In 2015, HR practitioners spent more on new technology compared with the previous year, according to a survey by the Human Capital Media Advisory Group. A separate report found that large companies spend the most on technology at almost 10 percent of their HR budget. This increased spending on HR technology has fueled a huge market growth in cloud-based HR technologies. According to one report, the entire HR software market is over $10B in size, with many segments growing at double-digit rates.
A survey by Towers Watson found that more companies are increasing their use of SaaS (Software-as-a-Service), along with adopting more mobile technologies and HR portals. Approximately 46 percent of respondents reported using mobile technologies for HR transactions, an increase from 36 percent in the previous year. Additionally, 60 percent of employers have an HR portal in place and 20 percent are in the process of developing a portal.
HR Tech Companies
A survey by Sierra-Cedar, unveiled at the 18th Annual HR Technology Conference and Exposition in October 2015, indicated that HR technology vendors are innovating more than before and finding investment funding and demand as HR leaders are buying and installing systems rapidly, particularly at smaller and mid-sized companies.
Over the past year, there has been an almost 30 percent average jump in core HRMS in the cloud. However, the talent acquisition arena is where most venture capital funding is focused. Over the last few years, there has been an explosion of new tools and technology in the market to support the industry, with the most highly adopted ones in referrals, branding, and assessment technology.
What Kinds of Technologies?
The Human Capital Media Advisory Group survey revealed insight into the eight different categories of HR software types and where HR practitioners are investing their money. Among these categories, mobile garnered the highest response, while the software that the most subjects said they plan to invest in concerned onboarding. Nearly 60 percent of respondents said they had no intention of purchasing wellness software.
Kinds of HR Software Currently Used
Source: Human Capital Media Advisory Group
When asked about top motivations for using cloud-based software services, about half of the respondents said that cost saving was their first priority. Other priorities ranked in descending order are accessibility, improved productivity, easier upgrades, data recovery resilience, mobility, scalability, IT security, agility, and increased collaboration. About half of the organizations participating in the survey said that they were satisfied with their HR technology providers, while 20 percent said that they were not.
In terms of deciding factors for bringing in a new HR technology, approximately 43 percent of companies said they value “best fit” as the most important factor, while 17 percent said cost was important, and 15 percent selected data security as their top priority. Additionally, 7 percent chose scalability as their most important factor, and 7 percent said ease of use was the most important deciding factor.
According to the Sierra-Cedar survey, mobile HR increased by 92 percent in the past year, from 13 percent average mobile-enabled HR processes in 2014 to 25 percent in 2015. The report forecasts a 47 percent average for 2016, which means another jump of over 90 percent.
“Despite cost-cutting in some areas of HR, we are seeing a substantial spike in technology spending. Companies are realizing the value that consumer-grade technology brings to HR and are willing to make smart investments that can grow and evolve with the business. It also appears that companies are splitting their investments between core HR systems, such as talent management and payroll, and next-generation technology, including HR data and analytics, and integrated talent management systems.” ~Mike DiClaudio, Global Leader of HR Service Delivery Practice at Towers Watson