Don’t Go Changing…The Dangers of Category Creation

A street sign with directions pointing different ways labeled what, where, who, when , why and how

The HCM technology market is competitive and crowded. Providers are trying to gain market share and expand into new territory. Especially, when customers are increasing their investments and 1 in 5 companies (on average) are looking to replace their existing solutions (Aptitude’s 2016 Hire, Engage and Retain study). Given this state of the market, one trend I have noticed is that many providers are trying to get the buyer’s attention by creating new categories. They are coming up with clever names to describe very mature areas of technology investment or in some cases, inventing something new. Sometimes it makes sense but most of the time, it doesn’t. Does anyone really want to invest in an ”employee awesomeness experience excellence platform”?

You get my point.

Below are a few considerations for any solution provider that is thinking about embarking to the land of Category Creation.

  1. Budget: Does this new category align with HR Technology, workforce management or recruitment budgets? If not, buyers are going to have to build a business case for something they don’t have any idea of what the demonstrated ROI is going to be. That’s no fun and sounds like a recipe for failure.
  2. Confusion: The HCM technology market is already filled with confusion. Most companies are still trying to understand the difference between talent acquisition and talent management. Will a  new category exacerbate this confusion or bring clarity? Too often, new categories leave customers unsure of where this technology fits into the broader HCM landscape.
  3. Product vs. Marketing: There are product providers and then there are marketing providers. Which one are you? If you truly believe in your product and the value it provides, then by all means, create a category. But in many cases, providers are putting a marketing spin on a performance management system, LMS or ATS.

If you are set on category creation, then there are a few success stories that might be worth watching. Recruitment marketing is one example. A few years ago, companies had no idea what a recruitment marketing platform would look like. Today, it is a very well-recognized category thanks to providers such as SmashFly that have not only built a strong product but educated customers on the value. HireVue (video interviewing) and Globoforce (social recognition) are a few examples of other providers that have created awareness for new categories that now align with budgets and provide tremendous value.

Companies have a lot to think about when selecting the right technology. They want simple solutions that will help them do their jobs better and improve business results. Fancy names and new categories will not always help them achieve these goals.

Madeline Laurano

Madeline Laurano

Madeline Laurano is the founder and chief analyst of Aptitude Research. For over 18 years, Madeline’s primary focus has been on the HCM market, specializing in talent acquisition and employee experience. Her work helps companies both validate and re-evaluate their strategies and understand the role technology can play in driving business outcomes. She has watched HCM transform from a back-office function to a strategic company initiative with a focus on partnerships, experience and efficiency.

Before founding Aptitude Research, Madeline held research roles at Aberdeen, Bersin by Deloitte, ERE Media and Brandon Hall Group. She is the co-author of Best Practices in Leading a Global Workforce and is often quoted in leading business publications including The Wall Street Journal, The Boston Globe, Yahoo News, The New York Times and The Financial Times. She is a frequent presenter at industry conferences including the HR Technology Conference and Exposition, SHRM, IHRIM, HCI’s Strategic Talent Acquisition conference, Unleash, GDS International’s HCM Summit, and HRO Today.

In her spare time, she is a runner, an avid sports fan and juggles a house full of boys (where a spontaneous indoor hockey game is not unheard of!).

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