Overall HR tech spending is increasing, according to the results of Sierra-Cedar’s 2018—2019 HR Systems Survey, which was just released today during a session of the HR Technology Conference & Expo in Las Vegas.
Stacey Harris, Sierra-Cedar vice president of research and analytics, says that increase also comes with more value per dollar.
“In other words,” she says, “more modules, more capabilities per dollar spent per employee.”
The challenge with that, she says, is that “we’re also seeing a lot of organizations that are struggling with the skill sets and capabilities inside their companies to use all these assets and tools. So we have a real adoption issue that’s going on in organizations: HR technology outpaces the skill sets of the current technologists or tech roles in many of these organizations.”
In an effort to overcome that issue, the survey found 25 percent of all large organizations plan to add more HR data analytics workers, compared to 17 percent of medium-sized companies and 7 percent of small companies.
Harris says the report also highlights a shift from the focus in HR technology selection and the HR tech itself from the process and practices of HR to a focus on the data that’s required for HR and workforce intelligence.
“And that shift has been pretty a long transition,” she says, “but this year we’re definitely seeing the outcomes of organizations that are starting to make that shift and how they’re changing how they think about their HR systems.”
The 21st annual edition of the survey is the latest research installment of the longest-running research effort in the HR industry. It was conducted from April through June 2018, and is based on 1,312 unique organizations representing a total workforce of 17.7 million employees and contingent workers.
According to the report, only 17 percent of surveyed organizations felt their HR systems “always” met their business needs. But for the other 83 percent of organizations, the No. 1 issue identified across all application areas by almost 50 percent of organizations was configuration and customization limitations, followed by functionality gaps for 44 percent of organizations. Internal knowledge and skills were a major gap identified by 24 percent of organizations, giving vendors and system integrators an opportunity to address issues beyond technology.
As for any surprising results from the report compared to last year, Harris cites a 72 percent increase over last year in the amount of organizations that had a “rip and replace” model in place.
“That shows that if you haven’t made the transition yet or have a strategy yet, you’re behind the curve,” she says. “If you haven’t thought about how to update and upgrade your HR technology in some way, you’re no longer going to be at the head of the pack.”