So you decide to take a day off work. After asking and getting permission from your boss, you realize that you have absolutely no idea how to submit a vacation request. You can barely remember the name of the HR system your company uses. You search your inbox to jog your memory, and the software that appears before you is like someone who has never used a computer before. But that doesn't matter, because your boss doesn't even understand how to approve a request. Your colleague tells you that after digging around the site for ages, she didn't even know how to find her paycheck. It's as if the person who created this app has never used a computer.
While the above scenario may be a bit of an exaggeration, working in America in 2024 is like drowning in a sea of apps. If you want to take time off, there's an app for that. And that's separate from the apps for applying for benefits, submitting expenses, processing reviews, and, frankly, doing whatever mental health exercises your company forces on you. Everything is managed by software programs with barely distinguishable, barely pronounceable names and impossible to navigate. For many workers, managers, and even HR professionals, they're hugely frustrating and a huge time suck. The pandemic and the rise of remote work have only made the situation worse. According to a survey of 2,000 organizations by research and advisory firm Sapient Insights Group, companies now use an average of 21 HR “modules” — different apps for different tasks — up from 10.4 in 2019.
“You end up with what I call a 'kitchen drawer' of HR software,” says Josh Bersin, global HR analyst and CEO of consulting firm Josh Bersin & Co. “You open up the kitchen drawer and look inside and you're like, 'What on earth do I have in here? Where did I get it from?'”
How did this happen? First, the HR software market is lucrative. IBISWorld estimates it to be $20 billion in the US. There are big players like Workday, Oracle, and ADP, as well as many smaller companies and platforms promising better workforce management. For companies, managing employees with software instead of humans is an attractive prospect. Technology and automation have decoupled the size of the company from the number of people needed to manage everyone. Instead of having one HR person for every 100 employees, you have digital systems that can scale, so in theory you can have one HR person no matter how big your company gets. The ideal aim of this technology is to enable one HR person to manage more employee administration, compliance, and requests than the paper-based, face-to-face past.
“HR departments are getting leaner and leaner,” said Ashley Hurd, founder of managerial training platform ManagerMethod. “I often speak to companies that have 200 or 500 employees and only one or two dedicated HR people. They're like an octopus.” Hurd added, “Even with all the technology out there, HR people's inboxes are just too full.”
If prices are rising 10% each year, an explanation is needed.
Fewer dedicated HR people are available, leaving many employees to fend for themselves. The problem is that each company has its own system, and companies are not investing in educating employees about it. There is also a sharp decline in middle management positions that could help. Employees are staying with the company for less time, and by the time they understand all the systems, they have moved on to the next job. This means it takes time for employees to get used to their new jobs and hit the ground running productively, because they have wasted a lot of time understanding their new jobs. how Don't just do the job, get the job done.
“In addition to their day-to-day tasks, the front office now has to get used to and learn to use the different solutions and solution combinations that are proliferating across companies,” said Zachary Chartock, employee experience research manager at market intelligence firm IDC.
Whatever the software, the employee experience is often not great. I feel like a lot of this stuff is either designed for the back office without the front office in mind, or designed by people who don't really know what a good user experience looks like. Management wants to know how many days employees have taken leave, but they don't care if they've funneled the leave into the app. So app designers tend to put the UX for frontline employees on the back burner. Even big, far-reaching tools like UKG and ADP can't do everything. Harsh Kundulli, senior director analyst for HR at consulting firm Gartner, says even companies that have invested in big talent management systems end up having to use other HR software to fill in the gaps.
The problem isn't just with the people who create the programs, but also with the companies that buy them. Companies often introduce a variety of programs and apps without sufficient forethought. Worried about employee burnout, they push mental health apps on employees that no one actually uses instead of addressing what's happening to them. Different leaders have different ideas about what programs they like and don't like, and software providers have an incentive to constantly sell companies new and different features. If prices are going up 10% every year, some explanation is needed.
“There are too many technology solutions out there that claim to have different overlapping capabilities,” Kunduri says. “Often, HR leaders lack the market insight to orchestrate and combine the right types of technologies, so they end up buying a lot of redundant technologies with overlapping capabilities.”
Leaders get caught up in niche systems, using large software for payroll, for example, and smaller, more specialized programs for early employee training and onboarding. This back-and-forth makes the whole thing even more confusing.
“There's a lot of bundling and unbundling going on in the software world,” says Tomer London, co-founder of Gusto, a payroll and HR platform for small businesses. His company is bundling features to make it “intuitive, easy to use, and fun” like Instagram. Sounds good, sure. And maybe they'll solve it.
If the HR software problem were easy to solve, it would probably have been solved already. The experts I spoke to about solutions ranged from mildly optimistic to very pessimistic about the future of robotic HR management. Companies aren't going to revive sprawling HR departments because they're too inefficient and expensive. Either way, you probably won't want to go back to the bad old days of HR people filling out forms at your desk.
“Companies will turn to software when they're short on cash and want to cut costs to be accountable to shareholders,” says Carrie Bulger, an industrial-organizational psychologist at Quinnipiac University.
Some platforms add a layer on top of different tools to put them all in one place so employees have one portal and don't realize how many things they're dealing with. It's an artificial Russian nesting doll situation. ServiceNow does this, and some companies have big enough IT operations that they can create these products on their own, Bersin said. That means employees don't have to touch the awful software you're actually using.
AI won't solve all of this.
As in many other industries, artificial intelligence is on the rise. The hope for HR tech is that AI will be a game changer – bringing about a data analytics revolution and creating an army of digital assistants to handle tedious HR tasks so you don't have to. Some people I've spoken to envision AI-powered chatbots that can instruct employees on how to accomplish tasks. Essentially, you'd type, “Where can I find my pay slip?” or “How do I submit an expense report?” or you could type out a time-off request and it would be sent directly to your manager.
“Each tool has its own version of a digital assistant,” Chertok says. “In the near future, you'll need to know which system to ask for what. But how With the help of my assistant, it's not that difficult.”
That's fine and good, but 10 little chatbots on 10 different tools isn't significantly better than the status quo. There's a race between Oracle, ADP, or Microsoft's Copilot to see who can create a digital assistant to rule them all, but there's no clear winner right now.
Not everyone is excited about the potential of AI. AI requires a reasonably clean data source where everything is linked, mapped and connected, which many companies, especially smaller ones, don't have. Have you ever tried to review HR policies only to be presented with 24 different policies and not been able to decide which one is the newest? An AI might not understand that either.
“AI isn't going to solve this problem unless you take the time to go through the process of mapping and connecting what you need to understand about your workforce with how that impacts the business,” says Stacey Harris, chief research officer and managing partner at Sapient Insights Group. “There's so much that the AI has to understand before it can predict what someone will or won't do, and every company has its own unique dataset.”
Gartner's Kunduri said the buzz around AI in HR has reached a peak of hype, with many companies that have deployed virtual assistants experiencing post-purchase regret.
“These chatbots have often been reduced to FAQs about HR policies,” he says, “and the result is not the incredible productivity gains that are often sold to HR leaders.”
Here's an uncomfortable truth: one way to reduce random apps and constant switching is to have one or two killer solutions that everyone uses, like Microsoft Windows back in the day and Google for search. I'm not pushing monopolies here, but I can kind of see why people don't always hate them. They can achieve a level of scale and efficiency that delivers what people really love, while eliminating the hassle that competition brings to consumers (see Amazon for e-commerce). If every time you change jobs you have the same HR system that you know how to use, that works really well, and that remembers you, that's pretty good.
But it's unclear whether a monopoly will work: Mr. Bersin points out that PeopleSoft, the IBM-backed human-resource-management system released in the late 1980s, was meant to be a panacea but didn't turn out to be.
“Everybody loved it. It was really successful. But as they grew and became very successful, they started building more and more tools on top of it, and eventually it became unusable,” he said. “It's actually very hard to monopolize because the use cases are so diverse across industries.”
Bersin is in the camp that thinks some mishaps are inevitable: “Unfortunately, this market is going to remain competitive, dynamic and turbulent forever,” he said.
There are ways to marginally improve things, but there's no silver bullet or anything that employees can control. Companies can think more strategically about the technology that will help them the most – that means planning what they're trying to accomplish. There are also things companies can invest in to solve the problem – like spending an extra 20% to customize the system or putting together easy-to-read training materials that actually explain how it works. Of course, that doesn't mean people are going to look at those materials or try to solve it themselves. Frankly, there have been jobs where I've completely given up on certain admin tasks because I didn't know how to do it and I was tired of trying.
And so we sit in front of our computers, trying, perhaps jokingly, to “praise” our coworkers for some crappy app that just got released, while wondering if it was even worth it, trying for 20 minutes with no end in sight. Or maybe one day there will be a killer app that does it all, or an AI-powered chatbot will talk to HR about our issues and make us feel a little better.
Emily Stewart He's a senior correspondent for Business Insider, writing about business and economics.