Now Live: 2024 Fosway 9-Grid™ for Cloud HR
2024 Fosway 9-Grid™ finds Cloud HR market growing steadily with AI capabilities now expected to deliver significant transformation this year.
Fosway Group’s latest analysis of the Cloud-based HR systems market, the 2024 Fosway 9-Grid for Cloud HR, reveals a market that is continuing with modest growth despite dampened wider economic conditions across the UK and EMEA. While growth has stalled for many vendors, some leading providers report growth rates upwards of 20%. This cautiously positive but mixed picture is resulting in an ongoing trend of ecosystem consolidation and vendor acquisitions.
The 2024 Fosway 9-Grid for Cloud HR also shows that the UK is benefitting from a regulatory approach to AI that prioritises innovation, leaving the rest of EMEA with only moderate gains from the impact of AI technologies on HR. Nevertheless, what is true across the whole of Fosway’s market purview is that the ‘human’ element of HR remains critical as AI in HR proliferates, with more than half of respondents to recent Fosway research believing human oversight is needed across all HR processes.
This year’s Fosway 9-Grid for Cloud HR also confirms the persistent focus on skills and skills-based models as key to future success. The report details a continued shift away from traditional roles and job titles towards a skills-based approach to managing talent. However in many cases, while the motivation from HR teams is often there, the tech is lagging behind, with the infrastructure needed to track and deploy skills at scale still evolving. A mindset shift at a company-wide level is still needed.
“This year’s 9-Grid report shows that Cloud HR is a research area that has no signs of slowing down, not least in its its AI-powered innovation,” said Dr. Sven Elbert, Head of Analyst Services and lead analyst for the Fosway 9-Grid for Cloud HR. “Many examples of AI utility are now a baseline expectation for Cloud HR providers rolling out new products and iterations, as the capability of LLMs accelerates and adoption increases by the quarter. The next wave of innovation will be in more autonomous, agentic AI solutions that automate low value tasks. The race is wide open for both vendors to lead the way in innovating and organisations to exploit the possibilities by a market constantly reinventing itself.”
Amid the continuing AI gold rush, there are clear areas for improvement in Cloud HR: Satisfaction with the people experience is still frustratingly low in many companies, requiring more than a cursory HR system refresh - deeper needs like meaningful work, personalisation, and a connected journey for workers should be the drivers of future change, and the rise of extensibility platforms that promise developed and extended functionality of existing platforms mask hidden costs that can significantly alter the Total Cost of Ownership. Elsewhere the success of AI is beginning to create its own internal challenges as businesses look to reconcile ecosystem priorities with newfound ownership and governance issues.
“Cloud HR proves yet again to be one of the most fiercely contested market segments,” said David Wilson, CEO of Fosway Group. “With ongoing priorities such as skills, personalisation and employee experience taking leaps forward in large part thanks to the fast-developing AI story, it will be many businesses’ response to internal governance and external regulation issues that mark them out as change leaders in this new transformative era of Cloud HR tech. Fosway Group will be there to monitor all developments closely as the market evolves further.”
The full 2024 9-Grid for Cloud HR report can be downloaded online now at https://www.fosway.com/9-grid-2/cloud-hr/
Fosway’s David Wilson and Sven Elbert will take questions on the research in a live online ‘Ask The Analyst’ session on 8 October 2024. Register for your free place here. Places are allocated on a first come, first served basis.