This post is part of G2's 2022 digital trends series. Read more about G2’s perspective on digital transformation trends in an introduction from Tom Pringle, VP, market research, and additional coverage on trends identified by G2’s analysts.

Work in a changed world

It’s time to think longer term when it comes to HR tech.

2020 was about meeting the immediate demands of remote work, and 2021 was about evolving those processes for the medium term. 2022 will involve HR teams thinking about how to empower their remote and hybrid workforces for years to come. 

Talent management goes to the market(place)    

When it comes to what employees care most about, career development is often near the top of the list. In 2022, expect companies to make significant investments in a fast-growing software space—talent marketplace platforms. 

Many managers understand the need to develop their top talent, or risk that those employees will seek that professional advancement elsewhere. But creating individualized, updated career development plans that align with the skills and interests of each employee is a challenge. 

Enter talent marketplaces, which leverage artificial intelligence to connect employees with career development opportunities—such as mentorships, internal projects, or open positions on other teams—based on the employee’s unique skills and interests.

The “secret sauce” in talent marketplaces is their ability to personalize. They take in an individual’s skills and career interests and use large datasets to generate specific recommendations for which development opportunities to pursue. 

G2 has 14 products listed in the Talent Marketplace category as of the end of 2021, and we expect that space to continue growing. Enterprise HR tech players like SAP, Oracle, and Workday have begun incorporating talent marketplace technology into their products, following in the footsteps of established talent marketplace platforms like Gloat and Fuel50. 

So far, the G2 users of Talent Marketplace solutions are mostly from enterprise companies (those with 1,000 employees or more), perhaps suggesting that these platforms are currently better suited to companies with larger numbers of employees, internal openings, and other career development opportunities.

Why is 2022 the year of the talent marketplace? Not only has the technology advanced, but there is pressure on companies to retain existing employees. Employees who believe that their company is invested in helping to advance their careers are more likely to stick around.

For companies with internal career development opportunities but haven’t figured out how to maximize them, talent marketplaces are worth a look.

Companies shift to a more global and less permanent workforce    

For the last six months, recruiting and HR professionals have heard three words on repeat: The Great Resignation. A record-high 4.4 million Americans quit their jobs in September 2021, according to the U.S. Labor Department, a significant increase from 3.3. million “quits” in September 2020. 

Amid an ongoing pandemic, workers are seeking to get more out of their jobs, including better pay, improved work-life balance, more flexibility to work remotely, and making progress in a career that is meaningful to them. For many workers, this means becoming their own boss—either to start a business or to work as a freelancer. 

Through November, 4.97 million applications for new U.S. businesses had been filed in 2021, according to the U.S. Census Bureau, easily surpassing the then-record 4.4 million applications for new businesses in 2020. 

For business owners, the normalization of remote work and the rising popularity of freelancing means that their talent pool will not have the geographic constraints it might have in years past. 

These factors will coalesce into surging demand for contract and freelance workers in 2022—and software that enables companies to find, hire, manage, and pay those workers will become a must-have for many businesses. 

G2’s Freelance Platforms category saw big increases in traffic in 2021 in response to the changes taking place in the workforce, peaking in spring and summer 2021. Since then, there has been a decrease in interest, perhaps owing to companies focusing more on hiring and retaining full-time employees, but we expect interest in this space to remain strong, and well above pre-pandemic levels, in 2022. 

Investors have also shown confidence in the shift toward a more remote workforce that incorporates more workers who aren’t full-time employees. A number of companies with products that facilitate hiring and payments for global freelancers have been a part of large fundraising rounds this past year.

The workforce is evolving, and HR tech will help companies adapt to those changes this year.

Cloud HR systems challenge major players

The big names in payroll and core HR systems are seeing new competition from new products targeting small to mid-sized companies with their products.

G2’s Momentum Grid^Ⓡ for Core HR measures year-over-year growth for a number of metrics, including employee growth, social growth, and web traffic increases. 

Based on G2’s data, the Momentum leaders include companies that are relatively recent entrants to the competitive Core HR space—companies like Hibob, Personio, and Rippling—alongside names that have been in this space for decades, like SAP, ADP, and Paycom. 

These fast-growing companies are focused on making the integration of different aspects of HR more seamless across the business, as well as increasing automation of HR management. They tend to focus more on improving the employee experience with HR software compared to legacy systems.

As small and mid-sized business users make up nearly 80% of the G2 reviews in the Core HR category, there’s clearly a lot of opportunity for products targeting those markets. While HCM management isn’t the flashiest topic, competition in this space will be fierce in 2022.