HRTechTank NYC. The begin of the middle
This is the first post I will be writing in advance of the NYC HRTechTank on February 5th.
I think it may be helpful to give my first draft of the market, HRTech and what it is and what it isn’t.
I did not go to the HRTech conference, it has always been large and this year it was larger. It has always been glitzy, this year it was glitzier. There were many new and innovative companies and remarkable people in attendance, there was also a bit too much bright lights for my taste and those same people are available sans neon.
And that is HRTechTank. It is the people I am eager to listen to and chat with. Consumerizing HR is new and the leaders are building the products that they and their millennial (and older) workforce want to use.
HRTechTank and the beginning of the middle
HRTech as a term might be archaic, a relic of the fast history of technology. In Old English it might have been that category of companies that were using the internet and on/off premises innovation to improve efficiencies in those Human Resource fiefdoms of yore.
But today, a worker generation later, HRTech has lost its potency as a descriptive adjective. All industries are now (fill in the blank) ____Tech.
Does HRTech infer a business solution in search of a mechanism to create value. Is it the unprofitable (bio)Tech or the profitable pharmaceutical? Does HRTech blossom into Enterprise SaaS if it becomes profitable?
Perhaps we can define HRTech from a birds view:
Profitability: Light switch is either on/off.
Top line or bottom line growth is situational and occasionally stylistic.
Operational Maturity: Companies cycle seasonally through phases of Development, Sales, Operational excellence/leverage.
If a company is in the earliest ‘pre-product’ development phase, it’s building and testing (hopefully in the market) there is no opportunity for profit, need for levers or operations excellence, no sales: HRTech?
If it’s built ‘enough’ of the product, staffing ratios shift to favor sales and service team but product is still fighting its initial path in the market and not yet rigid on pricing: HRTech?
If it has built it, refined it, sold and serviced it, then the company must turn inward to improve its leverage and operational excellence: Should not be wrapped in HRTech paper, Likely selectively acquiring expiring HRTech and mature services companies to gain size and competency: Enterprise SaaS?
Software and channel distribution:. Product cycle times have become so compressed it is difficult to keep the mercenary partners sales and service personal educated and maintain visibility. HRTech is building the platform first and the client facing pieces secondary.
Service companies that have built the client facing pieces will capture most of the revenue and re-allocate to staffing ratios in non development. They are HRTech service companies that use technology to gain advantage in the market, differentiate themselves from their competitors and a lever advantage: high tech, high touch.
HRTech could include many niche components in an HR system. A few of my ‘wish list registry’ highlights:
Messaging and notifications:
Most of the workforce isn’t tethered to their desktop. Employees are working in the field, or in retail, or in a hospital, casino, hotel, an oil field, etc.,
One element I am excited about is the significant process improvement messaging and notifications can bring. If I am a mature company, I have several factories (ancillary products that stand on their own) that are complimentary to a ‘whole product’ offering. The theory is great but in the real world, off the whiteboard, the problem has been that it is manpower intensive to cross sell clients. Messaging and notifications reduces the human intervention needed in an up-sell.
Side note: Nir Eyal wrote an excellent piece on Slack and I suggest a read thru, here:
HRIS systems: Applicant tracking, Learning Management, etc.,
Legacy HRIS systems were built as compliance utility. It’s not friendly to use and it was designed to be transactional. The newest entrants are keeping people on the site with a wealth of features, benefits and high frequency touches.
The most exciting companies are perfecting an action but also going deep into an entire process. The legacy systems have huge gaps and the top new (and some older that are gaining enormous traction) are defining the space as friendlier, improved workflows, doesn’t need much upkeep or dedicated personnel to support.
If HRTech infers a new entrant in a market then it may also suggest the different types of management styles:
Empire builder: Alexander the Great had the lumber of Macedon as currency, fellow students of Aristotle and the social capital to synthesize conquests and make them allies. It’s a viable strategy for a younger company with the available resources but they must accelerate to profitability. This CEO must build a team of experienced managers who can plot the system of conquest and assimilation while still operating the core business successfully. The best CEO’s of the type are extremely charismatic and use charm to disarm and align their Survivor ‘alliance’.
Administrator: Has patience. They go deep into a system. Less interested in building a substitute product and instead wants to build the one that works the best and captures the most value. Disciplined and stays ahead of the demand curve.
This is my first attempt at giving precision to a ‘non index’, it’s an inaugural expedition. I’ll be giving it a lot more thought….
HRTechTank NYC. The begin of the middle