George LaRocque is a renowned expert in the field of work technology. As the founder of WorkTech and a seasoned analyst, LaRocque is at the forefront of tracking and advising on the explosive growth of work technology. We spoke to him extensively about the rise of AI in work technology and the state of WorkTech investments in 2023 and beyond. Listen to the podcast or watch the full video interview.
The state of WorkTech in 2023
It’s not been quiet for a long time within the world of Work Technology. With WorkTech, founder George LaRocque aims to help HR leaders that use and buy HR technology and HR tech providers to understand each other. The company was founded in 2009, and since then, LaRocque’s company has excelled at helping employers understand the trends that are impacting their workforce today and in the future.
WorkTech’s reports have become industry-standard for tracking everything that happens as far as developments and investments go. So how’s 2023 shaping up so far? “We’re on track to possibly be the third biggest year in work tech investment”, LaRocque says. “And there’s still a lot of adoption, a lot of innovation happening.”
‘Hesitancy is a common theme’
But, as LaRocque puts it, 2023 doesn’t have the same record-breaking vibe to it compared to the last three, record-breaking-, years. “Budgets are still being deployed, but everything’s taking longer. It’s taking longer to raise. We see it’s taking longer, too, to buy or sell software. Hesitancy is a common theme, but depending on where you’re located, what industry you’re in or you’re supporting: you could be having another best year ever — or you could be struggling.”
“The level of investment seems much more in line with the years before the unique boom years.”
“Valuations have certainly come back down to earth”, LaRocque continues. “So we were seeing companies valued at astronomical amounts through 2021 and 2022. And now we’re seeing companies valued and where they might have been, pre-2019 and previous years, when it comes to the the market. The level of investment seems much more in line with the years before the unique boom years.”
From back-end to massive exposure
If you’ve not opened up any (of the many) pop-ups or news bulletins, you may have missed the fact that AI is everywhere. For HR and recruitment — and particularly the technology side — it had been there for years. It just wasn’t being talked about, says LaRocque. “AI and machine learning was in the market in our market for years, but it was something that you didn’t want to talk about with leaders. Because it was like a black-box. They were concepts that were very technical and many providers were leveraging it on the back end to provide a better experience.”
Then ChatGPT happened. “Suddenly, users of technology in every market, including ours, became exposed to the possibilities and became more comfortable with the experience, using specifically generative AI and the concept of large language models. Every business leader started looking at it. If automation could help with certain inefficiencies, it could be helpful.”
Ramifications of AI in tech
But that’s not all, says LaRocque. “It’s also opened up the conversation for other forms of AI. In analytics, matching or other skills-based technologies that more on the back-end. But if anything, it’s just opened the world up to these conversations with more comfort level and also opened us up to conversations around ethics, privacy and security.”
“Maybe I’m a pessimist, but I think a lot of folks ran out of ideas, and implemented AI-abilities to write an e-mail or edit a document. That’s essentially what ChatGPT or Google Bard can already do.”
There lies a danger in just introducing AI into any given tool. “I see a lot of tools that are just taking the low-hanging fruit. Maybe I’m a pessimist, but I think a lot of folks ran out of ideas, and implemented AI-abilities to write an e-mail or edit a document. That’s essentially what ChatGPT or Google Bard can already do. And they’ve implemented it without a real focus on what impact it is going to have or what kind of content is being communicated.”
“If I’m putting a compensation plan in that tool and it hasn’t been implemented properly, is that forming an output for the next user somewhere in the world to benefit from?”
LaRocque says it’s important to think about the ramifications of embedding AI into tooling. “If I’m putting a job ad into an editor like that, that’s okay, because I’m going to publish that to the world anyhow. But if I’m putting a compensation plan in that tool and it hasn’t been implemented properly, is that forming an output for the next user somewhere in the world to benefit from? These are things that that are a little scary and that users need to get used to asking about.”
The AI adoption curve
Moreover, the adoption curve may prove to be an issue. “Normally I would say the adoption curve on something new in HR Tech has taken, anywhere from 5 to 10 years before we would go through iterations. And before we really understand how it’s going to be adopted and used. This looks more like 2 to 5, because we’re seeing incredible use cases right out of the gate. And because AI is not new to us, there was some foundational work done that can now be taken to a whole new level by existing and new tech players. And every customer, every business leader is wondering how they can leverage this technology.”
Want to hear more from George LaRocque?
Listen to the full interview below to hear the rest of the conversation between Jasper Spanjaart and George LaRocque. In the episode, LaRocque delves into start-ups that have caught his eye and he shares further predictions on all things work technology for 2024 and beyond.