Employers drop the ball on HR tech investments
Though employers continue to invest in HR technology, they're not making the most of their investments.
Employers continue to make investments in technology, according to a recent pulse survey from Gallagher, but few are investing strategically. A sizable group aren’t even using the full extent of their tech capabilities.
“We were not surprised at the level of the ongoing investment in HR technology,” Rhonda Marcucci, HR & Benefits Technology practice leader at Gallagher, said in a statement. “HR tech applications is driving market growth with innovative new tools coming onto the market every day.”
Related: Embracing change: How the HR role is evolving, and how to adapt
However, Marcucci noted that companies have focused their HR tech investments on automation, not on ways to support their workforce. Gallagher found 82% of investments were to automate processes, compared to just over half that aligned with strategic goals.
“Capital investors and tech providers are thinking more strategically than many employers. The market solved for automation years ago, but employers, especially those with less than 500 employees, have been slow to catch up,” Marcucci said.
Gallagher’s 2020 benchmarking report, released earlier this year, found 85% of employers don’t have a comprehensive strategy that aligns their tech investments with their organizational strategy. Nearly 40% say they can’t get executives on board with tech strategies.
That may explain why so few employers use the full power of their technology. Only 29% say they use more than 75% of their tools’ capabilities, and most — 40% — aren’t even using half of what’s available to them. More than half of employers don’t have any established processes for integrating tech tools into their human capital strategy, the survey found.
“All employers need to look beyond automation and focus on how new or optimized existing technologies can support their people strategy and deliver on big organizational goals,” Marcucci said. “Formal processes are needed to effectively govern both strategy and vendor relationships, to monitor and deploy new software releases. Committing the effort required to maximize your investment value is worthwhile as it opens a full range of possibilities for increasing HR tech’s value to the organization.”
The 2020 HR Technology Pulse Survey polled over 400 U.S. firms in between May 21 and July 3. Respondents included public and private companies in the nonprofit and for-profit sectors, across 20 industries.
Here’s what’s working for employers:
- 90% of employers say they’ve used tech to support their workers’ well-being during the pandemic.
- Administrative tools have been the most valuable, including payroll (59%), time keeping (48%) and mobile access (37%).
- Mobile apps (53%), SMS text capabilities (51%) and a mobile-responsive website (49%) are the most popular mobile tools used by HR leaders.
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