HR Departments Expect Increased Technology Spend This Year

Budget Dollars

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Pandemic or no, most HR departments expect their budgets to increase this year, with much of the money going toward technology rather than benefits, recruitment or engagement.

Specifically, technology is the top use of additional funds, cited by 50% of the HR professionals responding to this year’s Paychex Pulse of HR survey. Forty-four percent cited benefits, while recruiting and engagement were identified by 43% each.

#HR departments expect bigger budgets this year; at least half the money's going into technology. #HRTech @Paychex Share on X

The need for technology is a logical correlation with a decline in manual processes. Put another way, HR is completing fewer chores by hand. Rekeying of information dropped by 60% from 2019, for example, while time spent manually merging data fell by 40%.

Self-service tools play a role here, as well. Most HR leaders—79%—believe apps or portals are important tools for meeting workforce needs and freeing HR staff from processing time-off requests, information updates or similar tasks.

What Are Analytics For?

The use of analytics has continued to increase, Paychex said. Almost all HR professionals—97%—said they rely on analytics in their work, up from 90% in 2017. Eighty-eight percent use data to make more informed business decisions, while 84% use it to benchmark their organization against others.

The use of analytics breaks down like this:

  • Provide an objective view of the workforce – 91%
  • Make more informed decisions – 88%
  • Justify decisions to senior management – 87%
  • Track employee benefits, time off, and training – 87%
  • Benchmark data against other organizations – 84%
  • Understand how to communicate with employees – 83%

Pandemic Shifts Priorities

Not surprisingly, the Covid-19 pandemic has shifted HR’s priorities this year, with regulatory compliance becoming the top concern, said Paychex. About 36% of practitioners said keeping track of regulations is now their biggest challenge.

Meanwhile, 79% said managing their company’s Covid-19 response has made 2020 exceptionally difficult. In that regard, their most significant concerns are:

  • Keeping employees motivated and engaged: 56%
  • Keeping employees informed: 56%
  • Managing employee stress: 51%
  • Managing the expense of employee pay and benefits: 41%
  • Providing technology to keep employees productive: 40%
  • Providing employee training: 39%

Amidst all this, HR executives say they continue to need help from third parties, especially in HR strategy, talent acquisition, regulatory/compliance issues and risk mitigation/risk management.  

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