Top HRIS-SaaS Trends to Look Out for in 2021

Top HRIS-SaaS Trends to Look Out for in 2021

From the time it was conceptualized in the 90s, Software as a Service, or SaaS, has had everyone’s attention with its pay-per-use and cloud-based access models. Off late, advancements in data gathering and cloud technology have bolstered the adoption of SaaS across verticals, including Finance, Healthcare, and most lately in the Human Resource Information System (HRIS) or the Human Capital Management (HCM) space.

Today, we associate SaaS with fast-paced development, product-led growth, and secure data handling, in addition to the pay-per-use functionality on the cloud. In fact, according to Gartner’s research, every small and medium-sized business (SMB) and enterprise make budget allocations for SaaS across departments, with every employee accessing SaaS applications every day, one way or the other. A closer look will reveal that a large chunk of these SaaS-based applications in an employee’s daily routine are related to the HRIS.

The HRIS segment has been a late adaptor of SaaS, as traditionally HR has always been ‘on-premise’. However, Gartner predicts that by 2025, 60% of global midmarket and large enterprises will have invested in a cloud-deployed HCM suite for administrative HR and talent management.

Which begs the million-dollar question – How will SaaS developments shape and influence HRIS in the future?

SaaS Trends Making A Mark

While trends are many, my own discussions with companies adopting or evaluating SaaS options have been eye-opening. I’ve brought those discussions here, even though some of them may overlap or dependent on one another. Let’s understand what they mean first.

Vertical SaaS

Vertical SaaS is a trend where all functionality/tools specific to an industry vertical are available in one product suite. Usually, while horizontal SaaS solutions cover a specific business problem (such as invoicing software), vertical SaaS products provide everything related to a specific industry in one suite. Such offerings could also be treated as a collection of relevant modules.

This enables SMBs to derive more from a single solution provider. Such product suites usually include website templates and workflow processes aligned to the given industry, which is generally preferred over customization of a generic horizontal product.

Vertical SaaS also helps providers retain their customers because every additional module enhances the solutions’ capabilities thus increasing revenue possibilities. For example, ServiceTitan – an all-in-one service management software – comes with CRM (customer relationship management), market and business analytics, workflow, invoice and payments, and many other modules. Similarly, the HRIS products have also started becoming more vertical/industry-focused to cater to all possible market needs.

Product Unbundling

At a conceptual level, SaaS started with making end-to-end product functionality available as needed, charging for every use. It is apparent now, that SMBs do not necessarily need an end-to-end product functionality, and there is value in making the functionality modular and making individual modules available for consumption.

Availability of exposed APIs makes such unbundling possible, where users can integrate required modules through the APIs. Multiple HRIS products make modules such as One-on-one, Goal Setting, Feedback, and Rewards individually available, instead of selling them as a bundle. These modules are not very closely coupled with an underlying platform, so they can be integrated with the existing SMB product easily.

Artificial Intelligence

Artificial Intelligence (AI) is a major technology trend dominating this decade. It is, in fact, one of the top SaaS trends for 2020. One of the key shifts in SaaS is its adoption of AI and Machine Learning (ML). The HRIS domain is expanding products with AI and Natural Language Processing (NLP) to offer improved user experience and software capabilities. For instance, improved versions of recruitment software where candidate matching is more accurate due to the use of NLP, or learning portals applying AL/ML to understand a learner’s preferences, learning patterns, and goals while recommending courses, are examples of the use of AI and data analysis.

Exposed API Connections

The availability of APIs for integrations is a trend that has increased the pace of software development many folds. Several portals make their functionality available for use through APIs. Low coding platforms like Salesforce also provide seamless integration with an underlying platform, and other applications available on the platform using exposed APIs.

In addition, building connectors using exposed APIs so that any two applications in the HRIS domain (for example, a recruiting platform and a background check software) can exchange information seamlessly, is a popular development trend in the HRIS domain.

Micro SaaS and Product Positioning

One last trend worth mentioning here is Micro SaaS. With the explosion of SaaS products, small businesses have started offering a multitude of even smaller products. These products are usually in the form of small tools augmenting a larger suite of products via extensions or add-ons. Many times, the target products for such Micro SaaS tools are the ones that serve the niche industry need. For example, in the highly competitive CMS (content management system) industry, a Micro SaaS product will work with the established CMS giants like WordPress and Joomla, in the form of extensions like Grammarly.

What I find interesting in these trends is how closely they overlap. For example, Product Unbundling, which is one of the important trends, could be considered as the first step of Vertical SaaS, which is in fact the top trending one. Also, all the trends will need/benefit from exposed API connections. A challenge worth mentioning and considering, if you are considering adopting any of these, would be SaaS product churn and SaaS waste.  Tons of new products come up every year providing a choice to the consumers to shift to newer and better alternatives. This typically results in orphaned or duplicate products and services. I feel, in this context, the technology trends described above will help us get a better perspective on the future of SaaS product landscape.

SaaS solutions, particularly in the realm of HRIS, offer simple and cost-effective ways to update products and custom solutions too. More useful is the fact that these solutions are updated by the providers themselves, saving companies considerable costs and time that would be needed to host an on-premise solution.

Looking at the trends this year, I think it is hard to ignore how SaaS-HRIS solutions look more adaptable, flexible, and promising to deal with future challenges.

It would be great to know your thoughts on this, too. Do write back on



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