Here’s the tech HR leaders want for 2023—but can they really get it?

In the wake of digital transformations that were rapidly accelerated by the COVID-19 pandemic, HR leaders are, understandably, envisioning a heightened role for technology in their people strategies in the coming years. But, for some, budget challenges might keep those HR tech wishlists out of reach.

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That’s according to the results of HRE’s annual What’s Keeping HR Up at Night? survey of more than 500 HR and tech professionals, who shed light on the landscape for HR technology in 2023 and beyond.

For the majority, that includes a focus on the basics: When asked about the most important workforce/HR technology in use, HRIS was cited by 44%, followed by core HR (42%).

This investment aligns with the trends happening in the market, says Steve Boese, chair of HRE‘s annual HR Technology Conference and Exposition, set for Oct. 10-13 in Las Vegas.

“We’ve seen a noticeable increase in innovation in the ‘foundational’ components of the HR technology stack—core HRIS, payroll and benefits administration,” he says. “Human resources organizations have seen that ‘core’ elements of the HR technology stack have a large impact on HR services delivery and can drive an improvement in employee experience.”

For instance, easier access to pay information and shift scheduling have strengthened the EX, particularly for hourly workers, he notes.

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However, HR professionals don’t just want to settle for focusing on the foundation. When it comes to the tools they say their organizations are missing, learning and development topped the list (29%), followed by people analytics (23%).

That such innovation appears to be lacking in many organizations, Boese says, again points to the idea that employers are prioritizing foundational tech.

“Without the core element in place, and providing a foundation of complete, accurate, timely and compliant data and processes, it’s difficult to expand into L&D and more advanced technologies,” he says.

And, HR is particularly challenged by a lack of funding for its technology goals, according to the research, which showed widespread pessimism that tech wishlists will be met because of budgetary concerns. Only 16% said they expected to have the budget this year to meet the need for that missing technology; 40% outright said they wouldn’t and 43% weren’t sure.

That picture may continue to be bleak throughout 2023. In a recent blog post about the state of the HR tech market, industry analyst and HR Tech Conference Virtual keynoter Josh Bersin wrote that he envisions HR tech spending slowing this year. According to the recent Sapient Insights HR Tech Survey, the number of companies polled that are cutting back their HR tech spending jumped from 5% to 8%, and that’s a trend Bersin says will continue—particularly if hiring slows throughout the year.

Despite that, he does predict growth in areas like talent marketplaces and capability academies, as employers prepare to build skills internally. Likewise, in addition to ranking L&D-related tools as the top most-needed tech, nearly a quarter of respondents to HRE’s survey said that, of all of their responsibilities, they were spending the most time on L&D. Additionally, L&D ranked third on respondents’ lists of top challenges, after hiring/retention and improving company culture.

As HR leaders look to L&D to build the skills their workforces need for the future, Boese notes, they should recognize that tech investment must go hand in hand with broader change.

“Shifting an organization’s approach to talent management to a skills-based method requires more than just new technology; it entails heavy lifting to change mindset, processes and even organizational culture,” he says. “I’d caution HR leaders that simply implementing new ‘skills’ HR technologies is just a part of their transformation to becoming a skills-based organization, the technology is just a small part of the overall change journey.”

Learn more about the changing HR tech market at the free, online HR Tech Conference Virtual, Feb. 28-March 2.

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Jen Colletta
Jen Colletta is managing editor at HRE. She earned bachelor's and master's degrees in writing from La Salle University in Philadelphia and spent 10 years as a newspaper reporter and editor before joining HRE. She can be reached at hreletters@lrp.com.

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