Ventana Research recently announced its 2021 research agenda for Human Capital Management, continuing the guidance we’ve offered for two decades to help organizations derive maximum value from workforce-related technology investments and initiatives. In crafting this research agenda, we focused on three critical themes top-of-mind for both HCM vendors and buyers: Organizational agility and resilience, worker productivity, and leveraging artificial intelligence and machine learning as broadly as practical.
We craft our research priorities through a combination of deep expertise, intimate knowledge of business trends, and advances in technology, systems requirements and vendor products that intersect with and amplify them. Through our systematic and continuous market research, we offer insights and best practices for both the lines of business and IT across industry verticals, helping organizations realize maximum potential.
HCM focuses on engaging workers and managers with applications, processes and programs that elevate each worker’s contribution and engagement level, creating and sustaining sources of value and competitive advantage. Sharpening organizational agility - or the ability to be out-in-front of both business risks and opportunities with the best workforce actions and decisions - is more important than ever, given what we’ve learned about the unpredictability of operating environments and business conditions. We assert that during 2021, three-quarters of organizations will identify organizational agility as an HR-led business imperative, with one-half adopting an examination of worker types (e.g., gig workers) as an integral priority.
HCM technology platforms, historically designed to automate and connect HR processes and enable HR leaders to effectively support business strategy with appropriate data, are increasingly designed to address the needs, interests and goals of both the organization and its workforce. Key to this balancing act is increased emphasis on insights, guidance and experiences. These are the hallmarks of modern HCM platforms.
Our Human Capital Management research agenda includes six focus areas that address those business results: Talent Management, Employee Experience, Learning Management, Total Compensation Management, Continuous Payroll and Workforce Management.
Ventana Research’s Talent Management focus area encompasses multiple pillars of strategic HCM that are largely defined, architected and governed by the organization as opposed to each employee. The pillars include Talent Acquisition or Recruiting, On-Boarding, Performance Management and Coaching, and Succession Planning. While Learning Management must be integrated with all TM pillars from a process, technology and analytics perspective, modern Learning Management generally involves learners – rather than the enterprise – architecting their own actions and activities. Learning Management receives dedicated focus in our HCM research structure because we strive to be responsive to market demands for HCM area-specific research, although we always link Learning Management to the other focus areas within our HCM research, as well as perspectives and insights offered. We assert that by 2024, one-half of all people analytics initiatives deployed in organizations will provide insights into the quantifiable impact of workforce policies to further improve talent management.
Without question, conversational computing using intelligent digital assistants has become pervasive across Talent Management, particularly the talent acquisition and on-boarding segments. This shift is attributable to the frequency of interactions and extensive collaboration among stakeholders, a dynamic that also relates to Performance Management and Coaching. Succession Planning activities should be linked to the front-end of Talent Management - or Talent Acquisition and Workforce Planning processes - to ensure coverage in all critical roles.
This year we will continue to research how organizations are using technology to effectively engage top talent, including passive talent not on the market, in our ongoing Dynamic Insights for Candidate Engagement. New for 2021, we will launch our first HCM Suites Value Index that will focus on the various segments of Talent Management, in addition to evaluating solutions and vendors across our remaining focus areas.
Continuous Payroll refers to the new era of on-demand payroll, made possible by the replacement or elimination of many labor-intensive, error-prone payroll tasks found with legacy technologies. This frees up time that payroll teams can use to enhance the employee experience and provide better decision support, given the extreme reliability and timeliness of payroll data. We will publish another Value Index report on Payroll vendors in 2021, as well as continue with our ongoing Benchmark Research data collection effort on the buyer/practitioner side of the equation.
Delivering a superior employee experience has taken its place among the highest-priority business goals for enterprises of all sizes. A high-quality EX results in better engagement, which in-turn drives employee retention, resulting in higher levels of productivity, collaboration, organizational agility/resilience and even innovation. This year our ongoing Dynamic Insights Employee Experience research will continue to investigate how organizations are taking advantage of technology to not just know what’s in the hearts and minds of workers, but also what motivates, influences or conversely impedes their engagement and commitment.
Learning Management is the process of ensuring the workforce develops the skills and competencies needed to maximize productivity and effectiveness, both short and longer term. Organizations are embracing technology platforms that do the best job of enhancing the learning experience to improve business results. This usually involves a combination of personalization (content, medium, pace) and various forms of adaptive learning (a system intelligence-driven learning plan) often delivered in shorter, in-the-flow-of-work experiences called micro or nano learning. We will continue our Benchmark Research on the extent to which organizations are including these elements in business cases and achieving better ROI by maximizing them. We will also publish another Value Index in 2021 evaluating Learning Management market offerings.
Total Compensation Management
Total Compensation Management is the practice of focusing processes, relevant data and modern technologies on an integrated and more comprehensive approach to incentivizing, rewarding and recognizing workers. We’re seeing an increasing emphasis on rewards that maximize cost and outcome ratios (for both workers and the employer), including nonmonetary rewards. Organizations have more tools than ever with which to plan, model, allocate and personalize rewards, and we will continue investigating the impact these tools have on business outcomes such as productivity, retention and ROI on compensation spend. In 2021, we will publish both Benchmark Research and Value Index reports to meet ever-increasing demands for this guidance. We assert that by 2024, two-thirds of organizations using compensation software can incentivize employees to take more of their compensation in variable pay through the platform’s compensation equivalencies.
Workforce Management is the broad range of activities used to oversee time and attendance, forecasting and scheduling, absence management and integration with the payroll process for non-exempt or hourly workers. Workforce forecasting has become much more dynamic and accurate with AI-infused systems, and scheduling optimization capabilities now enable organizations to factor in employee preferences to mitigate the typically high turnover in hourly jobs. Leading WFM systems also now consider factors such as burnout, accidents and team composition and synergies. We have continuous Benchmark Research on this topic scheduled for 2021, and we will launch another Value Index research effort on how WFM technology advances are paying off for customers.
This is a time when, more than ever, advocates and stakeholders involved in HCM - including the human resources department, employees and line managers - are taking stock of what’s needed to thrive as an organization. Every organization, regardless of size or revenue, should be focused on enriching the employee experience and mining value and insights from a treasure-trove of people data. Our 2021 HCM research will explore these and other critical themes in depth, and we will deliver targeted guidance on how software is supporting these activities. I expect we’ll continue to see the deployment of AI-infused tools deliver a wide range of HCM benefits related to the three P’s: personalize, predict and prescribe.
Subscribe to our Ventana Research community to stay up-to-date on our 2021 research efforts. Check out the human capital management topic and focus pages for our detailed research agenda and continuously updated 90-day calendar as well as more research facts and best practices.