Startups boost HR tech momentum in Singapore
Will you hire bots to interview potential employees?
Although future-proofing the workforce remains a key component of Singapore's national digital blueprint, the broad-based digitalisation drive has not spared recruiters responsible for the unenviable task of managing the city state's limited human resources that remain crucial to achieving the city's vision.
Amidst the Lion City's chronic manpower problems, human resources technology (HR tech) which could range from chatbots to data-driven employee technologies to the automation of administrative labour like evaluations systems, talent request and onboarding process, hold the promise that could easily pave the way for the future of work.
One such startup disrupting the local HR space is PeopleWave, whose products include a data-driven employee appraisal system and dashboard displaying an organisation's performance as it aims to capitalise on the growing recognition of the business value of data-driven people management and analytics.
“CEOs and HR leaders have long embraced new technology but it's only now that HR tech is catching up,” Damien Cummings, Peoplewave CEO told Singapore Business Review. “Marketers are data-driven and sales leaders are using Salesforce but HR hasn't had the same level of tool, until now.”
Over the past five years, capital injections into global HR tech startups have been steadily growing from US$413m in 2012 to a record US$2.22b in 2016, according to market intelligence platform CB Insights.
On the local level, Singapore’s HR tech market is trailing slightly behind US and other Western countries as it's still in the process of moving away from compliance-driven tools including payroll and leave management towards tools that are able to provide actionable insights and make HR more of a business function, observed Cummings.
Also read: DBS rolls out virtual bank recruiter
Armed with curated workforce insights, companies are therefore able to make informed decisions on recruitment, employee assessment, workforce planning, employee engagement and retention.
“Given the business friendliness of Singapore, many HR tech players [have] come in and they help to drive the vibrancy of the ecosystem,” according to Adrian Tan, co-founder of HR consultancy firm The Resource Group, who forecasted that a more solid usage of AI beyond chatbots is set to overtake the prevailing trend of data-powered analytics for predictive reasons over the next few years.
The application of blockchain technology is also another developing trend in the HR tech scene, observed ManpowerGroup Singapore country manager Linda Teo, especially as the distributed ledger technology enables companies to verify credentials in a more credible and secure manner.
Indorse is one such startup as it leverages on blockchain technology to build a social network similar to LinkedIn. Unlike traditional social media platforms, however, where users can make any claim regarding their skills set or work experience, Indorse members need to attach proof of their claim which will then be 'indorsed' or verified by other users in the same domain.
Singapore has been globally recognised as the third most prepared country for the wave of intelligent automation, trailing only behind South Korea and Germany in The Economist's Automation Readiness Index.
Beyond periodic skills upgrading through the governments SkillsFuture programme, the Lion City is also actively tapping on disruptive technologies like AI and robotics to future-proof all aspects of business against the threat of disruption including its most valuable asset – human resources.
Much of the interest in adopting HR tech largely comes from the startup sector where manpower and resource are a common issue hampering growth, according to EngageRocket founder CEO CheeTung Leong whose firm automates the administration and analytics behind employee surveys to analyse employee feedback in real-time.
“Generally well-funded startup are early adopters, followed by foreign MNCs, local banks, SME with 2nd/3rd gen owners, local MNCS, SMEs with original owners in this exact sequence,” echoed Tan.
With the ongoing digitisation of the bulk of HR work, are recruiters at risk of being displaced by chatbots and predictive analytics too? Analysts believe this won’t be the case as much of the recruitment and employee assessment work is still hinged on the importance of human judgment and expertise although Peoplewave’s Cummings believes that the model is likely to be nimbler and would feature more subscription models, software license fees and consulting engagements in the future.
“It’s in a company’s best interest to have an all-round approach that does not only include the latest technologies, but also prioritises the human expertise that recruitment consultants provide,” said Robert Half Singapore managing director Matthieu Imbert-Bouchard. “There is just no substitute for real-world interaction and human judgements when it comes to finding and securing the right talent.”
Although digital recruiters could be used to perform the screening process for a bulk of entry-level jobs, senior roles that attract a niche talent pool cannot be filtered and judged by a bot as such tasks still need the handling of an experienced HR manager.
“Within the HR function, firms have been mindful of the extent to which they should automate or digitise this function,” according to Shinjika Shukla, associate director, Michael Page Singapore. “In situations such as employee grievances, employee interaction with chatbots may not solve the purpose.”
In fact, a survey by the ManpowerGroup Solutions reveals that almost a fifth (19%) of jobseekers still opt for in-person interviews, indicating that candidates still place premium on face-to-face meetings despite the pool of available technology.
“As important as it has been for organisations to implement technology solutions within their HR functions, employers are mindful that this function requires human touch points from time to time without which it may lose its effectiveness,” Shukla added.
In order to keep pace with Singapore’s smart vision targets, recruitment teams have actually been forging closer partnerships with HR tech players so that they are able to direct their energies towards higher value types of work.
“HR teams are actively looking at how AI assistants can play an active role in the recruitment process from initial candidate filtering all the way to the interview, offer and on-boarding process,” according to Lee Jin Hian, founder & CEO, Evie.ai, an AI-powered assistant that can be used to schedule meetings and interviews, track to-do lists and book meeting rooms.
Time and cost also continue to drive the business priorities of HR managers and only through such collaborations with tech players will they be able to meet business targets and withstand the digital disruption.
“The smartest recruitment networks are investing in or collaborating with HR tech vendors. Whilst it's not mainstream yet, within the next 2 years all candidates will be using agency endorsed software for applying to new jobs, going through background assessment, preparing for their first day on the job and being managed through their first 100 days in the new role,” said Cummings.
With consulting firm Korn Ferry estimating Singapore to be amongst those poised to be the hardest hit by a global talent shortage, any solution that could give recruiters more time to look for value-adding candidates in a shrinking talent pool is a welcome development.
However, companies need to forge greater industry ties in order to avoid redundant HR tech solutions, suggested The Resource Group's Tan. “Singapore business will only stand to benefit from the myriad of new choices. But the market is still small. This require deeper collaboration between providers to integrate with each other so that customers need not remember 10 logins to solve 10 problems.”