I believe that down the line, historians will look at the last five years as a time when we collectively and irrevocably stepped into a new era. Over these years, dramatic events have tested our ability to adapt and maintain our resilience.

Whether it be through the onset of the COVID-19 pandemic, the devastating consequences of extreme weather events, threats to global political, social, and economic stability, or the proliferation of algorithms often smarter than we are, we as individuals, societies, and organizations have faced an unprecedented amount of change.

These events have shaken the world around us, and the workplace is no exception. As the world of work undergoes a major transformation, those organizations that invest in digital ways of doing business across people, processes, technology, and data will be in the best position to succeed.

HR technology will play a key role in 2021 and beyond in helping organizations thrive in this new era. In this article, I will outline the top trends in HR technology and how you can get the most from your investment.

#1: A reinvention of core HR

Traditional core HR systems built around unwieldy employee data structures are too rigid for today’s world of work. They do not effectively manage skills, which are the currency of the labor market. Key questions include:

  • What are the skills the company has access to?
  • Which of these skills are mission-critical (e.g., to maintain business continuity during an emergency)?
  • How can you identify skills gaps and fill them?

To answer these questions, reinvented core HR systems must go beyond the concept of jobs to unearth the underlying skills required to do those jobs.

A skills-based core HR system should offer several benefits:

  • First, it should provide a holistic view of skills across internal sources (full-time and part-time employees) and those available externally (contingent workers, partners, etc.), or through technology (robotic process automation or artificial intelligence). It should maintain a comprehensive ontology of curated and dynamic skills, a task that will likely require artificial intelligence.
  • Second, the system should match skill supply with demand, showing skills requirements for gigs or projects transcending traditional job/geography/department silos. It should enable agile teams comprising people and robots with the right skills to deliver the project effectively while capturing valuable information on organizational networks.
  • Third, the system should power a transformation of talent management to comprehensive skills management. For instance: it should identify current and future skills gaps and ways to fill them (workforce planning); tap into a continuously maintained pool of internal, external, and robotic skills (recruiting); smoothly pull people/robots with the requisite skills into a team (onboarding), and provide opportunities for skill development per project and career requirements (learning).
  • Fourth, the system should allow organizations to quickly reconfigure their workforce and robustly respond to crises like COVID-19 by enabling visibility and mobility of skills across internal, external, and robotic sources.

We can already see glimpses of such core HR systems being released by major players in the space and expect to see more as their value becomes evident.

#2: Open human capital management (OHCM)

I use the term OHCM to capture the essence of a couple of trends towards loosening constraints on technology access, experience, and control.

Realizing that no single end-to-end system can meet their need for innovation in all human capital management (HCM) areas, companies are rewarding vendors who can consolidate HCM data in a single system of record while allowing the system to extend to meet the companies’ specific needs, especially in areas such as crisis response, health and safety, team management and collaboration, rewards and recognition and global payroll.

Some vendors are responding by creating ecosystems/marketplaces/app stores of partners that come with pre-built connectors, single sign-on capabilities, security assurance, etc. Others have opened up their technology in a Platform-as-a-Service (PaaS) offering enabling customers and third-party developers to build their own applications on the platform. Some vendors are also allowing users with minimal coding skills to create unique experiences based on their role, business unit, geographic location, etc.

To shield employees from the complexity of using such multi-system environments, companies are also looking for a user experience layer that can provide a simplified, personalized, one-stop portal for employees. HR Service Delivery (HRSD) solutions are stepping in to provide this experience, with integrated helpdesk, case management, and knowledge management capabilities. Some HCM vendors are also building HRSD capabilities to provide a consolidated experience.

Another trend within OHCM aligns with the World Economic Forum’s Presidio Principles and focuses on empowering employees to own their own data, port it as they prefer, and provide consent for processing it. Enabled by blockchain, this trend is weakening the business models of some employers and vendors that currently own and even monetize employee data. Efforts are underway to build consortiums of key players focused on developing secure and regulated workforce databases using blockchains and, ultimately, transfer control to employees.

#3: Pervasive analytics and artificial intelligence (AI)

People analytics has been steadily gaining mainstream adoption, and the recent pandemic and social justice movements have only emphasized its importance. Employee engagement, retention, and diversity and inclusion will continue to be popular drivers of adoption.

The power of analytics grows as more people use it. The movement towards “democratization of analytics” will continue to gain steam as people managers and HR and business leaders use analytics besides specialized practitioners. Augmented analytics that makes it easier for those with no data science background to consume analytics is also gaining popularity.

The boundaries between analytics and AI (based on machine learning, deep learning, computer vision, and other techniques) start to blur with predictive and prescriptive analytics. The frontier in this area is: can analytics solutions not only predict events but also recommend suitable actions through nudges in the flow of work? We see examples in the growing number of companies using Learning Experience Platforms (LPs) that make it easier for people to find, share and consume learning content and provide just-in-time nudges to help employees bridge skills gaps exactly when they need to. Tools that nudge employees to keep action items top of mind are also gaining adoption.

AI now has a broad range of applications, although most are in the early stages of development. Among the more mature examples are applications within HRSD and recruiting. While there are many text-based conversational digital assistants that can help users with their HR concerns, we’re moving towards the next stage: reliable voice interfaces. Complex interview scheduling and resume matching and ranking tools are becoming more mature. Anomaly detection (e.g., to reduce payroll leakage) is another key use case for AI. There are also more invasive techniques, such as personality profiling and facial recognition, that are raising concerns around accuracy and discrimination. As part of the broader awakening among the general public and regulatory authorities around the immense power of algorithms in today’s world, companies will continue to be extremely cautious with such solutions.

Augmented reality (AR) and virtual reality (VR) could be the defining technologies of the next couple of years. These technologies have several interesting applications, including immersive training experiences for employees, virtual gamified candidate selection, and candidate experience enhancement through virtual tours.

As companies and vendors pursue tools like AI and analytics in the workplace, they should consider the change management implications seriously. There will be people for whom the pace of change is too much. Fear, uncertainty and justifiable concerns around privacy and discrimination can and likely will provoke negative reactions. Building trust is now the most important success factor when implementing these technologies in the workplace.

What are you planning around HR tech in 2021, and how are you approaching the many questions it raises? Feel free to leave a comment below or contact me to discuss your needs or any questions you may have about these tools and technologies. Stay tuned for my next article on two other key trends in HR tech.

For more information on how you can build your workforce of the future visit PwC — Workforce of the Future.

Originally published at https://www.linkedin.com.

About the author

Harsh Kundulli is a storyteller. At work, he tells stories to clients who want to transform their enterprise technology landscape. At home, he tells them to family and friends. His full profile is on LinkedIn.