There’s no question HR technology has exploded and changed the game for employers nationwide. But the transformation is far from complete, according to the Sierra-Cedar 2019–2020 HR Systems Survey White Paper, 22nd Annual Edition. The report was released Wednesday during the HR Technology Conference & Exposition in Las Vegas.
In 2010, just 19% of organizations reported using at least one cloud-based HR application; today, that number is at more than 70%.
“People have completed their big transformation efforts,” says Stacey Harris, vice president of research and analytics at Sierra-Cedar. “If you’re starting now, you’re late in the game.”
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Now that the buy-in for HR tech is nearly complete and widely understood, the next transformation in HR technology is ensuring that employers are continually evaluating and changing their technology to get the most out of it, Harris explains.
“It’s not a technology that can stand still,” she says. “Because you’re dealing with every employee in your company, and the people and practices that run your business, it should be changing on a regular basis. And you should be OK with that.”
Some employers seem to understand that. For example, talent management was one of the first areas in HR that went to the cloud, but about 30% of the market is evaluating or planning to change its primary talent management system or components, Harris says. Further, according to the Sierra-Cedar 2019–2020 Survey White Paper, more than 50% of respondents feel their HRMS and talent management applications have functionality gaps.
Evaluating technologies and understanding their value in an organization and among employees is vital, Harris says. Being willing to make changes to technologies is also essential.
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“It’s what you do inside your company that matters, not the technology. [It’s about] always trying to figure out how to get more people to use it, tracking who’s using it, measuring the outcomes they’re achieving. If you’re not reviewing things every 12 to 18 months … it’s of no value to you.”
Overall, HR professionals continue to invest in technology: 41% of organizations say they will increase spending for HR technologies, according to the report, while 55% say their spending will stay the same. Just 4% say they will decrease their spending.
Small organizations are the fastest-growing segment of new HR technology buyers, but they continue to be the most cautious. With 61% of small organizations on target to simply maintain their existing HR technology spending, HR technology vendors will need to continue to provide economical options with high-value outcomes, according to the Sierra-Cedar 2019–2020 Survey White Paper.
Large organizations saw the greatest change in spending plans from last year, with 52% of organizations planning to increase spending—up from 48% last year. Meanwhile, medium organizations grew their spending plans by 20% last year, but this year, spending plans will hold steady.
What are those companies planning to spend their HR technology dollars on? More than 50% of organizations plan to increase spending in the area of talent management, and 34% plan to increase spending in benefits. Meanwhile, plans to increase spending for core HRMS environments show the investment organizations are still planning to make in this HR technology application area, according to the Sierra-Cedar 2019–2020 Survey White Paper.
“If I’m an HR leader and next year I don’t have something new … employees are going to ask for it,” Harris says.
As the HR technology shift continues, it appears the move is positively changing people’s perceptions of human resource professionals.
The report shows a 20% increase over the last five years in respondents who view HR functions as contributing strategic value (46%) to organizations, with executives 25% more likely than HR directors or managers to view HR as strategic.
“It’s increased a few percentage points every year, and it also increases with the business outcomes increasing. It’s all connected,” Harris says.
“[HR professionals] have more data at their fingertips than they’ve ever had previously, so they have to take ownership of that data,” she explains. “They have to take ownership of that role that the technology is playing inside the company and not think of it as just a features and function tool and think of it much more as a tool used for data management to run their business—and their business is the employees of the company.”