Why COVID-19 will drive greater spending on HR systems

In an HR Tech exclusive, Sapient Insights is giving attendees a preview of its 2021-2022 AnnualHR Systems Survey of HR technology customers. Sapient Chief Research Officer Stacey Harris will share the Voice of the Customer data during a Thursday session at the HR Technology Conference, happening this week in Las Vegas. The report is based on data from more than 20,000 organizations around the world, and covers vendor satisfaction, user experience ratings, adoption strategies and urgent challenges. Before her session, HRE asked Harris to explain the context behind her team’s findings. 

In terms of the rate of investment in HR systems, Sapient found that organizations’ tech spending is up by 57% from last year, with a major focus on learning, recruiting, HR analytics, benefits and wellness, and skills management.

Related: 3 reasons you need to care about emerging HR tech

The global COVID-19 pandemic and the subsequent lockdowns and shift to remote work mandates drove these figures, says Harris.

Stacey Harris of Sapient Insights

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“We definitely know [employers] spent a lot more money on setting up virtual private networks and training. It’s an interesting perspective on where they thought their spending was going to be and what they really spent money on,” she says. “This year, the 57% increase is all about the uptick from last year and they are saying, ‘Now, we’re going to spend on true HR technology at this point.’” 

When it comes to skills management, 23% of organizations currently deploy a formal application for managing skills and 14% of organizations plan to purchase a new application in the next 12 to 24 months. Meanwhile, 26% of organizations are evaluating their current needs. No other application had adoption plan numbers as high as skills management, says Harris.  

There is a need for new skills in general because the work itself has changed, and we know that’s a big part of the conversation,” she says. “This Great Resignation is a hiring challenge. As employees rethink what they want out of their work environments and decide whether or not they’re going to leave or be hired into an organization, they’re expecting that the organizations are going to develop them into areas they want to pursue.”

Going hybrid and not looking back

Another key finding from the report is that the hybrid work environment is here to stay, with 50% of organizations stating that at least half of their workforce currently operate in remote work environments. That said, coming back to a workplace is the goal for more than 70% of organizations. For some organizations, there is a driving reason for continuing work-from-home options, along with safety and health concerns, she says. Learning tools continue to be the leading candidates to be replaced or evaluated for replacement, followed closely by HR service delivery applications such as help desks, portals, feedback tools and more. 

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“Hybrid work environments are going to become a competitive advantage for all organizations, particularly those headquartered outside of the United States,” she says. 

Overall, Sapient found that businesses were happier with their HR applications this year but are now looking for increased value from their vendor relationships. Organizations that offered support and managed services did much better in overall vendor satisfaction ratings. User experience scores were up, but so too were the percentage of organizations that felt they needed more customization options. 

Harris says there are two factors at work here. For the last 18 months, organizations found that their technology solutions and their technology vendors played a major role in their ability to move forward in managing employees through the pandemic. 

“There is a much more general understanding that HR technology was adding more value than [organizations] may have given it credit for,” she says.

The other factor is that HR tech satisfaction appears to be tied to the size of the organization, as very small companies generally tended to be happier with their HR technology, “They’re just not as complex. They don’t have as many complex names,” she says. 

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