At many companies, especially small and medium-sized businesses (SMBs), human resources and learning and development are managed in one organization. These processes include recruiting and hiring, onboarding, managing benefits and payroll, performance management, and training. As businesses look to become more digital and efficient, HR and training technology providers are developing offerings that integrate HR and L&D processes on one platform.
Recent funding reflects this trend. In January, Namely announced the close of its $50 million Series D funding round, bringing its total funding to $157.8 million. This funding round was the largest venture capital round in core HR technology in the past year. In October, Personio closed a $12 million Series A funding round, which it plans to use to improve its product solutions and expand across Europe. Its goal, according to CEO and co-founder Hanno Renner, is “to become the central platform for human resources management around all digital HR processes.”
Both Namely and Personio were founded by leaders who felt that the HR tools used at their SMBs were inefficient and disengaging. “As a manager,” says Matt Straz, CEO of Namely, “I realized that employee data was not in one, easily accessible spot … I wanted to create an all-in-one platform to help companies make better decisions about people. Beyond that, I wanted to create a platform that employees love to use – one as simple and intuitive as social media platforms.”
Along those lines, Namely’s platform manages payroll, benefits and talent management processes such as performance reviews and ongoing feedback. With its Series D funding, Namely has also introduced time management, managed services and analytics offerings. Straz says Namely’s platform helps its more than 900 clients with employee engagement, organizational culture, and, “most importantly,” making strategic decisions using data and analytics.
Personio’s platform, similarly, manages recruiting, HR management and talent development processes, including onboarding, feedback and individual performance goal tracking. When HR and performance management systems are integrated on one platform, Renno says, managers in those departments are able to save time by reducing or eliminating administrative tasks and focusing on other work.
The Benefits of Integrating Platforms
Straz says that mid-sized businesses, Namely’s target audience, “are some of the fastest-growing companies in the country, working on incredible things.” They need platforms that will streamline HR processes and scale their infrastructure as their workforce grows. They also “need to provide a best-in-class employee experience,” which Straz believes can’t be done using the current average of over eight HR systems.
Personio focuses its product on companies with 10 to 1,000 employees. Renner says businesses of that size “are still served by outdated and disparate systems” and typically have small people management teams. Instead of having experts devoted to recruiting, payroll and talent development, they tend to have more generalists. Because of the diversity of their tasks, Renner says, these HR managers “want a system that combines all these tasks in one.”
“Business is digital,” Straz says, “and HR should be there as well.” Employees – including L&D and HR employees – are increasingly digital people, and the platforms they use should meet their technological expectations. It should also be easily accessible, which is why Namely has developed a mobile app and experience. By going digital, organizations are also able to be more transparent, Renner points out. Instead of having paper files under lock and key, employees can access their information online.
Enabling Better Analytics
In a June article for Harvard Business Review, Peter Cappelli, professor of management at the Wharton School, wrote that “for most companies, the challenge in HR is simply to use data at all – the reason being that the data associated with different tasks such as hiring and performance management, often reside in different databases.”
Cappelli’s recommendation, after managers have usable data, is to start by looking “at the big picture – graphs plotting outcomes across the organization and then over time.” Then, examine that data frequently. Finally, identify the relationships among the data; how are the hiring criteria you use related to performance, for example?
Having employee data in one place means it’s easier to access and analyze these data. Depending on the platform, some of the analysis might be done automatically, as well. Then, it’s up to the learning leader to use that analysis to make more informed talent decisions that will improve business results in the short and long term.