Here’s how COVID-19 is impacting HR tech spend
Among the many headline-makers at Tuesday’s HR Tech Conference was the public debut of the Sierra-Cedar/Sapient Insights HR Systems Survey. Now in its 23rd year, the research—unveiled by Sapient Insights Group Chief Research Officer Stacey Harris—featured a deep dive into HR tech trends, with responses from more than 1,900 individual organizations.
In a year filled with unknowns and uncertainties, the report shed light on the tangible actions employers are taking in response to the pandemic and other industry shifts, as well as highlighted the direction that HR systems investments are moving.
Notably, researchers found a 27% decrease in expected expenditures for HR technology spending this year. “That’s a wow,” Harris noted. About 30% of organizations had plans to increase spending in the coming year, compared to 42% in 2019. The number of companies planning to decrease their HR tech budgets for the next year jumped from 4% to 15%, compared to this time last year. Harris noted that researchers hadn’t seen that figure climb above 7% in a number of years. The budget slashes are expected to most commonly affect planned expansion of talent management tools, HRIS upgrades, and analytics and other emerging technology initiatives.
Unsurprisingly, 78% of respondents who anticipated decreases said they were prompted by the COVID-19 pandemic.
In addition to spending trends, the report also examined correlations among HR and business outcomes, particularly in how employers have responded to the pandemic—finding that organizations that are thriving through the pandemic have several talent strategies in common.
The top five talent responses to the pandemic from the survey respondents were: redistribution of critical members of the workforce, postponing HR-related special projects, temporarily furloughing workers, reducing or eliminating contract workers and increasing HR tech spend on infrastructure.
There was a clear difference in how organizations with high business outcomes versus those with low ones addressed the management crisis of the pandemic, Harris noted.
“If you have good talent outcomes, you’re going to have good business outcomes.” – Stacey Harris
Higher-outcome organizations were much more strategic and focused on moving forward: They increased salaries for those in essential roles, rapidly hired essential workers, increased tech infrastructure spend and redistributed workers. Lower-outcome organizations, meanwhile, reduced management and executive salaries, eliminated contract workers, laid off employees and furloughed workers.
“They were quickly making decisions that had long-term impacts on their organizations. And probably not always a good one,” Harris said.
“If you have good talent outcomes,” she added, “you’re going to have good business outcomes.”
Looking ahead, the study found that organizations are planning to tackle pandemic-related impacts through talent strategies like employee tracking, better communication methods, pay flexibility, new team-working structures, social distance policies and remote work—more than one-third of employers involved in the survey planned to expand remote-work capabilities once the pandemic is entirely behind us.
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All of these will be reliant on tech, she added, noting that a continuous change-management approach when it comes to HR tech—applied to everything from systems strategy to tech selection to vendor relationship—is linked to better talent and business outcomes.
“No longer can we just talk about project-based change management. No longer can we think about it just when we implement something,” Harris said. “We have to think about this conversation all the way through the continuous lifecycle of our HR tech environment.”
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