Companies Spending More on HR Technology

By Elyse Samuels

Human resources practitioners are opening up their wallets for new technology. But they’re also heavily scrutinizing the new technologies being offered.

A little more than half of HR practitioners say their companies’ spending on HR technology has grown this year compared with the prior year, according to a survey by the Human Capital Media Advisory Group, the research arm of Talent Management magazine (Figure 1).

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The survey, conducted in March, polled 127 HR professionals from companies of various sizes and industries. About 43 percent of respondents were director level or above, and 85 percent of participating organizations are located in the United States.

Roughly 54 percent of survey participants were from organizations of fewer than 1,000 employees, while 15 percent were from organizations of more than 10,000. Additionally, 40 percent of participating organizations were located in one country and location; 9.2 percent have multiple locations across the globe.

HR practitioners in the survey said they have several different types of technologies at their disposal. With a new and changing market, HR professionals must decide which technologies are worthy of investment.

For example, according to the survey, companies use HR software regarding workforce management, recruiting, learning management, performance management, analytics, compensation management, wellness, succession planning, collaboration, onboarding, workforce planning, talent management and mobile.

The survey shows that 58 percent of HR respondents currently do not have plans to invest in wellness software technology, though 14 percent said they plan to purchase and 27 percent said they already use it.

The second-least popular technology area is succession planning. While more than half of respondents said they do not currently have and have no future plans to invest in succession planning software, about 20 percent already do and 23 percent plan to in the future (Figure 2).

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About 39 percent of companies reported they plan to purchase mobile HR software. Mobile is the area most HR practitioners said they are likely to purchase in the near future, according to the survey. After mobile, 37 percent of respondents said they would purchase talent management suite software, and 31 percent said they plan to use performance management software.

Overall, respondents reported that they found usefulness in most of the technology they use. According to the survey, about half of respondents said HR systems provide data to help them make better talent management decisions.

Many in HR are proficient at using most HR technology. According to the survey, just 23 percent of respondents reported the HR staff at their organization lacks the skills and expertise needed to use these HR technologies effectively, while nearly 77 percent agreed that their staff had the right skills and experience (Figure 3).

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While most HR practitioners surveyed said they weren’t likely to replace, reimplement or upgrade their current core technology system, about a quarter said they were and 13 percent said they were very likely to do so in the next three years (Figure 4).

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Moving forward, many practitioners say their companies are still exploring the idea of implementing more broad-based cloud technology, where data are stored not in a physical server on-site but through an Internet-based system. Benefits include lower costs, easy usage and simple management.

Roughly 28 percent of respondents said they plan to purchase cloud-based software services in the next year, and 30 percent said they were still considering the option.

When asked what the top motivations are for using cloud-based software services, half of respondents said cost savings was their first priority. Priorities were ranked, in descending order, as accessibility, moving on to improved productivity, easier upgrades, data recovery resilience, mobility, scalability, IT security, agility and boosts collaboration.

Overall, HR technology providers are already accomplishing a great deal for their employees. About half of organizations that participated in the survey said they were satisfied with their HR technology providers; just 20 percent said they were not.

Organizations said they consider a variety of factors when looking for an HR technology vendor.

Roughly 43 percent of companies said they value “best fit” as the most important factor in the decision-making process, 17 percent said cost was the most important factor, and 15 percent chose data security as their top priority, according to the survey.

Additionally, 7 percent chose scalability as their top characteristic, and 7 percent said ease of use was their most important deciding factor.

Reprinted from Talent Management magazine

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