State of HR Systems Market Europe 2016 Sierra Cedar Survey Results

For the last 19th years, Sierra Cedar have been conducting a survey on HR System adoption.  This demonstrates admirable commitment to a market that ebbs and flows like the form of our star strikers in the European Football Championships (who are only on their 15th edition).  The survey is an invaluable resource to those working in the HR Technology ecosystem – the report can be downloaded here.  In this article I wanted to share some of the findings that caught my eye, but mainly to ask you to complete the survey for your organisation, before 8th July, so that this report is even more valuable next year!

The Big 2 still dominate – I am not talking about the Germany and Spain duopoly in Euro 2016, who have won most cups with 3 each.  In European HRMS adoption, the ‘Big 2’ tech providers, Oracle and SAP, dominate with 83% of the market.   SAP (HCM plus SuccessFactors) make up 52% and Oracle 31%.   ADP, Kronos and Workday make up 25%. This might surprise delegates who were at HR Tech World Spring 2016 in London, for example, noting the highly visible presence of CoreHR and Workday.  The ‘Big 2’ have their legacy customers, the onus is on the many challengers to prise them away and build their market share.

How much does this software cost? For large companies (with more than 10,000 employees), the average license cost per employee per year, is $116 (or €102).   For smaller companies with less than 2,500 employees, this cost is much more at $394 (€348).  This excludes implementation costs.  Now for this amount, you might even get you a ticket to one of the group stage matches in France.  In fact, why not spend the money on football tickets instead, your employee engagement scores will surely increase? *nervous laughter*.  When you have such highly paid employees on your payroll as Cristiano Ronaldo, who has a salary of €21m per year apparently, you want to get the most out of them.

Could wearable technology give us insight into players’ performance? 55% in the survey think using wearables will “increase workforce productivity”.  16% of organisations in the survey are using or evaluating wearable technology at the moment.  According to this article we might see Wayne Rooney cavorting around Old Trafford wearing a tracking device.

The most common pathway to an HR Technology Transformation, with 26.5%, is “Rip & Replace” which is basically moving everything all at once to the Cloud.  This is like selling your 3 most reliable players in a winning team – a tactic that is a bit risky!

Contrary to reading the industry press, not everyone is in the HR Cloud yet, it is estimated that about 50% of core HRMS is still on premise.  This might have something to do with the residual customers of the Big 2 taking their time on the upgrade path and working out options, and a rump of organisations where moving to the cloud brings more security and privacy issues.   One thing’s for sure, whichever country’s team wins in Paris will be in Cloud 9.

As you read the survey report, bear in mind the results are based on an adoption and do not represent market share.   In my view, it’s always useful to read these surveys for good background context.  This survey also highlights some of the trends the analysts are seeing and refers to useful frameworks used.  If you are considering making changes to your HR Systems, always go back a step to understand what your business really needs from HR and how this will support your HR Operating model. This article might also be useful – How to Earn your HR Cloud Tattoo.

Finally, make sure you complete the SURVEY before 8th July and good luck to your team in Euro 2016!

This article was a guest post on HRN Blog

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Five themes from HR Tech World Spring 2016, London

HR Tech World Spring 2016 London    The 2nd HR Tech World was held in London’s ‘ExCel’ centre – oh the sweet irony, and a pertinent reminder of how far we have come!  Here is my view of some of the themes emerging from the conference.

This was an excellent conference with good speakers, a mix of old and new and enough space for good conversations which is what the event is all about.

But first things first, here are all the presentations from HR Tech Congress in one place which is a fantastic resource to flick through.

Software is Eating HR

John Sumser declared “The end of the HR enterprise software era” at HR Tech in Amsterdam 2013,  we have now automated pretty much all we can.  Software continues to feast on HR, starting with the horrible bits we don’t like and leaving the tasty morsels to our managers and HR people and change superstars – well that’s the theory anyway.

Lots of orgs have moved to the Cloud, so we are accumulating lots of lessons and methods to internalise before embarking on our cloud journey.  There was a whole steam dedicated to user adoption for example with presentations from Rolls Royce and Cushman & Wakefield.  Before moving to the Cloud, give this a read, How to Earn your HR Cloud Tattoo, and maybe share your case-study, and tattoo, at the next HR Tech Congress?

Sierra-Cedar kindly shared their research findings and presentation on their, 2015-2016 HR System Survey.  Some findings caught my eye, including:

 

The ‘Big 2’ tech providers dominate in EMEA with HRMS adoption with 83% of the market. SAP (HCM plus SuccessFactors) make up 52% and Oracle 31%. ADP, Kronos and Workday make up 25%. This might surprise some delegates noting the presence of CoreHR and Workday for example.  The ‘Big 2’ have their legacy customers, the onus is on the challengers to prise them away and build their market share.

The average cost per employee per year for SaaS for large companies (>10,000 employees) is $116 and for smaller companies (<2,500 employees) this cost is $394.

Wearable Technology – 16% of orgs in the survey are using or evaluating. This is an interesting trend to watch which I highlighted in my recent article Quantified Workplace: Trust vs Technology? 55% using wearables believing the benefit to be “increased workforce productivity”.

Rethinking Organisations

Josh Bersin summarised Deloitte’s research “92 percent of companies believe that redesigning the organization is very important or important, making it No. 1 in ranked importance.  Companies are decentralizing authority, moving toward product- and customer-centric organizations, and forming dynamic networks of highly empowered teams that communicate and coordinate activities in unique and powerful ways.”

This is music to my ears! For too long, companies have spent too much time tweaking round the edges of on initiatives such as employee engagement.  This is often a distraction from solving the root cause of business problems and the looking at the big picture.

As we move to new business models and organisational structures, we will need to redesign HR, and the software that supports this.   This will quickly supercede some of the current HR debates around talent, performance management and employee engagement.

The winners will be those that embrace diversity

Diversity was a theme from this conference, including a presentation from Martha Lane Fox, who made a powerful case for UK plc to take a lead on the internet as a cause for good.  But we have some work to do…

Heidi Spirgi from the Marcus Buckingham Company shared research that should tie your stomach in a knot, with her presentation, Women & Technology, the findings speak for themselves :

Currently only 17% of people working in tech in the UK are women

AND

UK is experiencing a digital skills gap that is forecasted to reach 745,000 workers by 2017

60% of college graduates are women in Europe

The first good reason for diversity is fairness, allowing all member of society to flourish.

The second good reason for diversity, is that if your organisation does not pull its ideas from the widest talent pool to solve problems, then you are likely to lose competitively.

The concept of Diversity of Thought and this paper is worth reading.  As Dorothy Dalton has said, “how can we talk about gender as a ‘diversity’ issue when 50% of the population are women, it’s a balance issue.”  Lots more we can do here…

Challenges with People Analytics

There were some presentations showing success in the use of people analytics to solve business challenges such as determining office location, retention, absenteeism and successful recruiting in the Smart Data stream.

This year, the percentage of companies that believe they are fully capable of developing predictive models doubled, from 4 percent in 2015 to 8 percent in 2016.

This is a hot area, but in danger of not fulfilling its massive hype due to structural issues we have in HR such as skills, data, systems and robust frameworks.

Using a house analogy, there is no point investing in smart sensing technology when the plumbing and heating don’t work.  I will be writing more about the barriers to People Analytics in subsequent articles.

Startups disrupting HR?

The start-ups seemed to be even busier than previous conferences with well attended sessions and stands.   The main areas were in employee engagement, recruiting, learning, employee feedback, onboarding & employer branding.

The winner of the competition was Arctic Shores who use science and games to identify high potential millennials.  Here is a useful list of the start-ups from Faye Holland, “#DisruptHR – who will you make a beeline to meet?”

See you in Paris!

This was a guest blog for HRN Blog,"Five themes from HR Tech World Spring 2016, London"

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