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Amid an increasingly crowded field in human capital management software this past year, vendors released cutting-edge software in learning, predictive analytics and recruiting. Workforce-scheduling software was also thrust into a national dispute over retailers' use of on-call shifts that often disrupted the lives of mostly low-paid employees.
Let's look in more detail at five top stories of 2015 in human capital management software.
1. Learning software rises in importance
Learning emerged as a hot area after Oracle unveiled its new Learning Cloud in March and two companies bought e-learning software in an otherwise lean year for acquisitions in human resources. Chris Leone, senior vice president of Oracle HCM development, dubbed the product the "YouTube of the enterprise," because it allows employees to create and share video tutorials. Another important aspect is a "recommendation engine," with an algorithm that makes personalized suggestions for learning content for employees.
Challenging Oracle, Workday unveiled its new learning software in September with a recommendation engine, and plans to make it available in the second half of 2016. Meanwhile, SAP SuccessFactors Learning next year will use algorithms to make recommendations, said David Ludlow, group vice president at SAP Labs. Learning is "hot, hot, hot," Ludlow said in an interview at the HR Technology Conference & Exposition, partly because it can produce tangible, measurable results and is important for compliance. Underscoring the significance of the space, LinkedIn paid $1.5 billion for lynda.com, an online learning company, and Skillsoft, a talent management company, bought Vodeclic for its cloud library of more than 25,000 how-to videos in six languages.
2. Predictive analytics track employee paths
Predictive analytics took some big leaps ahead, with several vendors announcing products. Workday, for example, released Talent Insights, which flags top performers at risk of quitting and also offers recommendations on how to keep them. Also, Cornerstone OnDemand released Cornerstone Insights, which includes dashboards for identifying employees who might fall out of compliance with organizational, state or federal regulations, and for identifying employees who might be good candidates for open positions.
ADP and Ultimate Software also announced new products for predictive analytics. ADP said that its ADP DataCloud will offer predictive analytics, including employee flight risk, in 2016. Ultimate Software enhanced its flight-risk and other predictive software by releasing UltiPro's Predictive Analytics Dashboard, which includes several new visual features, such as comparing termination rates of high performers to the same rates for the entire workforce. Industry analyst Josh Bersin said analytics for personnel decisions are used by only 5% to 7% of the companies surveyed by his company, Bersin by Deloitte. Judging by the new products introduced in 2015, HR's use of predictive analytics is poised to increase in the future.
3. Workforce-scheduling software in national controversy
Kronos and other vendors of shift-scheduling software became tangled in a high-profile, national debate over on-call shifts and inconsistent hours for mostly low-paid retail and restaurant workers. Critics, including members of the U.S. Congress, activists, and city and state officials, said the software enabled big chains to require employees to be available on short notice and to work erratic schedules based on factors such as the weather and store traffic. Critics also said the software helped employers avoid providing health insurance for workers by keeping employees below 30 hours a week, the federal minimum for companies to offer insurance or pay a penalty. New York Attorney General Eric T. Schneiderman wrote letters to 13 large retailers, asking if they used Kronos or Workplace for scheduling and warning the retailers that they may be using on-call shifts in violation of a state law, which requires them to pay employees a minimum four hours per shift if they report to work.
In response, some retailers who received the letters, including Abercrombie & Fitch, J. Crew Group, Victoria's Secret, Bath & Body Works, Urban Outfitters and Gap, said they would end on-call shifts at their stores and improve scheduling practices. Kronos reacted by offering a plug-in that includes analytics to track adequate hours for employees, how often schedules changed week to week, turnover and if unpredictable schedules affected absenteeism. In July, new ordinances in San Francisco took effect to regulate the scheduling and treatment of part-time workers at some retail companies.
4. Recruiting software expands
Expanding their search for talent, employers increasingly used advanced cloud recruiting software, both to find and assess job candidates and employees. Small software vendors, such as Pymetrics, Knack, RoundPegg and Seedlink Technology, offered innovative brain games for employers to gauge character traits, talents or culture fit of people. Several giant companies also gave stamps of approval. For example, the Chinese operation of L'Oreal, the world's leading cosmetics and beauty-care product company, tapped Seedlink's leading-edge software to narrow applicant fields. The software's algorithms analyze patterns and content in candidates' answers to certain questions, and predict applicants' future behavior. Also, Herbalife used Chequed to automate reference checking for U.S. hires, while Red Hat used Gild Source to rank programmers based on the quality of their open source code and gain insights on possible hires.
In August, Workday announced that 300 organizations selected Workday Recruiting, one of its newer products that is partly aimed at providing greater collaboration among hiring teams. CareerBuilder in June officially unveiled CareerBuilder1, its "pre-hire platform" that brings all of its enhanced cloud products together in one place. The products include analytics, applicant tracking, recruiting, reporting and a tool to allow users to simultaneously post openings on major job sites. The platform was an example of job boards offering HR software as a service to raise new and recurring revenues, drive long-term growth and provide more services to users.
5. Competition intensifies
Competition intensified in the packed field of human capital management software. Salesforce entered the fray by releasing Salesforce for HR, which the vendor said could integrate with an organization's existing HCM software and provide functions, such as a help desk, analytics, engagement applications and collaboration tools. Works Applications, which is based in Tokyo, announced that it would sell human capital management software, called AI Works, in the U.S. early in 2016. Works Applications aims at top rivals, such as ADP, Workday and SAP, partly with a pricing model that includes only a subscription -- not any implementation, configuration or other fees. The product also uses machine learning to speed up and streamline data input, reporting, analytics, travel and expenses, and communications among employees.
But perhaps no one underscored the importance of human capital management software more than Oracle CEO Mark Hurd in 2015. In a roundtable with reporters and analysts at Oracle HCM World, Hurd said that HCM software is "extremely strategic" to the massive company's success over the next decade, and said it is vital for Oracle to focus on it and get it right. Taking aim at the competition, Hurd criticized competitors, including SAP for its $8.3 billion purchase of Concur, which offers cloud travel-and-expense software. Hurd said it didn't seem strategic to spend that much money for what he called "expense statements in midmarket."
But SAP's Ludlow said Concur, due to wrap up its first full year as an SAP subsidiary in 2015, is part of a strategy to offer best-in-class human capital management software, along with applications -- such as SuccessFactors -- for cloud talent management, and Ariba for cloud B2B sourcing and procurement. "The world, going forward, is a best-of-breed world," Ludlow said during an interview at the HR Technology Conference & Exposition, which punctuated the growing competition in the market by attracting about 8,500 people, and featuring more than 300 exhibiting companies and about 75 new product announcements. Further emphasizing the importance of cloud human capital management, IBM in late September said it would acquire Meteorix, a top Workday services partner with more than 200 certified Workday consultants.
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Dan Ring asks:
What do you consider big news for 2015 in human capital management software?
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