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While big tech started the year letting go of 10 percent of its workforce, quiet quitting and the talent shortage aren’t going away as both trends are rooted in generational behavior and demographics which defy macroeconomic disruption. Furthermore, the relative strength of the US economy and the expected stimulus of the Biden Infrastructure bill causes us to go long in the US, expecting a soft and short dip without a major recession.

Europe will be hit harder due to the war in Ukraine and the related slow-down in the German economy. However, without enough workers for every job opening, it is unlikely that CHROs will refrain from hiring people. So, while recruiting is looking slow at the start of the year, it will pick up towards the end of 2023 as large companies keep talent acquisition front and center in their HR transformations.

Beyond the continued efforts to improve recruiting processes and technology, particularly consolidating multiple ATSs and replacing unscalable solutions in the enterprise market, there will be a significant uptick in employee mobility programs. We’ll see companies reshuffling workers to adjust to tighter markets and optimizing the workforce based on better skills classification.

In a nutshell:

  • The focus on the candidate experience will shift to the employee experience.
  • HR transformation will continue to wrestle with work-from-home challenges, driving a greater desire for modern performance management systems that cover all employees.
  • The impact of machine learning and the AI bill of rights on hiring will shape mid- and long-term HR strategy.

What part does the state of the tech market and the role of the CHRO play in this scenario? Read on to find out.

Trend 1: Recruiting Efforts Will Remain Strong

Talent acquisitions teams will continue looking for ways to attract, engage and hire the skillsets their organizations demand. There’s a pressing need for improvement in this area: according to a recent Gartner study, 36 percent of HR leaders define their sourcing strategies for finding the skills they need as “insufficient.”

Contingent workforce hiring and internal mobility strategies are helping some companies meet their needs by filling short-term positions or reallocating talent to where it is most needed. Still, for many, these strategies alone won’t completely solve the skills gap caused by the digital transformation most organizations are actively orchestrating.

We are confronting this myriad of issues against the backdrop of the Great Retirement. With 75 million Baby Boomers expected to retire by 2030, bringing even more qualified workers is a challenge that not all talent acquisition teams are equipped to surpass.

In this context, many organizations have concluded that they can’t rely on their current technology to secure talent now and in the future. As such, despite a potential recession looming on the horizon, 63 percent of HR decision-makers reported plans to increase spending on recruiting technology.

Within this category, 48 percent of respondents want to invest in improving career sites, a critical first touchpoint for many candidates. Many Avature customers have already upgraded their career sites by adding semantic matching to suggest jobs to visitors. For more on this, see our award-winning solution.

Chat is the other area where AI will impact candidate experience. This year, we expect chatbots to move beyond greetings to meaningful conversations that help connect jobs to visitors. Avature has already announced that it will release its chatbot later this year.

These improved candidate experiences will be meaningful for larger enterprises that offer hundreds or thousands of jobs from their career site.


Banner of Avature's guide on how to create a candidate-centric career site and a link to the landing page to download it.

Regarding CRM, 45 percent of leaders want to increase spending on this solution to better pipeline and nurture talent ahead of business demand. To improve service delivery to line managers, the intended investment in ATS follows closely, with 42 percent.

The Advantages of the One-platform Approach

Increasingly, organizations are looking to reap the benefits of CRM, ATS and onboarding in a single suite, provided they can assemble best-of-breed solutions. This approach empowers a seamless, branded experience for candidates and new hires, who no longer have to reenter personal data in multiple systems while simplifying privacy compliance. A familiar user interface and reduced training workload for internal stakeholders can help drive solution adoption. Now that this is finally possible with newer, multi-solution SaaS platforms like Avature, we expect this trend to take off this year.

This model makes all data available in one place and accessible to all users based on the solution design and configuration. It doesn’t force users to manage multiple accounts and eliminates numerous integrations while supporting real-time analytics of the entire recruiting process. Such integration and visibility are practically impossible to achieve with siloed systems that restrict data flow and disrupt the candidate and hiring manager experiences.

Trend 2: AI and New AI Regulations

Now that ChatGPT is writing emails for CEOs at Davos, there will surely be plenty of top-down pressure on HR to put AI to work in the enterprise. Unfortunately, AI has not run for office yet, so don’t expect a favorable regulatory climate for the technology. HR leaders will be expected to walk this tightrope through 2023 and beyond.

Zooming in on the use of AI tools in the hiring process, New York City plans to restrict it. Although Illinois regulated the use of AI analysis of video interviews in 2020, NYC is the first to expand its reach to the whole recruitment process. The EU will also be drafting legislation relating to the use of AI that will specifically impact employment.

Keeping up with the upcoming changes in regulations and understanding exactly how AI is working to enhance processes alone is just the beginning. Companies will take more control of how they deploy AI, deciding when and where it is appropriate and beneficial.

We believe that organizations will favor vendors that offer a variety of ways to leverage AI within their systems, as well as a white-box approach to ensure transparency. This growing need to understand what’s under the cover will steer companies away from white-label systems that providers resell pre-bundled with their solutions. Instead, they’ll favor vendors that build and train their own neural systems and provide direct access to the experts behind the algorithms.

Deutsche Telekom demonstrated a particularly well-calibrated approach to AI, combining the early development of clear guidelines around its use with a high value-add use case defined by a high-touch internal mobility program for top performers. Favoring Avature’s highly transparent approach to AI, they leveraged AI successfully and introduced objective standards for an actual win-win scenario. Expect to see more ” targeted ” AI deployments this year from strategic HR players.

Trend 3: The State of the HR Tech Market

According to industry analyst Josh Bersin, workplace technology investment hit new highs in 2021, but fell in the first half of 2022. That was just the beginning. As start-ups reduce spending and lay off workers, 2023 is bound to impact tech vendors in several e ways.

The shutdown of the IPO market and the related VC and private equity belt-tightening will reshape the vendor market. Larger software providers will take this opportunity to scoop up newer technology from discounted start-ups, leading to consolidation. Reduced exit opportunities will cause executive management changes, some of which we’ve already witnessed in recent months.

Why is this important? You can expect prominent vendors that accelerate their aggressive purchase-led growth to put product development efforts on the back burner. At the same time, they’ll limit smaller cash burners, which will further impact the relationships between organizations and vendors.

We foresee that smart companies will favor independent, founder-led vendors with solid balance sheets, particularly those with experience in the HR space who can guarantee long-term support of the organization’s strategic HR vision.

Suitable references will be even more crucial when performing due diligence. Buyers will demand evidence of implementation success and scalability, and spend more time focusing on track records, total cost of ownership, and quality. There will be deeper scrutiny of a vendor’s customer base, customer tenure, deployment depth, and follow-on purchasing patterns.

Innovative companies will also look for partners with product roadmaps they can shape to some extent as they navigate the significant trends mentioned above.

Trend 4: Employee Experience in the Face of Quiet Quitting

Many organizations are struggling with disengaged workers. The challenges posed by quiet quitting and the Great Resignation will keep employee experience at the top of many HR teams’ lists of priorities.

Expect companies to focus more on critical moments of the employee journey, starting when a new hire accepts an offer. They’ll seek out technology to capture employee information and help them design strategies that engage workers in meaningful ways. It may look similar to what these Avature customers did in 2022:

  • Epic knew the value of a positive onboarding experience and the importance of promoting inclusion and creating a sense of community among staff. That’s why it created a personalized onboarding and relocation portal for new hires to complete the necessary paperwork and find valuable information. Avature DNA provides a professional networking space for new cohorts to get to know each other before day one.
  • L’Oréal reduced turnover amongst employees that perceived a lack of opportunities for personal development. With the help of Avature, it designed an internal mobility platform to showcase potential professional growth for its workforce.

Trend 5: Learning Solutions Will Power “The Great Reskilling”

Nine out of ten workers say they learned a new skill recently, but 98 percent of companies still report significant skill gaps, according to a recent Mercer report.

This statistic signals that making standardized L&D programs available isn’t enough to get the skills a business needs to succeed. To upskill their workforce effectively, organizations will need to address three issues:

  1. Reporting and capturing the skills that an employee has and those they need to develop.
  2. Aligning the skills they are learning and those required by the business.
  3. Catering to a new generation of learners’ expectations of learning systems, who prefer consumer-like, on-demand experiences.

To see substantial benefits of L&D programs, companies will connect that perceived idea of upskilling to actual business needs while personalizing the learning experience for each employee. More organizations will move towards a one-platform approach to talent management to do so effectively. They’ll leverage feedback, reviews and goals to determine skill gaps and provide resources to upskill in a meaningful way for the company and in line with individual interests.

Organizations will also invest in social learning solutions, such as Avature Learning. This technology will empower the workforce to share knowledge and expertise and learn from one another. It’ll promote employee engagement through user-generated content, enable organic curation based on interaction and feedback, and promote community creation.

This collaborative approach to learning will complement traditional resources within an organization and capitalize on other available skills and knowledge.

Trend 6: The Role of CHROs as Change Agents Will Gain Momentum

The CHRO role will continue to shift over the next three to four years as organizations reshape their value proposition to employees and learn to accommodate and leverage the new dynamics of the stay-at-home workforce and the hybrid work model.

CHROs that capitalize on this historic labor realignment of how people work to build a post-industrial trust and output-based employment model will perpetuate the development of new culture-building initiatives. Visionaries will prioritize testing new ideas over enduring the pressure of continuous expansion  And anything new done at scale will stress the HR tech stack more.

HR Technology as a Transformation Enabler

In recent conversations with HR Leaders, Dimitri Boylan, Avature’s CEO, stated the need for dovetailing the HR transformation into the greater digital transformation of each organization. Because HR transformation goes beyond “moving to the cloud”, CHROs will need to develop a blueprint for the specific underlying component of the digital transformation that powers the strategic HR initiatives they want to launch.

They’ll resort to frameworks and methodologies similar to Avature’s Total Talent Framework , allowing them to convey their strategic vision in C-suite discussions. CHROs will produce blueprints of how technology will help them bring the new culture to life and achieve their long-term vision cohesively. They’ll move away from solution-specific approaches and favor flexible platforms that will power their strategies for years to come.

To Conclude

Technology remains a strategic enabler in 2023. Talent solutions investments will be significant throughout the year, and it’ll be vital for CHROs to play an active role in defining how that budget is allocated.

Two critical aspects will influence this decision: whether the vendor can provide the technology that addresses present and future challenges, and whether they act as a partner that can share their expertise based on their experience with similar customers. Organizations that choose this type of vendor will be better equipped to adapt to new scenarios in 2023.

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