Companies have been talking about investing in HR technology for a long time. In 1999, the intent was clear, with 100% of this survey’s respondents planning to automate their HR systems (or upgrade their current automated systems). Before moving forward, however, most organizations were waiting for a new generation of technology to emerge that would support a more robust business case.
Fifteen years later, intent has become a reality: investment in HR technology is growing across all industries and geographies and HR technology solutions now exist to meet a wide range of needs and budgets.
HR Technology – From Thought to Action
The most recent evidence of the shift from thought to action is documented in Towers Watson’s 2014 HR Service Delivery and Technology Survey: a global survey of 1,048 companies. This survey found that, even where HR spending is being reduced in other areas, HR technology is flagged for increased spending. In fact, one in three respondents (33%) plan to spend more on HR technology in the coming year, with some respondents expecting that increase to exceed 20%. More importantly, only 15% plan to spend less in HR technology in the coming year as compared to the previous year.
Reasons cited for this increased commitment to HR technology include the more traditional drivers of cost reduction and efficiency; together with a number of emerging drivers, including improved data analytics as a contributor to strategy development, and providing greater accessibility to information via web-based portals and SaaS solutions.
HR Data Contributes to Strategy
Data obtained through effective use of HR technology is increasingly being used to delve into organizational health and to contribute insights toward strategy development. Towers Watson Study, for example, found:
- 63% of respondents regularly conduct engagement surveys and use the data to contribute to strategic people-related investments that impact their business;
- 33% of respondents use the results of these surveys to influence transformation within their organizations; and
- 30% feel they could do even more with this data.
According to Edward Piper of Stoel Rives, LLP, in his review of the White House report entitled, Big Data: Seizing Opportunities, Preserving Values: “For employers, big data collection can have major benefits. It allows employers to assess the characteristics of their workforces in unprecedented detail and detect trends that, until very recently, were analytically invisible. The insights an employer gleans from that analysis may challenge long-held assumptions about the best ways to hire, promote, and fire. For example, which applicants help decrease employee attrition? What perks attract the best talent? What personality traits jive best with my organization’s culture? Big data can offer incisive—and often surprising—answers, which many employers are beginning to use to recalibrate their approach to human resources.”
HR technology is the vehicle which enables companies to gather, analyze and act on HR data and to realize the potential it offers for more insightful and strategic business management. The predictive analytics potential of HR data is a growing motivator for the adoption, expansion and restructuring of HR technology.
SaaS and HR Technology
It’s especially interesting to note the impact SaaS has had on the evolution of HR technology. In 1999, the conversation about HR technology was almost exclusively happening among the largest organizations and revolved around automating payroll and implementing core HRIS functionality. Today, HR technology offers a much broader array of tools to supplement traditional HR information management; from applicant tracking and onboarding tools to performance review automation, real-time feedback and mobile access. In addition to simplifying employee and manager self-service, a feature used by 71% of North American organizations, SaaS has made it possible to offer a full gamut of HR technology options, ranging from single purpose applications to more robust, integrated HCM systems, at a price point smaller companies can afford.
The SaaS landscape has also matured in the past 15 years and now includes some well-established players. While these larger players grow market share, a number of scrappy, innovative startups continue to push the boundaries and hold their own. In fact, some companies in the market for new HR technology prefer to work with these startups. They recognize the limits of HR technology are a long way from being reached, and that some of the most creative ideas are being developed by these agile contenders.
The evidence is in and the message is clear: HR technology has become a “must have” for business. While HR technology will never replace the human in HR, it provides a power-tool for administration, a 24-hour access channel for managers and employees, and a goldmine of insight for leaders.
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 Towers Watson. 2014 HR Service Delivery and Technology Survey. http://www.towerswatson.com/en-US/Insights/IC-Types/Survey-Research-Results/2014/06/2014-hr-service-delivery-and-technology-survey