Robust Spending on HR Systems to Continue

Investing in core technology is becoming the primary human resources service delivery priority, survey says.
Matthew HellerJune 16, 2015
Robust Spending on HR Systems to Continue

Nearly nine in 10 human resources executives plan to spend the same amount or more on HR technology and systems this year compared with 2014, a new survey from Towers Watson found.

Technology spending is typically rising in place of other HR priorities, the professional services firm said, and organizations are replacing their core HR management systems more frequently than ever before — every three to five years versus every five to seven years historically. Thirty percent of survey respondents said they will replace their core HR systems this year.

“Modernizing core HR technology is emerging as the primary HR service delivery priority,” said Mike DiClaudio, global leader of Towers Watson’s HR service delivery practice. “While in the past, companies have mostly invested in secondary technology for talent, compensation, and performance management, there has been a dramatic shift to investing in core HR systems.”

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Many organizations, he noted, are now looking at cloud-based platforms to replace traditional HR platforms and “the changing environment will lead companies to take a closer look at their overall HR technology needs.”

The survey also suggested that employer interest in the use of mobile technologies and HR portal technologies continues to grow. More than six in 10 respondents (61%) plan to use mobile technologies for HR transactions this year, a sharp increase from last year’s 46%. Two-thirds of respondents now have an HR portal in place, up from 60% last year.

However, while 74% of respondents were satisfied with the technology they use for performance management, more than a quarter (28%) are still using paper to perform various HR tasks. Similarly, 79% of those organizations that use technology for global grading/job leveling and core compensation activities say the technology is effective, yet 42% and 47%, respectively, continue to use paper.

“Given the robust technology solutions now available to HR departments, we expect the reliance on software and systems to increase while the use of paper will steadily decline over the next several years,” DiClaudio said.