The end of 2011 and the beginning of 2012 have seen a lot of moving and shaking going on in HR and recruiting software. SAP acquired SuccessFactors, Salesforce acquired Rypple, and a couple of promising vendors—SmartRecruiters included—got some new VC funding. This activity is pumping new energy into the continued expansion of recruiting solutions into the Cloud, as well as, further integration of social media functionality within recruiting applications. But for all we’re hearing and reading about out-of-the-box, one-size-fits-all software solutions, what’s more exciting is the growing popularity of the open platform. If you ask me, I’d say this is where we’ll see the most innovation in 2012. Here’s why…
2012 is the Year of the Open Platform
Salesforce has seen significant organic growth over the years; plus, acquisition has certainly been a part of SalesForce growth strategy, although the acquisition of another application isn’t particularly novel in itself. But there’s more to it with Rypple. Salesforce CEO Marc Benioff is doing something very different from other legacy ERP vendors. Beyond the increase in social media functionality in business management software, the bigger picture here is very exciting.
As Ed Newman, Chief Analyst at Inside Talent Management Technology, explained to me, “SAP is trying to be all things to all people. And while legacy carriers may acquire any number of products, all too often these products aren’t fully integrated. They’re not running on the same platform.”
While Salesforce could certainly acquire other products in new application categories, what they’re focused on is building a platform–with a social core–upon which developers can build exactly what specific organizations need. SmartRecruiters is more focused on developing an open platform in recruiting and applicant tracking, Ternynck told TalentCulture, “This is really something we see happening across all markets. Big change in how you sell to enterprise.”
From recruiting to management talent to processing payroll—every organization runs these processes differently. Step back even further, and consider all of the functionality that runs across each area of an enterprise–an open platform would offer a level of customizability and choice of service provider for your entire organization that you don’t normally find in the Cloud. (If that doesn’t get you going, I don’t know what will. This picture of a cat? )
Why HR Thrives in an Open Platform
Of course, Salesforce and SmartRecruiters aren’t the only vendors receiving new funding or expanding through acquisition in recent weeks. True, social media is integrating more deeply as more and more vendors move their software to the cloud. But the bigger trend here is the consumerization of enterprise technology—where technology that started in the consumer markets (app stores, social networks) are moving into enterprise technology. And this is very apparent in the HR Software market. There are a few reasons why:
HR and recruiting have historically been the first business sectors to adopt new communications tools. They’re the points in an organization often interacting most with people (inside and outside of an organization). It’s no wonder social media has become such a hot topic in this space— in recruiting, talent management, and as a social collaboration tool. But the increasingly diverse needs of organizations big and small demand myriad options in human resources and talent management software solutions—and an out-of-the-box human resources management suite isn’t always as flexible as you’d like it to be.
The cloud recruiting platform presents users with build-onto and pick-and-choose options. Whether they’ve compiled like an application marketplace (think iTunes App Store for recruiting software), or by offering an open API, the various complicated processes run in recruiting and HR can find solace in customizability.
Three HR Software Areas to Watch in 2012
All of that said, I believe there are three HR applications which are best positioned to see growth and innovation in 2012: talent management software, applicant tracking and recruiting software, as well as, analytics and reporting applications. I’ll break it down for you:
- Because business leaders increasingly see the value in a system for developing their workforce, Talent Management Software continues to experience rapid growth in the Cloud. This sector has also seen some movement, as large vendors acquire best-of-breeds, particularly in learning management and performance management.
- Many of the core functions of Applicant Tracking and Recruiting Software thrive in the social media arena, and it makes sense that you’ll see more social capabilities evolving in this area first. “We want to put jobseekers back at the center of recruiting software,” said Ternynck. “It should be much more enjoyable and much more social. We’re building features around a one-click apply and allowing candidates to express interest more easily.” And with SmartRecruiters’ Ternynck behind the wheel, things are bound to start looking up for end-users.
- Your ability to identify and track trends in your retention rates, boosts in productivity, and benchmark performance will set your HR department apart from your competitors. And though HR has never had a problem with gathering data, HR software is recently making great strides in delivering technology that allows them to use that data. Recruiting Analytics and Reporting Tools will continue to drive innovation in HR software.
As legacy vendors continue their age-old ERP battle, and as innovative companies like Salesforce continue to dazzle, the moves made by these (rather different) business management providers have certainly set the stage for an exciting 2012. Recruiters and industry analysts alike would be wise to pay attention to continued movement in the market in the coming months.
Kyle Lagunas is the HR Analyst at Software Advice—a resource for recruiting and talent management system selection. For more of Kyle’s expert analysis, check out this forecast on “The HR Software Round Up: Setting the Stage for 2012.” Have your own thoughts? Join the discussion, and leave a comment.