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Here’s How HR Will Target Its Tech Dollars

A recent poll finds HR tech spend will rise at three in every 10 companies in 2019.
By: | March 27, 2019 • 4 min read
HR tech spend

HRE, producers of the HR Technology Conference, recently conducted a pulse survey of nearly 200 respondents on the topic of HR technology, which found almost one-third (31 percent) of respondents say their HR tech spend will increase in 2019.

This writer asked a trio of HR tech experts—Christa Manning, director of human capital management innovation at Ultimate Software; Stacia Garr, co-founder and principal analyst at RedThread Research; and Kyle Lagunas, research director for emerging trends, talent acquisition and engagement at IDC—to interpret the results.

Manning says the figures reflect the fact that many organizations have been rationalizing their HR and workforce-facing systems as a part of overall digital-technology strategies. At the same time, she adds, there has been a big focus on simplifying and improving the overall employee experience.

“This can mean fewer different systems overall as more and more companies focus on their core-platform provider but may take advantage of new capabilities as they are added on, through ongoing innovation, business growth and ecosystem integrations,” she says.

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Only 16 percent of the repondents, however, say they are anticipating moving to a new core HRIS in the next 12 months, a figure that seems “about right” to Stacia Garr.

Research shows that organizations replace their core HRIS every five to six years, so this number seems appropriate,” she says. “We may have seen higher numbers in the past as organizations ripped out on-premise solutions and moved to the cloud—potentially before the fifth- or sixth-year mark—but the overwhelming number of organizations are now in the cloud.”

Survey respondents were also asked where they would be targeting their HR tech spend in the next 12 months, with the most popular response being “recruiting/onboarding” at 44 percent.

Kyle Lagunas says he’s not at all surprised by recruiting’s high position on HR’s priorities chart.

“Onboarding has proven to be one of the most impactful talent processes—and also something heavily underutilized in the past,” he says, adding that companies are making investments in this application in particular. Meanwhile, CRM systems are quickly becoming one of the most pivotal components of a modern recruiting operation.

“Much of the growth we’re seeing in recruiting technology spend is related to the adoption of these systems—and broader recruitment marketing solutions as well,” Lagunas says.

In one of the more surprising results of the survey, only 13.5 percent of respondents say their organization deploys emerging technologies like AI and machine learning.

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This indicates an overall lack of understanding on HR’s part, says Lagunas.

“They may not be rolling out these capabilities as part of a specific change initiative, but their solution providers are certainly leveraging AI technologies like machine learning/natural language processing/robotics process automation to enhance their offerings and improve [the user experience],” he says. “Maybe the better question isn’t whether companies are deploying, but whether they are adopting it. This is where the rubber meets the road—and where HR has historically struggled to enable systematic improvements to their operations.”

Garr notes that there also have been many well-documented stories of bias showing up within AI, so “many employers are hesitant to move forward until there is broader understanding of how that bias comes to exist and how it can be mitigated.”

Yet despite that low figure of  current AI adoption, nearly 19 percent of those surveyed say their organization is planning to invest in those new technologies. So what does HR need to know before it jumps in?

“HR leaders need to understand where AI is being brought to bear or applied in their HR and workforce-facing systems, what data sets the algorithms have been trained on, and how they are continuously refined and may be adjusted over time to reflect appropriate and desired outcomes,” says Manning. “HR will need to help support people in learning how to best interact with AI-driven systems, as well as more fully develop their own unique skills. But that is what good HR functions have been doing all along—AI is just a new type of tool to support people’s contributions.”

Web Editor Michael J. O’Brien has been with HRE for more than a decade and holds a degree in economics from Boston College. He can be reached at [email protected]

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