HR Service Delivery Why it’s time to accelerate the digital agenda – embracing the buyers’ market for HR technology by LACE Partners View Author's Exhibition Stand At LACE we pride ourselves on our knowledge and understanding of the HR tech landscape. Today’s blog is an overview of a roundtable discussion we ran in March 20201, discussing with some of our HR Tech Advisory Team why it is a buyers’ market for HR tech products right now, and how that is likely to change over the course of the next year. So why is it a buyers’ market for organisations considering HR technology? Refocused HR priorities The importance of HR – and particularly good HR data within organisations – has never been more prominent. Processes and HR activities moving online during the pandemic accelerated popularity in HR tech and underlined the need for HR teams to be digitally fluent. The need was obvious to all businesses, but even teams with a strong existing tech architecture have found the shift to digital and remote working a challenge, with change needed almost overnight in some instances for large organisations. For those who have underinvested in tech historically, the lack of ability to quickly shift was a significant barrier to progress. That even remains now for some organisations one year on. Weak points in businesses have been in the spotlight during the pandemic. Particularly the value of strong data, which has been felt by businesses who have had access to it but have not utilised their data effectively and efficiently. They now have a compelling case for change. As a result, building business cases for required technologies is likely to be easier than a year ago, especially if an organisation can tap into the data they have available in an efficient manner. Notably, technologies which will give organisations much needed visibility, that will enable remote productivity and promote engagement and wellbeing, will likely get the most attention as these have been common pain points for executive teams. The result? HR and payroll technology is enjoying a new status as an imperative rather than a ‘nice-to-have’. A volatile market for HR tech providers Demand, as mentioned above, has been present within organisations although appetite to buy during the Covid lockdowns had been limited. HR technology providers have had a difficult year with many projects on hold. This has left the market more competitive than ever. Sales teams are eager to catch up which makes for greater flexibility on pricing as well as wider commercials, such as payment terms and additional functionalities. This is true across the market with top quartile tech providers offering prices and commercials which make them attractive even in the SME market. There is now more than ever little difference between the top quartile providers (the likes of Workday, SAP SuccessFactors and Oracle) and those in the “rapidly emerging” categories, such as Ceridian and CoreHR in terms of functionality, so the choice is greater. With this comes greater competition too, therefore downward pressure on pricing is increasing, making it a great time to buy. There is also no doubt that Covid has driven a focus on engagement and experience. It is a critical requirement now for many businesses. We are seeing this appear in the market through acquisitions by mainstream providers; as evidenced by Workday’s recent purchase of Peakon. However, notably other players such as Applaud, ServiceNow and Salesforce and other vertical technologies are positioning themselves to create new and more consumer centric experiences and interfaces. HR Tech market evolution in the next 12 months Trends we are seeing now are likely to continue to accelerate, creating a perfect storm of refocused HR priorities, as well as and fierce competition from HR technologies. As differentiation narrows in functionality and price points, there is a strong chance that smaller players in the market will see opportunities for themselves in 2021/2022 and where success stories come from this, other buyers may follow. Competition between the biggest players in the market should spark creative plays for buyers’ attention, so watch this space for strategic acquisitions in topical areas such as wellbeing, collaboration and engagement. We are now entering a new era in the HR Tech market, one where we will see price competition, innovation and market consolidation. This is all good news if you are looking to buy a new system. If you would like to talk to us about the choices you are looking to make on a new HR tech platform, or you’d like to find out how to develop out your tech roadmap over the next 12 months and beyond, then reach out to us and we’d be happy to have an informal chat. This week we’ve also released a podcast which followed on from a blog we recently wrote about the questions you should be asking when considering whether to look at ‘best of breed’ HR tech systems, or look at the larger ‘enterprise’ solutions. You can listen to the podcast here. This post was written LACE Partners. They are an exhibitor on the HRTech247 Consulting & Advisory Partners floor in the Partners Hall here.