Christopher Baum at SoftwareAdvice.com published a thought provoking article on where the HR software market is headed in the short to medium term.

The take home points I got are:

• Cloud based systems are where the growth is
• Consolidation will be intense in the performance and talent management sector
• Management dashboards are now de rigueur
• Employee self service is the way forward
• New entrants are going to disrupt a relatively steady industry

All of this ties in with my personal experience of selling into HR departments over the past year.  Many HR departments have had budgets squeezed for the past three years.  Demand for overdue solutions has built up. It’s amazing how many large companies still use Excel for tracking core HR data like annual leave/PTO. Startups with point solutions are feeding off this and winning across the enterprise and SMB sectors.

Two other key factors that are changing the industry. The first is that there are lot more companies going global early. This means more mini multinationals. The price of software that works internationally has up to now been seriously prohibitive. This creates a lot of opportunity for lower cost cloud based systems. In the interests of full disclosure, I’ve a completely vested interest in saying that. But it is true.

Secondly, the purchasing process is changing dramatically. Despite resistance from many of the incumbent players, HR managers now search, sign up and trial HR software without any salesman in a suit knocking on their door. IT is typically involved at a much later stage. Often to confirm that the service is kosher. The beauty of a good SaaS service for the IT manager is that it doesn’t add to his workload.

Overall, it looks like there’s good reason to be optimistic.

This entry was posted on Thursday, April 7th, 2011 at 7:20 pm and is filed under HR Software. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.