人力资源技术领域的120亿美元机遇+The+$12+Billion+Opportunity+in+HR+Technology.pdf

2022 Boston Consulting Group1The$12 Billion Opportunity in HR TechnologyMARCH 10,2022 By Nithya Vaduganathan,Colleen McDonald,Allison Bailey,Renee Laverdiere,David Allred,and Sesh IyerA flood of new solutions is vying to help companies manage their workforce.In this crowded market,players can pursue three strategies to win share.Talent management is a large and growing challenge at many organizations,andtalent management providers are racing to roll out new offerings that can helpbusiness leaders and managers improve how they recruit,oversee,develop,andretain human capital.Many HR tech companies that formerly specialized in asingle aspect of the talent management value chain are building out morecomprehensive offerings,and others are growing through consolidation.Dozens of 2022 Boston Consulting Group2companies are competing to expand their offerings,causing significant confusionin the market.To create clarity forsolution providers,werecently surveyed morethan 100 CHROs andother business leaders tounderstand their currentpain points and unmetneeds in human capitalmanagement(HCM)technology.Fortechnology providers and the investors that back them,the results offer realinsights into what businesses want.We have also identified several ways that HCMtechnology companies can create advantage by focusing on differentiated data,skilltaxonomies,and a position that connects or orchestrates multiple parts of thetalent value chain.The next 18 to 24 months will be a critical window for providers to stake out theirpositions in this crowded and highly active market.Those that understand theneeds of the market and design smarter solutions to meet those needs will find theodds in their favor.An Explosion in ActivityThe past few years have seen an explosion in activity for talent managementtechnologies.Companies are wrestling with the growing challenge of managingtalent amid changes in work norms due to COVID,the gig economy,and otherfactors.But this challenge brings opportunity,too.In 2021,more than$12 billionin venture capital poured into the HR technology market,with the rate ofinvestment more than tripling from 2020 to 2021,as investors back companieswhose ideas are promising.(See the exhibit.)HCM tech companies canfocus on data,taxonomies,and connecting ororchestrating the value chain.2022 Boston Consulting Group3BCG breaks the talent management value chain into six steps,with specificproviders specializing in each:Anticipate future talent needs.Labor market analytics solutions like EmsiBurning Glass offer rich data about talent supply and demand at the skill levelto inform workforce planning.Assess skill levels.Companies including EmPath and SkyHive use AI-powered solutions to assess and infer skills and proficiency levels in a morerobust manner and at scale.Source talent and match internal candidates to opportunities.Inaddition to continued innovations in recruiting technology(such as HireVuesvideo interviews and chat-based candidate interactions),we have seen newdigital sourcing platforms like Catalant,InnoCentive,Toptal,and Upworkemerge to offer access to highly skilled labor“on demand.”Talentmarketplaces provided by companies such as Gloat,Hitch,Fuel50,andEightfold AI are emerging to better identify and manage internal talent andenable employees to move throughout the organization.2022 Boston Consulting Group4Enterprise Customers Want an Integrated SolutionDespite all the activity,in many ways the field is still evolving and maturing.Forexample,skill taxonomies are of mixed quality and do not always align with eachother,requiring significant adaptation to specific industries and individualcompanies.Solutions still have only a limited ability to accurately infer employeeskill levels,and even sophisticated matching platforms rely almost exclusively onskills to create matches;they dont consider factors like personalities or workpreferences that we know are important in building teams.And applications thatrely on analytics need to build controls to identify and dismantle biasrather thanamplifying it as some early-stage use cases have done.More broadly,companies struggle to keep up with the variety of disconnectedsolutions for individual aspects of the value chain.That has led to a kind of armsrace in the industry,as providers that are strong in one area of the value chain seekto address other areas.For example,Microso announced a partnership in early2020 with Oracle to track job applicants more effectively by integrating LinkedInemployee profile data with the Microso Viva platform.Similarly,staffing agency Develop the skills and capabilities of the current workforce.A growingsuite of learning and development companies like Degreed,EdCast,andBetterUp enable reskilling and upskilling and help managers identify internalcandidates for specific roles.Embed workers in the organization.Solutions like Starmind and MicrosoViva Topics promise to help workers navigate the organization and quickly getup to speed.Manage employee performance and engagement.Companies like Latticeand 15Five offer continuous performance management solutions withintegrated performance appraisals,goal setting,and real-time feedback.Othercompetitors,including Perceptyx,help employers keep a pulse on employeesentiment through surveys and sensing and by crowdsourcing solutions.2022 Boston Consulting Group5Randstad launched a new offering in June 2021,called RiseSmart BrightFit,whichcombines labor market data with skill assessments to recommend roles andcourses for transitioning employees on the basis of skill gaps and proficiency levels.Other companies are building out their offerings through acquisition.For example,Workday made several acquisitions to expand its offerings,including Peakon($700million),which offers a tool to measure employee sentiment and engagement.That follows a bigger deal in 2018,for enterprise performance managementplatform Adaptive Insights($1.6 billion).Over the long term,these innovations and investments will transform howcompanies manage talent,creating more equitable opportunities and unlockingfluid talent to meet some of their most pressing challenges.In the short term,however,there is significant confusion in the market.HCM soware players,traditional staffing companies,strategic advisory firms,HR tech disruptors,and bigtech are all playing in the space,looking to establish a favorable position as theecosystem matures.To enterprise customers,it can seem as if everyone is trying todo everything,and theres no clear winner just yet.According to one survey,astaggering 94%of HR decision makers struggle to keep up with the latesttechnology trends and developments.This confusion comes through clearly in BCGs survey results as well.We askedmore than a hundred HR and business leaders for their thoughts about HCMtechnology and their most pressing pain points.Among the most important:In the short term,there is significant confusion in themarket.Managing multiple sourcing functions,which leads to significant complexity 2022 Boston Consulting Group6Our conversations with HR leaders suggest that the most important coordinationneeds to happen across the value chain,as companies look for solutions thatintegrate disparate data sources,talent sources,and functionality to manage talentmore seamlessly.Three Strategies for Talent Management Providers toCreate an EdgeTo create advantage in the fast-moving HR tech market,our analysis suggests threemain strategies that talent management providers can apply to create a defensibleadvantage.Develop differentiated data to power predictive analytics and insights.In aworld powered by AI,data is king,and the scale,richness,differentiation,timeliness,and quality of the data all matter.Accurately identifying skillrequirements and assessing capabilities requires working with macroeconomicdata,job postings,rsum and career histories,candidate profiles,the hiringpipeline,training records,performance data,and even“on the job activity”forexample,data about which programs and applications people use in their day-to-day work.Incumbent HCM playerswhich have entrenched systems and alreadyserve as central HR data repositories for most companieshave a strong positionfrom which to expand and capture more value.Staffing companies haveproprietary data derived from their activitiesinformation about who neededwhat in terms of staff and when,how that staff performed,and how that staff waspaidthat they can use to predict future talent needs and improve candidatematching,creating a positive feedback loop.Planning processes that fail to identify the skills needed to meet futurebusiness requirements Coordinating the ecosystem of various upskilling and reskilling providers orsolutions 2022 Boston Consulting Group7Another control point for data are talent marketplaces,which have an advantagebecause they actually create data through transactions.Learning platforms knowwho is learning what and how well individuals are mastering new skills,so theseplatforms can offer in-depth data on skills to aid matching.Finally,access to toolsand applications that workers use in their day-to-day jobs can serve as a controlpoint to yield richer data than external scraping alone.For example,MicrosoViva Topics uses AI to determine topic expertise in an organization by scanningemployees documents and emails.Create a strong skill taxonomy,with the capability to adapt it for industryand company context.Almost every talent platform and external data providerhas its own skill taxonomy or ontology to enable talent matching,but some arebetter than others.In our work with clients,we have found that most companieswill need to invest in making their skill taxonomies fit for purpose(even those thatare based on troves of data).Developing usable taxonomies can require aligningthem with multiple external taxonomies,simplifying them using machinelearning,and refining them further with functional and industry experts tounearth the common skills at the right level of granularity.For globalorganizations,this process also requires understanding the way that languages canhave different terms for similar types of skills.And skill taxonomies arent staticthey need to evolve over time as needed skillsets change more quickly than everbefore.Establish a position that connects or orchestrates multiple parts of thetalent management value chain.Companies are eager for more-integratedsolutions.An offering that first helps companies anticipate workforce needs andidentify potential matches from across internal and external talent sources andthen connects them with a set of reskilling and upskilling solutions will quicklybecome“sticky”to customers.Establishing such a position does not requireowning all of the solution componentsindeed,our research suggests thatcompanies overwhelmingly want to be able to access a suite of upskilling providersrather than operating in a closed ecosystem.But companies that establish aposition early in key points of the value chaintalent matching,for example,or 2022 Boston Consulting Group8even becoming the storefront for a variety of skilling activitiescan create anadvantage through strong customer relationships and by setting the terms ofengagement for other ecosystem suppliers.Implementation Must Go Beyond the Technology ItselfLast,the change management component of implementation is critical.Providersthat treat talent management technology as a plug-and-play solution are settingthemselves up for failure.Instead,BCG research has found that the real value ofdigital technology comes from realigning business processes and ways of working.A good rule of thumb is that 70%of the value comes from changes to the business,20%from the technology itself,and 10%from the underlying algorithms.In fact,many enterprise companies looking at this market report that an intuitive userinterface and a strong client success team are key considerations in their choice ofsolution partners.But implementation needs go well beyond the technical domain.Companies alsoneed partners that can work with them to adapt their skill taxonomies for industryand company specifications,help them learn from other companies journeys,andpartner with them to envision their own future of work.More than any platformimplementation,this journey is about changing an organizations culture.Enterprise customers will flock to providers who can help them do just that.The next 18 to 24 months will be a critical window of opportunity for talentmanagement providers to stake out their positions,establish their role in emergingtalent ecosystems,and claim share.Players and investors should keep a focus onenterprise customer needs and key control points and tailor their strategiesaccordingly.The authors thank Sibley Lovett,Max Santinelli,JinK Koike,Andreas Liedtke,and LenaDavid for their thought partnership and contributions to this article.2022 Boston Consulting Group9The BCG Henderson Institute is Boston Consulting Groups strategy think tank,dedicated to exploring and developing valuable new insights from business,technology,and science by embracing the powerful technology of ideas.TheInstitute engages leaders in provocative discussion and experimentation to expandthe boundaries of business theory and practice and to translate innovative ideasfrom within and beyond business.For more ideas and inspiration from theInstitute,please visit our Latest Thinking page and follow us on LinkedIn andTwitter.2022 Boston Consulting Group10AuthorsNithya VaduganathanManaging Director&PartnerBostonColleen McDonaldPrincipalDenverAllison BaileyManaging Director&Senior Partner;Global Leader,People&Organization Practice;formerBCG FellowBostonRenee LaverdierePartnerHoustonDavid AllredDV Managing Director&PartnerDigital Ventures SeattleSesh IyerManaging Director&Senior PartnerWashington,DCABOUT BOSTON CONSULTING GROUPBoston Consulting Group partners with leaders in business and society to tackle theirmost important challenges and capture their greatest opportunities.BCG was thepioneer in business strategy when it was founded in 1963.Today,we work closely with 2022 Boston Consulting Group11clients to embrace a transformational approach aimed at benefiting all stakeholdersempowering organizations to grow,build sustainable competitive advantage,and drivepositive societal impact.Our diverse,global teams bring deep industry and functional expertise and a range ofperspectives that question the status quo and spark change.BCG delivers solutionsthrough leading-edge management consulting,technology and design,and corporateand digital ventures.We work in a uniquely collaborative model across the firm andthroughout all levels of the client organization,fueled by the goal of helping our clientsthrive and enabling them to make the world a better place.Boston Consulting Group 2022.All rights reserved.For information or permission to reprint,please contact BCG at .To find the latest BCG content and 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