Enterprises Focus on Human Capital in Response to Changes

Enterprises are investing in human capital management (HCM) technologies to improve their agility in uncertain times, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2023 ISG Provider Lens global HCM Technology Platforms report finds that organizations are turning to unified HCM platforms for reliable data insights and effective tools that allow them to pivot more quickly as business conditions change. More enterprises are seeking new HCM capabilities, including AI-driven automation, personalized employee experiences and innovations that allow HR organizations to do more with fewer resources.

“For a growing number of enterprises, change is mission critical,” said Stacey Cadigan, partner, ISG Human Capital Management and Enterprise Transformation. “HCM platforms provide data insights that make complex organizational changes more manageable.”

AI is becoming a core element of many HCM applications as organizations embrace efficient, accurate automation of HR tasks, the report says. They are relying on AI to evaluate resumes, give employees tailored career advice, offer training, make personalized decisions on benefits and ensure payroll compliance. As generative AI (GenAI) matures, ISG expects nearly every HCM technology vendor to integrate it into their solutions in the coming years.

Enterprises investing in HCM platforms are also looking for more consumer-like user experiences for their employees, ISG says. Over the past two years, platform vendors have carried out major upgrades to make their systems as approachable and easy to use as online platforms such as Facebook, Snapchat or Amazon.

Interoperability among HCM tools is another high priority for enterprises, the report says. Companies want to be able to add components, such as a recruiting platform, while maintaining a consistent base of data across all elements of the solution. Providers are meeting this need by using web services, microservices architectures and modern integration toolsets.

Many enterprises are also focused on improving employee engagement in response to digital communication fatigue, overworked employees and rising employer-employee tensions that have led to lower engagement scores, ISG says. HCM vendors are introducing solutions that provide real-time insights into workforce sentiment and help companies manage employee needs.