HR budgets took a hit in 2020, but innovation did not.
The shift to remote work is accelerating new tech trends in HR, namely by giving productivity platforms such as Microsoft Teams and Workplace from Facebook a bigger role to play. These platforms are also becoming the top layer or front end of an HR integration stack; employees will increasingly access human capital systems through them. That was one of the themes at this week's HR Technology Conference & Expo.
But first, there's no getting around the fact that this has been a rough year for HR budgets, according to the latest Sierra-Cedar/Sapient Insights HR Systems Survey, which was released at the conference.
"There is definitely a lot of focus on cost cutting," said Stacey Harris, chief research officer at Sapient Insights Group.
Of the 1,900 organizations that participated in the annual survey, only 30% plan to increase their HR technology spending this year compared to 42% last year. "That's big," Harris said of the finding.
About 15% of the organizations surveyed are decreasing their HR tech spending. Last year, only 4% of organizations reported a decrease in HR tech spend, and Harris said there hasn't been a budget decrease over 7% in more than five years. The reductions and the cutbacks are the direct result of the COVID-19 pandemic, she said.
The big tech trends in HR
Beyond a dip in HR tech spend, the pandemic may be accelerating other tech trends in HR this year.
"HR, itself, has turned into a much more innovative, adaptable part of a company," said Josh Bersin, an industry analyst and head of Josh Bersin Academy, during his keynote talk at the HR tech conference.
Josh BersinIndustry analyst, head of Josh Bersin Academy
"The big story about technology is we're consuming a lot of it," Bersin said. "Most of the tech vendors are growing."
HR tech is shifting to something Bersin called "work tech" -- an integrated part of productivity platforms such as Microsoft Teams, Workplace from Facebook, Zoom, Webex, ServiceNow and so on.
Firms are layering platform tools like these on top of human capital systems to make them more flexible and more productive for people, Bersin said.
Bersin cited Microsoft and Facebook as two vendors leading the shift.
Workplace from Facebook "is not only a collaboration and communication system, but really an application platform for delivering employee surveys, training, communications, document management and all the things we need to do in HR," Bersin said.
Bersin also cited ServiceNow for its configurable workflow systems and knowledge management, or a resource for information and problem solving, that sit on top of these core HR applications.
HR vendors will have to integrate with these systems, and HR tech buyers will probably need to look at these productivity platforms as HR's "front end," Bersin said.