that tries to stay on the cutting-edge without changing and reinventing yourself all the time.
From a demographic standpoint, millennials and the generations that came after them should be fine, as they’re the ones who are currently shaping this shift towards continuous skill-learning.
All in all, it’s not just about adopting new things, but also adapting to new conditions. If you have those two things while everything is volatile, you’ll have no trouble finding and staying in a job, as well as shaping a personalised career.
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