As I’ve mentioned many times, the HR Technology market is too big and too exciting to ignore. Today, in a bold move, ServiceNow introduced a comprehensive new product for employee skills intelligence, learning, career management, and talent mobility.
Built on the acquisition of Hitch (in June of 2022), this is a world-class platform for all aspects of employee development, mobility, and careers. It competes directly with similar solutions in the market from Workday, Oracle, SuccessFactors, Cornerstone, Gloat, Fuel50, Eightfold, and many others.
When I was first briefed on this offering I had two reactions.
My first was a question: are you sure you want to jump into this complicated red ocean of offerings?
And the answer was a resounding yes: Gretchen Alarcon, Senior Vice President and General Manager, is deeply convinced that ServiceNow can do a better job in this area, largely because of ServiceNow’s deep integrations with other HCM systems, Hitch’s skills intelligence engine, and the company’s already broad set of services for employee support, journeys, surveys, and transitions.
I spent many hours with Kelley Steven-Waiss, the founder of Hitch, and I was convinced she had the knowledge, passion, and energy to pull this together. Coupled with ServiceNow’s massive sales, marketing, and engineering team, they have the opportunity to deliver a next-gen employee career and development solution. Kelly remains at ServiceNow with the new title Vice President and Chief Transformation Officer (Kelly is an ex-CHRO).
Remember that ServiceNow’s strategy is to help manage the end-to-end Employee Experience, including service delivery, IT services, hybrid work services (desk scheduling, resources), onboarding, and employee transitions. This new platform, Employee Growth and Development, extends ServiceNow’s reach into the employee growth, career management, and internal mobility – all part of the employee experience.
My second reaction was that ServiceNow is a “fast follower.” While the company has a lot of investment yet ahead, this product has an integrated vision still missing from the panoply of related products in the market.
What Does ServiceNow’s Offering Include
The new product, titled ServiceNow Employee Growth and Development (EGD), includes many of the features companies want for development and growth.
If you’ve studied employee development and growth systems as long as I have, you know there’s a huge history of these products, each with slightly different functional focus. In total this is a $340 billion market, and includes learning management systems, content, talent marketplace products, and skills intelligence systems.
Early learning management systems (Saba, Plateau, Cornerstone) had career path platforms designed to help regulated and operational staff plan their career and develop and assess their skills. Then came the LXP platforms (Degreed, EdCast, Viva Learning) and these systems enabled employees to search and find courses. They also let managers and L&D leaders set up pathways, curricula, learning groups, and even publish documents and videos to the learning system. (ServiceNow plans to connect to LMS systems, not replace them at this time.)
In the last five years a new breed of tools arrived: the Talent Marketplace. These systems took some of the features from before and leaned toward a new use case: helping employees find jobs, projects, mentors, and assignments to grow. The Talent Marketplace vendors (Gloat, Fuel50, Eightfold, and later Workday and SAP) tapped into a new business dynamic: the need for companies to move and enable people to easily “redeploy themselves” from a low growth job to a high growth one. And these new systems are appearing on RFP’s all over the world.
The learning-centric platforms (LMS, LXP), make up a $4+ billion market already and that space is filled with platforms that fill many learning needs. The talent marketplace segment, which is more like $300-400 Million in size, is growing at 5-times the rate and has the potential to overcome and somewhat subsume learning systems. Even LinkedIn now offers a talent marketplace (available within LinkedIn Learning) and big vendors like SAP are pouring hundreds of millions of investment into these systems.
Under the covers of all this stuff is the fast-growing role of AI. Early learning platforms have rudimentary AI tools to recommend content or courses based on keywords and employee interest. The more advanced systems (Eightfold, Gloat, and Hitch) actually use big-data AI engines to identify employee skills and intelligently match them to new jobs, roles, and careers. And as the AI grows in sophistication, these systems will find and recommend high-potential career paths, new opportunities that leverage adjacent skills, and tell companies lots of strategic information about what skills they have, need, or are losing over time.
Just last week Eightfold launched its Workforce Talent Planning suite which leverages its massive AI database to help companies easily identify trending skills, skills in demand, and develop job and role-level forecasts and plans for transformation and growth. Companies like Gloat and Lightcast are working on similar offerings. (I suggest you listen to my new podcast which dives deep into AI and explains the three generations of AI-based HR Tech solutions.)
So ServiceNow is entering a deep, complex, and very strategic space.
How will they do?
Based on my experience with the company and the team, I’d predict success. This space is complicated and most companies have many single point solutions, none fully integrated. Workday, Oracle, and SAP have visions of making this all work together, but they are missing dozens of features and the market just moves too fast for them to keep up.
As I looked at the product and talked with the team, I walked away with several observations.
First, the design and user experience of ServiceNow EGD is advanced and world-class. The system feels intuitive and brings together this complex problem in a compelling way. And given ServiceNow’s experience as a “platform of platforms,” it will be easy for the company to connect to existing systems (content providers, compliance and career systems, LMSs, etc).
They have advanced features already. ServiceNow includes a manager dashboard (Manager Hub) and career dashboard (Career Hub) designed to facilitate both individual development and manager-led growth. These are important features that drive adoption and enterprise value. Features like onboarding, employee transition management, and custom journeys have also been available for some time, along with a well designed mobile app.
They also enable employees to write and discuss their aspirations, using AI to match their aspirational goals to roles, jobs, and content. This idea has also been pursued by Gloat, Fuel50, and Cornerstone, with some limited success. Over time this feature has lots of potential, as generative AI and NLP can mine this information to better place people into higher and higher value jobs.
And, like an LXP, ServiceNow EGD will let employees browse and search for content.
Is This A New System Of Record? Yes.
Next there will be a discussion about who owns the “system of record.” Most companies hate the fact that employee data is sprinkled all over the place (it’s just a fact of life, folks, but they hate it anyway) so one may ask “why would I take all my important data in Workday or Cornerstone and replicate it into ServiceNow?” This is a debate ServiceNow is going to have to learn to win.
Ultimately, of course, there never has been one “system of record” for employees so the question really is “should we trust our career, learning, and growth data to ServiceNow?” Will they take good care of it and evolve it over time? Companies will do this if the functionality is advanced and the connectivity is strong.
Remember that this is ServiceNow’s core message. The company positions ServiceNow as a “platform of platforms,” integrating all the disparate systems in a company into a single point of support and experience. This position helps ServiceNow convince companies that employee development data is “experience data,” and while it may also be stored in the HCM, ServiceNow may be able to manage the development experience in a more complete and open way.
By the way, there’s an argument to be made that skills data may also end up “federated” across systems. The skills engine used by recruiting, for example, is specially designed for sourcing, selection, name-masking, and other features to remove bias (eliminate college degrees, for example). The skills engine used for learning and career matching may operate differently, so one could argue that companies who use Eightfold or Seekout for recruiting could still justify using ServiceNow for development and growth.
As far as the ERP (Workday, Oracle, SAP), every buyer wants skills data replicated and rationalized into a core system. New vendors like Techwolf and Skyhive are trying to address this, but very few customers have yet accomplished this feat.
How Intelligent Is ServiceNow’s AI?
Third, customers will ask about the AI. How advanced is it? What industries has it been trained on? How well can it infer skills, job titles, and careers in a meaningful way?
We know, for example, that platforms like Eightfold, Gloat, Beamery, Phenom, and Seekout have amassed billions of employee profiles to infer skills, careers, and potential roles. Now that Hitch is part of ServiceNow, clients will want to evaluate the AI’s depth, industry breadth, explainability, bias-detection, and other features.
Will ServiceNow focus enough energy on AI to match this sophistication? Time will tell. The real win in this space is not the sophistication of the software, but rather the depth, quality, and volume of its data. Eightfold has won huge deals in telecommunications, financial services, energy, the US military, public sector, and pharmaceuticals. That means its skills engine has deep understanding of the jobs, roles, skills, and careers in these industries. Newer vendors like Gloat and Seekout are building similar sophistication in their industries of focus.
Hitch was (is) a brilliantly designed system originally built to run talent at HERE Technologies, a mid-sized mapping company with employees and contractors all over the world. Now as part of ServiceNow, the team has to build integrations with lots of content providers (this is a new area for the company) and develop its skills and development expertise in a broad range of industries. Today, with 6,000+ skills and 150 million profiles, the system is well behind the competition.
I’m bullish nonetheless. Why? This market is massive and many existing players are still immature. Cornerstone’s new skills fabric is just getting rolled out; Workday’s Skills Cloud lacks data and utility in many areas; and vendors like Eightfold, Gloat, and Fuel 50 are simply smaller players in the market. With ServiceNow’s massive customer base and potential users of this system, the company could become a leader if they focus, win some big deals, and continue to invest.
We will be watching them closely, please contact us if you have any questions.
How AI Is Disrupting The HR Tech Marketplace
The Talent Intelligence Primer (download)
The Mad Scramble To Lead The Talent Marketplace Market
SeekOut Brings GPT4 To Recruiters. Eightfold Launches Copilots For HR.
What Is A Neural Network? (Great overview video)