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Despite the pandemic, another boom year lies behind for the IT industry. HR software for human resources management in particular has been one of the market's driving forces for years. The demand for modern solutions for personnel management remains high.
HR software from the cloud, mobile applications and talent management may already be old hat, but they will still be the focus of IT and HR decision-makers in software projects in 2023. A new topic on the agenda is HR analytics, i.e. big data in HR management. The increasing integration of collaboration tools in HR solutions will also intensify in the coming years.
While big data and predictive analytics were reserved for business intelligence software until recently, there are now more and more useful applications for HR as well. HR analytics or workforce analytics go beyond traditional personnel controlling. While controlling largely evaluates data from a retrospective perspective, HR analytics enables predictions of future developments.
Workforce analytics is used to analyze workforce structures in order to adapt them specifically to future requirements. Both qualitative and quantitative information on the workforce structure is taken into account. Comparing the skills profile of the overall workforce created in this way with future requirements enables forward-looking workforce planning. Which skills are already available in the personnel structure, which employees can be further developed and in which areas does recruiting need to take action.
This example shows that HR analytics is particularly suitable for large companies. However, it should be noted that evaluations that affect employee data protection are subject to co-determination in Germany and must be coordinated with the works council.
Improving collaboration among individual employees, between teams and with partners is the goal of the numerous collaboration tools on the market. Modern social collaboration tools are geared to the usage habits of users in everyday life. Easy-to-use messengers and virtual project rooms replace e-mail distribution lists and nested forums.
Knowledge management is intended to make the technical and practical know-how in a company as widely accessible as possible internally. The creation of so-called knowledge silos to which only a few employees have access should be avoided, thus reducing dependency on individual employees. Social collaboration tools enable cross-location, networked collaboration among the workforce. This should facilitate the internal transfer of know-how and speed up decision-making.
Talent management has become an established term and one of the top trends in HR for about 10 years now, also in German-speaking countries. Numerous providers of talent management software from Germany and abroad are competing for the large and medium-sized companies in Germany, Austria and Switzerland.
Talent management consists of the triad of personnel recruitment, personnel development and personnel retention. To ensure that this is done as harmoniously as possible and from a single source, the individual talent management modules should be closely interlinked. The evaluated skills of an applicant, for example, should be transferred directly to skills and competency management after hiring. The information can be used to plan training and education in a more targeted manner and to systematize the entire personnel development process.
Succession management is a good example of this. Vacancies are filled with foresight through internal personnel development. Combined with individualized compensationand benefits models, this increases employee motivation many times over and helps to retain capable employees in the long term.
Some of the HR and talent management software providers are among the pioneers of cloud computing. In no other software segment is there a similarly large number of cloud solutions. Even the rather conservative German-speaking market is open to HR software from the cloud. According to providers, about half of the revenue is now generated with cloud solutions. It can be assumed that this trend will continue in 2023.
With the triumph of web-based technologies, mobile applications are also becoming more widespread in HR management. This can speed up recruitment processes, for example, by enabling HR decision-makers and company managers to issue approvals on the move via smartphone or tablet.
The continuing strong demand for HR software, and in particular for talent and applicant management software, will not diminish in 2023. Cloud applications are increasingly in demand and are also seen as an interesting alternative to the classic client-server infrastructure by German SMEs, which were once considered conservative.
Higher employee satisfaction and work productivity are the goal of all measures in human resources management. Systematic talent management is of paramount importance in this respect. This includes, in particular, close integration of the modules applicant management, skills and competence management, personnel development and compensation management, and succession planning.
There are already profitable applications for Big Data and HR Analytics, especially for large companies. In contrast to rather passive controlling, predictive analytics allows valid forecasts to be made about future developments and new challenges to be met proactively. The approaches of the predominantly still young HR analytics software providers are promising and will lead to many more application examples in the coming years.
Another trend is collaboration tools, which are increasingly being integrated into HR solutions. The networking of employees through easy-to-use tools is intended to increase work productivity and promote knowledge sharing.
Dominic Daubenberger is a Senior Consultant and Managing Director at Consult-HR. Thanks to his many years as an IT consultant specializing in human resources, he has a wealth of expertise in software selection projects. As the author of several specialist articles and studies on the subject of HR software, he is also a profound expert on the market.
