HR Technology 2019: A Wild New World

1. WWW.JOSHBERSIN.COM JOSH BERSIN Global Industry Analyst October, 2018 A Wild New World of HR Technology HR In The Flow of Work

3. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 3 Tremendous War for Skills, both Technical and Soft-skills Groundbreaking Changes in Demographics Radical Changes in Expectations for Work and Employers Challenges with Engagement, Productivity, and Employee Experience Forces Disrupting Organizations Today

4. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 4 *Source: Robots: The new low-cost worker, Dhara Ranasinghe, CNBC, April 10, 2015. https://www.cnbc.com/2015/04/10/robots-the-new-low-cost-worker.html ** Source: China Can’t Buy Enough Industrial Robots, Jethro Mullen, CNNTech, June 23, 2016 http://money.cnn.com/2016/06/23/technology/china-industrial-robots/index.html The Future of Work Robotics, AI, Sensors Are Here Now 42% of companies believe AI and automation will be widely deployed in their companies within 3-5 years. Yet today only 15% have plans to develop the skills to meet this change.

5. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 5 1 billion smartphones i-Phone launched 100 million Twitter users Source: U.S. Bureau of Labor Statistics Productivity Continues To Lag

6. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 6 Sources: Deloitte Human Capital Trends 2014 and 2015 The “average” US worker now spends 25% of their day reading or answering emails Fewer than 16% of companies have a program to “simplify work” or help employees deal with stress. More than 80% of all companies rate their business “highly complex” or “complex” for employees. The average mobile phone user checks their device 150 times a day. The “average” US worker works 47 hours and 49% work 50 hours or more per week, with 20% at 60+ hours per week 40% of the US population believes it is impossible to succeed at work and have a balanced family life. Employees Are Overwhelmed

7. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 7 We Are Working More Hours: A Vacation Crisis • Since 2000, US workers lost an entire week of vacation, dropping average vacation days from 20.3 to 16.8 • Americans left 662 million unused vacation days forfeiting $66 billion in benefits • 39% “want to be seen as a work martyr” to their boss, yet these over-workers are less likely to receive a promotion or raise than their peers. • Employees who forfeit time are less likely than non-forfeiters to be promoted or receive a raise or bonus Source: The State of American Vacation 2017, Project: Time Off https://www.projecttimeoff.com/state-american-vacation-2017 35% of Millennial women feel guilty about taking time off (25% of men)

8. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 8 Average 3.2 What are these companies doing? Graph source: Summer 2016 Glassdoor and Bersin Research Stat Source: 2017 Trends in Global Employee Engagement, Aon Hewitt http://www.aon.com/chile/attachments/2017-Trends-in-Global-Employee-Engagement.pdf Employee Engagement Only Slightly Improving

9. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 9 Growing Lack Of Trust Majority believe the system is failing: https://www.edelman.com/research/2017-trust-barometer-global-results Trust CEOsBelieve the system is failing 53% Only 37% Edelman Trust Data Only 29% Trust government

10. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 10 60% of Californians believe tech benefits the state, yet only 38% believe tech benefits me Over 3/5 of Californians believe tech firms over- focus on profits and are draining local resources for their own benefit 58% believe tech has failed to protect them from data security threats Only 29% believe tech is being transparent and open and 67% believe the industry is “secretive.” Distrust & Backlash Against Technology Edelman trust index, California edition, https://www.edelman.com/2018-california-trust-barometer

11. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 11 Automate Integrate Engage Perform 1990s-2000s 2004-2012 2012-2017 2019+ Automated Talent Management Integrated Talent Management Engagement, Fit, Culture, Analytics Productivity, Performance, Teams Talent Management: Integrated processes and systems, Talent as core to HR and business agenda Systems of Automation Practice-driven solutions People Management: Focus on culture, engagement, environment, leadership, and fit Systems of Engagement, Empowerment solutions From HCM to Talent Management to HR In The Flow of Work Engage Team & Work Management: Optimizing productivity, alignment, and teams to make work better. Systems of Productivity In the Flow of Work

13. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 13 $16.0 Billion in Investment in HR Tech Since 2009 (2,918 companies) Source: CB Insights Lots of Investment in HR Tech More than half are brand new: 25% seed 31% series A $6.5B last two years https://www.cbinsights.com/search/deals/?comLists=252745&limit=25&offset=50&displayType=table

15. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 15 Acquires Glint LinkedIn ATS Talent Hub Big Data Talent Insights LinkedIn Learning Pro, SkillsDiversity Insights Real-Time AI in Recruiter

16. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 16 Benefits & Compensation Hiring Recruiting E-Learning Integrated Talent Platforms Cloud-Based HCM New Systems of Engagement Core HR Platforms Shifting Focus… But… MARKETGROWTH-ADOPTION 2 0 0 0 2 0 1 9P R O G R E S S I O N O V E R T I M E Compensation HRIS Benefits Administration Applicant Tracking Performance Mgt Learning Management Recruitng ATS Learning Management Performance Management Integrated Talent Management Compensation Analytics Reporting Cloud-Based HCM or ERP Payroll HRMS Employee Profile Recruiting Learning Workforce Management Wellbeing Social Recognition Employee Experience Career and Gig Work Learning Experience Real Time Engagement Next Gen Performance Cognitive, AI, Conversational HR Process Automation Integrated Talent Applications Cloud “Systems of Engagement” Meaningful Systems to “Make Work Better”

17. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 17 …Becoming Spread Thin  Payroll in new geographies  GDPR compliance  Reinventing performance management  New learning platforms  Feedback and pulse surveys  AI-based recruitment platforms  Wellness, fitness apps  Diversity and inclusion products  Team management tools  Employee onboarding  Employee experience  Integration with Slack, Workplace, and G-Suite ERP Vendors Stressed To Keep Up

18. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 18 Core HR: Many Disruptions Coming Core HR Vendors Internal gig projects Gig and alternative work Continuous reskilling, career mobility Organization as network not hierarchy Performance management of teams and projects Wellbeing and agile rewards systems Real-time and digital pay AI-based employee experience services Graph database architectures Engagement 3.0 and nudge engines Augmented analytics and unbiased AI

20. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 20 Unemployment Rate At Near Record Low End of Korean War Vietnam War https://www.thebalance.com/unemployment-rate-by-year-3305506 Black Monday Dot Com Dot Bomb Financial Crisis 1970 – 1976 6.2% jumping to 12.3% Inflation 2007 4.1% Inflation http://dhihiringindicators.com/wp-content/uploads/2018/01/2018-01-DHI-Hiring-Indicators-Report-FINAL-2.pdf Expected to drop to 3.8% There are now .87 US workers for each open position, lowest since in last 50 years.

21. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 21 The Industrial Corporation Hierarchical Leadership Collaborative Management Networks of Teams <1950s 1960s-80s Today1990s Andrew Carnegie Henry Ford Netflix, Google, Facebook, Amazon, etc. Jack Welch Peter Drucker Howard Schulz Steve Jobs Profit, Growth, Financial Engineering Customer Service, Employees as Leaders Mission, Purpose, Sustainability Operational Efficiency 2020 Industrial Age People as Workers Management by Objective Servant Leadership Work Together Empower the Team The Corporation is King The Executives are King The Teams and Team Leaders are Kings The People are King(s) Citizenship, Growth and Learning Productivity, Wellness, Networked Business Unilever, Patagonia, Airbnb, Whole Foods, etc. People, Communities, Global Networks Purpose, Citizenship, Productivity New Models of Management Thinking

22. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 22 Workers Living Longer, Stretching the Talent Cycle “Since 1840 there has been an increase in life expectancy of three months for every year.” Source: Gratton, Lynda; Scott, Andrew. The 100-Year Life Today’s Millennials have a 50% chance of living to 100+ Increase in Life Expectancy Over Time Source: http://www.mortality.org/ Will generational bias be the hot button of 2018?

23. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 23 Feedback and Engagement Reinventing Performance 21st Century Learning & Career Next Gen Rewards Well-Being Productivity Work – Team Management 2019 and Beyond: A New Set of Talent Applications MARKETGROWTH-ADOPTION 2 0 1 6 Pulse Survey Text Analytics Mobile Feedback 2 0 2 0 Culture Assessment Coaching Tools Check-ins with Feedback Agile, open goal management Org Network Analysis P R O G R E S S I O N O V E R T I M E Micro-Learning Content Curation Learning Experience Career Planning Gamification Accreditation Slack, Office, Google Integration Document Management Goal Sharing Goal Tracking Conversational InterfacesRecognition Everywhere Custom Rewards Programs Customer Recognition Conjoint Analysis Holistic Rewards Real-Time Pay and Rewards Financial Well-Being Well Being Fitness Tracking Competitions Social Sharing Fitness Merges w/Engagement Emotional, Psychological Facebook, Google, Microsoft, IBM, Atlassian Engagement 3.0 Nudge Engines Team Based HRMS Systems Gig work management

24. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 24 Market Evolution becoming Disruptive Again Rewards Recognition Well Being Learning Payroll - Talent Engagement Performance Management Mid-Market SMB Recruitment

25. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 25 Massive Investment in Talent Acquisition Tools 2000s Candidate Marketing Assessment 2010s Onboarding Workflow Integrated Sourcing Examples of Firms 1990s Applicant Tracking Future AI-Based Intelligent Recruitment Automation Today Intelligent Assessment, Diversity Career

31. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 31 Workplace Culture is Hot: Well-being Google Trends Search for Wellbeing since 2004 https://trends.google.com/trends/explore?date=2004-01-01%202018-07-30&q=Wellbeing

32. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 32 EmployeeVitality Business Performance Cost Reduction Labor Productivity Retention Productivity Collaboration Team Performance Leadership Health Monitoring Employee Assistance Medical Benefits Fitness Challenges Nutrition Exercise Sleep Stress Sustainable Performance Recognition Skills and Training Work Environment Rewards Leadership Management Clear Goals Growth Opportunities Drive Wellbeing Self Discovery Career Purpose Mindfulness Abundance Mentality Positive Thinking Culture Fit Family From Wellness to Well-being to Performance $1.7 Billion Venture Invested in 12 months VC Data: CB Insights

33. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 33 Wellness Apps Now Used More Than Twitter 290% reduction in workers compensation claims 65% more engaged than non-users 9% greater work productivity Source: VirginPulse Client Research, 2017

34. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 34 Demand for Financial Wellbeing Solutions Epidemic In Financial Illiteracy • 40% of adults rated a C, D or F on personal finance literacy • 1/3 of Americans only pay minimum credit card balance and average credit card debt is $15,000 • Median retirement balance is only $3,000 • 50% of American households have no savings This Has Huge Impact on Work • Financial stress lowers productivity by $250 billion per year • 15% of college graduate salaries goes to student loan debt • 64% of millennials feel financially stressed, 32% say it impacts their daily work • 33 peer reviewed studies correlate financial stress to health and heart attacks https://www.huffingtonpost.com/douglas-p-mccormick/financial-literacythe-big_b_10264622.html 2018 TIAA Institute – GFLEC Personal Finance Index

36. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 36 Convergence of Talent Applications Ahead Diet Wellness Fitness Challenges Goal Management Feedback Pulse Survey Surveys Engagement Tools Mobile Feedback Customer Feedback Check Ins Personality Assessment Performance Review Physical Fitness Health Behavior Change Social Recognition Customer based Recognition Perks Awards Affinity Groups Anniversaries Work Events Engagement Analytics Travel Time Management Video Learning Self-Assessment Gamified Onboarding Career Planning Training and Certification Engagement Feedback Performance Pay, Recognition Rewards Learning & Coaching Well Being & Work Management Coaching Mentoring Financial Fitness

38. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 38 Employee Engagement Market Evolves Once per year. Focus on management. Benchmarked annually. Rigid questions asked year after year. Focus on benchmarking. Agile surveys as needed. Pulse on regular basis. Feedback on mobile or apps. AI-based action plans. Immediate feedback. Focus on feedback. Many sources of data. Recommendations driven by nudge and suggestion. Open to HRMS, ONA, and other behavioral data. Focus on behavior change. Engagement 1.0 Engagement 2.0 Engagement 3.0 Survey technology. Web, mobile, analytics. AI, nudges, real-time sensing. The top-down annual engagement survey Pulse surveys with intelligent sensing Intelligent nudges, Focus on everyone

40. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 40 Building an Enterprise Feedback Architecture Integrated Reporting & Analytics Sentiment Analysis Network Analysis Social Media Monitoring Job Boards & Ads Employment Brand Customer Satisfaction Anonymous Feedback Tools Pulse Surveys Annual Survey Performance Check-ins Exit Interviews Performance Appraisals Email Sensing Location Travel, Badges

41. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 41 2019: People Analytics Is Shifting Interesting Experiments, Models, and Studies Practical, Useful Dashboards and Tools Projects Based on Problems and Strategies AI-Based Augmented Analytics

42. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 42 Relationship (ONA) and Augmented Analytics Teams Organizations The Enterprise If You Don’t Have A People Analytics Team You Should

44. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 44 2.8 2.9 3 3.1 3.4 3.6 4.4 4.5 5.5 5.5 5.6 5.7 6.5 9.8 0 1 2 3 4 5 6 7 8 9 10 Head of Customer Experience Reliability Engineer Marketing Content Manager Guest Experience Manager Licensed Realtor Head of Partnerships Peronsal Loan Consultant Brand Partner Big Data Developer Full Stack Engineer Customer Success Manager Sales Representative Data Scientist Machine Learning Engineer Most In-Demand Jobs 2018 Soft Skills Tech https://economicgraph.linkedin.com/research/LinkedIns-2017-US-Emerging-Jobs-Report Most In-Demand Skills 1. Management 2. Sales 3. Communication 4. Marketing 5. Start-ups 6. Python 7. Software development 8. Analytics 9. Cloud computing 10. Retail Most In-Demand Capabilities 1. Adaptability 2. Culture fit 3. Collaboration 4. Leadership 5. Growth potential 6. Prioritization All Skills Are In Epic Demand – Not Just Tech

45. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 45 And Every Company Is Reskilling … All The Time Our software engineers need to shift to agile development methodologies. Our sales teams need to learn to use Salesforce for account development. Our marketing teams need to learn digital marketing and analytics tools like Marketo Upskilling Productivity Our software engineers need to shift from client/server to mobile or cloud development. Our sales teams need to understand integrated vertical solutions Our marketing teams need to learn SEO and digital advertising tools. Reskilling Innovation and Growth Our software engineers need to learn AI, nudges, and gamification models. Our sales teams need to become consultants and advisors. Our marketing teams need to shift to product management and design thinking. Reinvention Survival

46. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 46 58% of companies are redesigning or planning to redesign their career model Deloitte HC Trends 2017 83% of companies expect to have an “open” or “highly flexible” career model within the next 3-5 years Deloitte HC Trends 2017 While 33% of companies promote vertical career moves, 67% now promote horizontal or project based career progression Deloitte HC Trends 2017 31% of companies expect careers to be 3-5 years long; 60% expect them to be 10 years or less Deloitte HC Trends 2017 Learning and career management software is the #1 fastest growing segment in HR technology (Sierra-Cedar 2016– 2017 Survey HR White Paper) Career Models in Massive Disruption

47. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 47 Explosive Growth In MicroLearning Micro-Learning Macro-Learning I need help now. I want to learn something new. • 2 minutes or less • Topic or problem based • Search by asking a question • Video or text • Indexed and searchable • Content rated for quality and utility • Several hours or days • Definitions, concepts, principles, and practice • Exercises graded by others • People to talk with, learn from • Coaching and support needed Is the content useful and accurate? Is the author authoritative and educational? Videos, articles, code samples, tools Courses, classes, MOOCs, programs

48. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 48 Learning Experience Platforms Degreed, EdCast, PathGather Jam, Fuse, Percipio, Cornerstone, Valamis, Tribridge, … Program Delivery Platforms CrossKnowledge, NovoEd EdX, Everwise, OpenEdX, Blackboard, Instructure, ... Micro-Learning Platforms (adaptive) Axonify, Area9, Grovo, Qstream, Practice, Rehearsal, Jubi, Wisetail, Mindtickle, Trivie, Echo, EduMe, etc. LMS and Content Platforms Cornerstone, Saba, SuccessFactors, SumTotal Workday, Oracle, SAP, Bridge, D2L, Litmos, Intellum, Docebo, others Assessment, VR, Development Tools Video Authoring, Intelligent assessment, spaced learning, gaming, virtual reality, collaboration, simulations, … Content Libraries LinkedIn, Udacity, Coursera, EdX, Udemy, Pluralsight, SkillSoft, CrossKnowledge, hundreds of others Learning Record Store GrassBlade, Learning Locker, Saltbox, Yet, Watershed 1 2 3 4 5 7 8 Digital Adoption and Workflow Learning Tools WalkMe, EnableNow, Microsoft Teams, Slack, GSuite 6 Massive Redefinition of Learning Tech Market

51. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 51 believe internal processes for collaboration are working well believe their employees are fully aligned with the corporate purpose 23% 14% are excellent at building a differentiated employee experience 22% are using design thinking as part of crafting the employee experience 10% Source: Deloitte and Facebook, “Transitioning to the future of work and the workplace,” November 2016 38% Say problem is urgent Focus on Employee Experience

52. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 52 Expanding World of Employee Experience Tools Ad-Hoc Service or No Service (deliver as needed, random, business partner driven, difficult to manage) Managed Service and Service Delivery (integrated service delivery strategy, call centers, outsourced HR services) Self-Service Systems (portals, apps, case management, knowledge base, expertise mgt) Automated Services (voice, apps, AI, nudges, intelligent proactive solutions)

53. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 53 How HR Systems Are Changing Talent Systems of Record embedded into ERP (ATS, LMS, Compensation, Benefits, Surveys, Rewards) Innovative Talent Applications (Social sourcing, AI-based assessment, video interviewing, learning experience platforms, mobile learning, VR- based learning, social recognition, engagement, well-being behavioral change…) AI or Cognitive Front End

54. © 2018 JOSH BERSIN | ALL RIGHTS RESERVED | NOT FOR DISTRIBUTION | LICENSED MATERIAL PAGE 54 White Collar Hourly Senior Leaders Contractors External Network Alumni Line Managers Candidates Senior Geographic Business Partners Talent Specialists (OD, sourcing, recruiting, learning, organized in networks of excellence) Wellbeing, safety, culture, engagement, recognition Analytics, Monitoring, Predictive, WF Planning HR Tech, App development Research, Market Best Practices, Comp, Ben, Rewards HR Prof Development HR Ops, AI and Bots, Intelligence Junior Geo Bus Partners Engagement Feedback Recognition Learning Career Coaching Performance Goals Succession HRMS Payroll/Time Communications Analytics/AI ONA Workforce Mgt Wellbeing Rewards Benefits Sourcing Recruitment Assessment HR Technology Architecture: 2019 and Beyond Built for the Employee Experience Self Service External Services Case and Expertise Management Document, Knowledge Management Employee Communications Transition Programs Employee Experience Platform: Chat | Conversation | Mobile | Integration with Systems of Productivity

55. WWW.JOSHBERSIN.COM JOSH BERSIN Global Industry Analyst October, 2018 HR In The Flow Of Work Are You Ready?

HR Technology 2019: A Wild New World

HR Technology 2019: A Wild New World

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