HR tech spending spikes alongside automation

No single piece of HR technology can solve all workplace woes. However, they can certainly help.

As a result of HR technology’s ability to ease increasing workloads and lead to a better employee experience, the area is being heavily invested in.

In fact, HR tech spending will increase by more than 9% this year according to strategic consultancy, The Hackett Group.

When conducting the study, Hackett spoke to HR and business leaders at 250 midsize and large firms globally, to uncover spending trends and disruptors to watch out for in 2022.

HR tech investments

A 9% increase on 2021, a year that saw record spending, is a significant sum. However, there are many reasons why HR tech is a smart investment.

Firstly, those surveyed do not intend to hire more HR staff. This may well be because of the increasingly competitive labor market and the staffing strains caused by the ‘Great Resignation‘.

HR tech can be used to automate tasks, save the time of remaining workers, and ultimately decrease the need for a larger team.

With this in mind, it is no wonder that investments in robotic process automation (RPA) and chatbots are on the rise.

Franco Girimonte, North American HR executive advisory practice leader at The Hackett Group, told TechTarget that RPA and chatbots “can take a huge amount of the workload off HR’s shoulders if you get those systems set up properly“.

In terms of areas which HR technology will address, the study found a desire to embed greater agility into HR service delivery model in 71% of respondents, followed by improving HR performance and value measurement capability (67%).

Despite a desire to automate more tasks, the study found that “47% of organizations [are] falling short of realizing their business objectives for this technology”. Nonetheless, the majority of businesses are happy with their HCM systems.

Moving HR forward in 2022

Making the most of an investment is imperative for any organization and Hackett offers four pieces of advice to help guide companies in their HR projects.

The study recommends “doubling down on digital transformation“, which is understandable given the persistence of the pandemic and the permanent changes to the world of work that have occurred.

However, The Hackett Group study also does encourage rigorous analysis before investing in technologies.

Additionally, companies should look to “virtualize HR service delivery” as the working world becomes increasingly digital. With these investments in technology, the study also recommends: “developing strategies to minimize the impact of structural talent shortages.”

Finally, the study notes that businesses need to “put the customer – employees, managers, and candidates – at the center of service design.” This may seem like an obvious point, but the need to focus on an employee has been highlighted by millions leaving the workforce.

Furthermore, it’s important to remember who HR technology serves, rather than seeing it purely as a solution to hiring more staff.