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The development within HR tech is not only driven by technology, but also by tightened legislation and increased requirements for transparency. HR technology is today a strategic tool that supports compliance, employee experience and business development – and it affects how you should prioritise and invest. In this article, you can read about four trends that have a direct or indirect effect on the bottom line, and how you as a CFO or HR Director can navigate them.
As HR technology evolves, HR Directors – and ultimately the CFO – face the challenge of choosing solutions that not only meet current requirements but also support future strategic development. Technology is particularly shaped by market trends – and the same applies to HR tech – but not all have the same weight in terms of quality and potential to create value in practice for organisations. Therefore, it is essential to be able to distinguish between trends that can deliver long-term benefits across the entire organisation and those that merely represent a short-lived hype.
Studies from 2024 show that 60% of HR Directors are uncertain about how new technological trends will affect their systems and workflows – particularly how generative AI can be incorporated effectively and purposefully into their HR systems. At the same time, 76% believe that it will impact their organisational success if they do not implement generative AI within the next two years.
This paradox leaves a sense of uncertainty about the future: HR Directors know that changes are necessary but are in doubt about exactly how to handle them. This fact is only reinforced by 56% of HR Directors believing that their current technological solutions do not meet either their present or future needs, which is a clear expression that this is a business area that has typically experienced being deprioritised and therefore underinvested.
So there is a need for decision-making – but even more important is the need for cross-organisational knowledge sharing about how both CFOs and HR Directors can establish the necessary foundation prior to decisions. And in this way ensure that the organisation in practice is ready to implement and truly anchor new technologies with an eye to the future.
Trends worth keeping an eye on, and which ultimately impact your bottom line
Whether you are considering investing in new technology, or if you are contemplating how your current HR system landscape should be further developed, trends can be a good starting point for inspiration. Therefore, below, we present four of the latest and most significant trends within HR tech. Common to all of them is that they revolve around optimising the user experience for both the employee in the HR function and creating impact for the end user out in the organisations.
The four trends constitute a combined business opportunity where AI-driven solutions and integrated platforms can optimise organisations' output through work with technology. For the CFO, this means measurable returns through better resource allocation, reduced employee turnover and data-supported decisions that directly support the business' competitiveness and bottom line.
Four trends within HR tech
1.
Trend: AI-powered Skills Management
Purpose: Streamlines resources and time consumption
Skills Management is quickly becoming a central component in HR strategies, which is about optimising everything from talent development and resource utilisation to strategic workforce planning. By automating the mapping of skills across the organisation, it becomes easier for HR to identify competency gaps and adjust training and development initiatives. This is crucial for predicting future competency needs and adjusting the workforce composition accordingly.
Artificial intelligence (AI) plays an increasing role in this process by analysing complex data and grouping identified connections that might not be obvious. This automated process reduces the time and resources normally used for identifying matches between desired competencies and employees, while providing a more holistic understanding of the organisation's talent base. This makes it possible to react quickly to changing market and business requirements and ensures that the workforce is strategically positioned to meet future challenges.
2.
Trend: AI in HR technology
Purpose: Identifies more complex data patterns and supports decision-making processes
AI technology has likely already transformed many aspects in your company, but the real potential is far from exhausted. With the increasing use of generative AI, we see a deeper integration in terms of supporting the processes that emerge from HR.
A good example is that AI can improve the recruitment process by identifying top candidates faster and minimising the cost of mis-hiring, which most companies pay for directly or indirectly every day.
This technology enables more informed decision-making based on data. AI's ability to identify patterns and trends in large datasets makes it a powerful tool in strategic planning.
3.
Trend: Seamless Technology
Purpose: Strengthens user adoption and optimises interaction with systems
Seamless Technology is a concept for eliminating technological barriers that often arise when using multiple IT systems and instead creating a coherent process and an undisturbed data flow. Many organisations find that their technological landscape is siloed, that data is not shared across systems and that employees are therefore either forced to duplicate work, or that integrations are built inappropriately and weaken the quality of data.
With seamless integration, the goal is to create a smooth user experience across applications and systems, so employees can move effortlessly between platforms without having to switch interfaces or re-enter data.
It is primarily about strengthening the use of and confidence in data across systems.
4.
Trend: Pay Transparency
Purpose: System support eases the transition and will streamline work in the long term
Pay transparency is no longer just an ethical requirement, but a strategic necessity in tomorrow's business management. New legislative requirements and social expectations about equal pay have led to organisations having to be more transparent about their salary and compensation structures.
By implementing data-driven solutions that support salary benchmarking and ensure internal consistency, the necessary foundation can be created for a fair and competitive pay culture. The system support will also ease the workload associated with this transition by removing manual maintenance and instead powering structure and automation, which over time will be time-optimising when the system is correctly implemented.
This makes it easier to attract top candidates, motivate key employees and reduce inequalities. Organisations that proactively embrace pay transparency position themselves as attractive workplaces in a competitive market. Pay transparency promotes fairness and increases trust in the organisation, which is crucial for maintaining a healthy work culture and competitiveness.
How to assess whether a trend is the right match for your organisation
To effectively utilise new technological trends, it is crucial to understand them and assess how they fit your organisation. Needs vary between organisations, and this also means that not all trends are relevant for your company. It is about understanding the trend's complexity and its implementation in relation to your organisation's maturity and ambitions for the future.
Let us use skills management as an example, which is a promising trend and has the potential to streamline end-to-end from talent management to headcount planning, succession planning and especially also strategic workforce planning. The challenge is simply that the functionality is often not fully AI-supported and therefore requires a large volume of manual work to ensure a taxonomy and systematic mapping of skills. It therefore requires that your organisation is resource-strong with established governance and understanding of what skills management really requires in practice. This presents a significant question about whether the implementation of this trend (depending on how well-developed it is with the individual system supplier) can realise its potential value in relation to the organisational workload associated with it.
Through Basico's model for trend evaluation, you can make the necessary and critical assessment of whether a trend is the right match for your organisation.
Basico's trend evaluation model
1. Assessment of hype vs. relevance
To determine whether a trend is relevant for your organisation, you can investigate which trends are based on solid technology with documented results, and which ones only attract attention due to novelty value or marketing. This distinction is essential to ensure that resources and time are invested in initiatives that can actually improve organisational processes and support long-term strategic goals.
By focusing on justification for existence, technological maturity, gathering market insight and formulating a clear business case, you can determine whether a trend has real relevance and potential to meet your strategic goals.
For such an assessment, we recommend:
- evaluating the trend's potential value by identifying its reason for existence, and which issue it solves in the market
- examining how well-developed the technology behind the trend is, e.g. based on number of years on the market and available product information in the form of articles and illustrations
- reaching out to networks or an advisory partner for insights from the market on the quality of the trend's functionality in practice
- defining business case and objective for what impact the technology should have on your organisation.
2. Matching of strategic need
When a trend has been identified as relevant, the focus is on assessing whether it fits your organisation's needs and future development. By focusing on how the trend can solve specific issues, as well as evaluating the business case's continued validity, you can determine whether the trend can be integrated as a valuable component in your operational initiatives.
For such an assessment, we recommend:
- defining which specific issue the trend should address in your organisation and thus its potential value for you
- examining what impact the trend should have on your processes, as well as what the desired change in employee behaviour is
- evaluating whether your existing system can support your needs, or whether it provides greater value to replace/implement a new system that can support your long-term strategic goals and growth
- validating whether the business case still holds, and whether adjustments need to be made.
3. Evaluation of organisational readiness in practice
Before a new trend can be integrated into your organisation, it is essential to conduct a thorough evaluation of whether the organisation is ready for the transformations the trend will bring about. This involves not only an understanding of the technical and operational changes, but also of the maintenance requirements and organisational adaptations that come with it. Such an evaluation ensures that the organisation can handle both the immediate and long-term implications of the trend, and that the necessary resources and structures are in place to support a successful implementation. By focusing on ownership, scope of work, organisational maturity and risk management, you can ensure that your organisation is strategically and operationally prepared.
For such an assessment, we recommend:
- identifying who should own, maintain and be responsible for the trend/system
- examining the scope of tasks associated with implementation and operation
- examining how the trend will influence current vs. future way-of-working
- examining how large a gap there is from the current maturity level to the desired objective, and evaluating this gap's impact on skills, roles, responsibilities and tasks
- defining the risks associated with the trend and assessing whether your organisation is prepared and create a mitigation plan.
The extent of these considerations will naturally vary in relation to the trend's complexity and influence on the organisation.
Source references
1. Gartner, 2024 (hr-top-priorities-ebook-2024.pdf (gartnerweb.com)
2. Gartner, 2023 (Address the impact of AI: The 3 key focus areas for HR leaders)
3. Gartner, 2024 (hr-top-priorities-ebook-2024.pdf (gartnerweb.com)
Can we help you look into the technological future?
At Basico, we are experts in helping to decode these complex nuances and make well-informed and strategic decisions that drive your organisational transformation forward. Perhaps we can also help you ensure that your company's use of technology is optimally prepared to meet future requirements. Please do reach out for a no-obligation chat.
