By Isabella Fox. Isabella’s role as Investment Director for ECI Partners took her to the recent HR Tech Europe Conference in Amsterdam. Here she shares her insights from the conference and ECI’s portfolio company experience
Human-centric AI
Investment in AI continues, although it has transitioned from being perceived as innovative to being an enabler. The reality of AI being utilised effectively by HR teams, however, remains behind the curve. Whether it is organisational structure or data, most businesses lack sufficiently stable foundations to maximise AI’s efficiency, resulting in the risk that AI is layered into businesses without improving productivity. Many businesses are still spending a lot of time fixing interfaces or grappling with data.
This presents an opportunity for tech and AI providers to create human-centric solutions. We’ve seen that even digitally advanced firms are still doing a lot of HR activity in very manual ways – i.e. recruitment, despite it being one of the first areas to adopt AI solutions. The solution in today’s environment can’t just be whether the tool is innovative; it is whether it is easy to adopt by the end users.
The importance of the right Tech Stack
The HR tech stack is vast. In an ideal world, a core HR Information system would be integrated across some key areas:
• Talent acquisition and recruitment
• Performance management and employee development
• Learning and development
• Employee engagement and wellbeing
• Payroll and benefits
• Analytics and reporting
• Collaboration and communication tools
However, an HR tech stack usually evolves in a slightly less ordered way, as point solutions are often needed, which means they aren’t always fully integrated. As businesses grow, they need to evaluate whether their Human Resources Information System (HRIS) is sufficient for their needs. There is an efficiency and usability experience factor for both employers and employees that is causing change in the sector, as HR teams focus on streamlining systems. This, in turn, is driving better employee experience, improved compliance, and data-driven decision-making.
The resilience of HR teams
The period since 2020 has been tumultuous for HR teams as the shift to remote working and the wave of job changes have kept teams incredibly busy, and the pace of change doesn’t look set to slow down. There is still a lot of uncertainty in the market, and with the advent of AI, there has been additional complexity to consider. Overall, the consensus at the conference was that these teams have had to show remarkable resilience in recent years. The future is bright, with AI offering the promise of a reduction in manual tasks; however, this is not immediately on the horizon for most teams.
Employee wellbeing is still a top priority
Wellbeing remains a key focus for those in HR across all job roles, with the likes of Coca-Cola having wellness rooms across its factories. For HR Tech platforms, modules such as employee engagement and wellbeing are becoming increasingly important for an HRIS to accommodate.
The first step to enhancing wellbeing is to track it with monitoring, with HR platforms providing new and easy ways to understand employee sentiment. That increased monitoring inevitably has led to more demand for levers to pull to improve engagement. Changing regulation/labour laws is also a driver in some industries, but for the most part, it is employee expectations that continue to grow, and HR tech is responding to that need.
It is clear that AI remains the ultimate buzzword in European HR tech. However, the landscape has evolved, with AI now part of a continuous transformation as opposed to the single catalyst it was considered to be a few years ago. The impact on the sector is beyond doubt – it is the pace of change which is being debated.
ECI is a private equity investor with over 45 years of experience supporting growth-focused businesses. Managing over £2bn in funds, ECI invests in companies valued up to £300m, taking either majority or minority positions.
The firm is known for its collaborative, value-driven approach, working closely with management teams to drive growth. ECI offers support across areas such as acquisitions, market expansion, employee engagement, and scalable technology.
