What Are HR Tech Buyers Up To?

From the looks of my 2014 IDC survey of more than 500 human resources executives, a lot of talent technology systems purchases are in the offing for the rest of this year  and should continue into 2015.

At least, HR technology buyers are showing growing intentions of buying.

I’ve been conducting this survey since 2012, and the buyer intention numbers are higher than they’ve ever been. Intent to purchase, however, doesn’t always reflect what ultimately gets bought. If I’m an HR buyer, I may intend to invest in an overhaul of everything, but my budget might say I can have just some, or nothing at all.

Nonetheless, looking at intentions of HR tech purchases is still a worthwhile measure, as it shows to what extent HR professionals are willing to invest in technology if money were no object.

The winner in 2014 appears to be technology systems focused on compensation management, followed closely by those focused on performance management.

These two topped the list as most likely first time or replacement purchases. This is the first time compensation has been on the top; it usually falls close to the bottom.

So why has it shot up now? Well, it is the one talent area least penetrated by third-party vendors, so it was bound to pop up from the doldrums at some point as vendors recognized the opportunity in the market. Also, there are more commercially available technology platforms from more vendors than ever before.

Talent suite providers that either didn’t support compensation or offered lip service to it appear to have beefed up those offerings or added it to complete the suite. On the usage side, compensation analysts have seemed reluctant to give up on their highly customized Excel spreadsheets. And on the business functions side, managers have typically had little or nothing in the way of tools for planning and execution.

In the middle between compensation analysts and management sits the HR generalist team, and I believe they’re the ones driving the push to offer more capabilities to their line management business partners.

Following closely behind compensation management is performance management. I don’t think it is coincidental that these two topped the list.

As I pointed out in my August column, of all the talent management functions — recruiting, learning, performance, succession planning and compensation — performance and compensation are the most integrated from an HR process perspective. Despite frequent protestations that compensation is not tied to performance, the two are heavily linked in the real world.

But does this current trend putting these two areas at the top signal anything deeper? Both this year and the year prior, recruiting was much lower in terms of plans for change than had been typical a few years ago. And a year ago, the functions projected for change were those that serve to develop the workforce, signaling a potential move to develop talent over recruiting for it.

If we consider this current pairing in that light, it further underscores the fact that organizations are focused on the current workforce. Much is being written about low employee morale and satisfaction and a healthy appetite to move if the right job is offered.

Once you develop the workforce, the next step in retention is equitable pay. Making sure that whatever amount of discretionary compensation money is available goes to those doing the most — especially in areas considered critical to the company — appears to be high on the minds of those looking to purchase new HR technology.

Even though talent pain points fluctuate in importance over time, such that one or two areas pop up as topmost for technology investment, I want to leave you with my recommendation that you not consider any function in a vacuum. Talent initiatives may dictate a starting point, but always consider the entire talent value chain when mapping out investment plans.

Image courtesy of Wikimedia.