Employers Will Spend More on HR Tech, But Don’t Align on What Works

Tech Bench

While nearly three-quarters of employers plan to increase their spending on HR technology during 2020, corporate leaders and managers differ on where workforce tools offer the most value.

PwC said 74 percent of the organizations involved in this year’s HR Technology Survey will spend more on HR tech this year. While they’re shopping, they’re always looking for new options. The survey said most will consider “any number of vendors” to address issues, and the rise of industry startups is making that easier to do.

Most employers will spend more on #HRTech this year, and they're open to new alternatives and new vendors. @PwC #HR #HRTribe Click To Tweet

And, in fact, fully half of the respondents already buy from multiple vendors. Over the next three years, 39 percent plan to increase the number of vendors they use, up from 20 percent two years ago. That rise suggests first-mover vendors with the right solutions will receptive ears as they come to market.

When it comes to priorities, 49 percent of companies intend to make new investments in talent acquisition, while 48 percent will spend more on user experience and 46 percent on skills mapping and career path tools.

Roughly speaking, that aligns with what employers regard as their most vexing problems. More than half—58 percent–said that finding, attracting and retaining talent was their primary concern. Forty-three percent said theirs was developing talent, while 42 percent cited the need to improve the employee experience.

Effective HR Technology?

Just how effective technology is depends on where people sit. Managers who have to use tools that require a partnership with the business are two times less likely than C-level executives to believe technology effectively impacts business outcomes. That suggests corporate leaders are paying more attention to implementation schedules and budgets than they are effective transformation, PwC said.  

Some examples of this disconnect:

  • Fifty percent of executives believe HR technology increases efficiency and productivity, compared to 22 percent of managers.
  • Forty-five percent of executives believe tech helps the employee experience, compared to 23 percent of managers.
  • Forty-three percent of leaders say technology helps their organization attract and retain talent, compared to 13 percent of managers.

Another challenge is adoption, and here the challenge may have to do with companies’ strategies for encouraging it. Most employers—82 percent—say they struggle with adoption, but only 27 percent believe HR technology’s very effective when it comes to changing behaviors at work. And while 48 percent believe gamification could increase adoption, only 20 percent use it. Similarly, 52 percent believe incentives could help, but just 30 percent use them.

“Gamification and incentives, along with training and stakeholder commitment can go a long way toward convincing skeptics to get on board,” the report said. “You don’t have to change your culture, instead use your culture to strengthen your change management plan.”

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