Survey Finds That HR Tech Spending May be Increasing This Year

Even if American businesses are wary about the pace of the economic recovery, they do seem to be relatively willing to invest in their organization’s infrastructure — especially on technology.

According to the 14th annual HR Service Delivery Survey from Towers Watson, more than one-third of respondents (34 percent) said they’re planning to spend more on HR technology  in 2011, with one in eight expecting that increase to exceed 20 percent over last year. Only 16 percent plan to reduce their spending on HR technology.

Streamlining processes and systems a key goal

“We haven’t seen this level of increase in investment in HR technology since before the economic downturn,” said Tom Keebler, global leader of Towers Watson’s HR Service Delivery and Technology practices, in a press release about the survey. “The fact that technology spending is up this year is a clear indication of the high level of return that companies are seeing when it comes to technology as a means for improving both HR efficiency and effectiveness,” he said.

As you might imagine, increased spending on HR technology also means an increased focus on it too, and the Towers Watson survey found that 41 percent of the 444 companies they surveyed said that talent and performance systems were one of their top three HR service delivery issues for 2011. Streamlining HR processes and systems was listed by 27 percent of the respondents, while 25 percent cited greater involvement in strategic business-driven issues as the other top three HR service delivery issues for this year.

“As the economy continues to improve, the need for robust talent and performance management programs and enabling technologies has never been greater,” Keebler said. “Companies view talent and performance management technologies as a critical component of their workforce attraction and retention initiatives, and also as a way to enhance HR’s role in helping the business to meet its strategic goals.”

More HR organizations using Web 2.0 tools

Some other key findings from the survey:

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  • Reengineering key HR processes is by far the top HR initiative that respondents are currently undertaking or planning for this year, with 62 percent citing it as their major focus.
  • The second most reported initiative (43 percent) for 2011 is refocusing the role of their HR business partners, while more than one-third of respondents (37 percent) say their primary focus is on implementing or leveraging self-service technologies.
  • Respondents that have recently completed these initiatives are reporting tremendous success, including 84 percent that say process reengineering met or exceeded expectations, and 81 percent that say that their recent self-service initiatives have delivered on or exceeded their expectations.
  • HR organizations are using Web 2.0 tools most frequently for recruiting (43 percent), HR communication (38 percent), and training (25 percent).
  • More than three-fourths (77 percent) of the surveyed companies either have or are working on implementing a global data warehouse to consolidate information fed from separate systems.
  • Manager and/or employee self-service (MSS/ESS) is in place at nearly eight in 10 (79 percent) of U.S. respondents.

The 14th annual HR Service Delivery Survey polled HR and HRIT executives from 444 organizations for their insight on topics and trends impacting the year ahead. Some 42 percent consider themselves multinational/global companies, while 57 percent of respondents have more than 5,000 employees

Although the full survey won’t be available from Towers Watson until next month, this does show once again that organizations are willing to invest and spend money, just not necessarily on hiring new people. They will plunk down money on technology and systems, but continue to hold back when it comes to expanding staffs or adding people.

This is part of the restructuring of the economy that we have seen going on through the recession and now as we limp along with the tepid recovery. And since very few employers seem to be rushing to expand their staffs, the likelihood is that this is going to be how it continues to go for some time to come.

John Hollon is Editor-at-Large at ERE Media and was the founding Editor of TLNT.com. A longtime newspaper, magazine, and business journal editor, John has deep roots in the talent management space. He's the former Editor of Workforce Management magazine and workforce.com, served as Editor of RecruitingDaily, and was Vice President for Content at HR technology firm Checkster. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices, including for the popular Fistful of Talent blog. Contact him at johnhollon@ere.net, connect with him on LinkedIn, or follow him on Twitter @johnhollon.

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