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LAS VEGAS -- With their sights fixed firmly on the cloud, HR managers and IT purchasers are placing greater emphasis on data security, a personalized user experience, and improved learning and development. Those are among the top HR technology trends highlighted in the just-released Sierra-Cedar 2017-2018 HR Systems Survey, which for the first time also attempted to measure the impact of socially responsible policies on corporate bottom lines.
Sierra-Cedar Inc. has made a tradition of unveiling the survey results at the HR Technology Conference & Exposition, and it did so again here at the 2017 annual gathering. The survey celebrated its 20th anniversary this year.
"We're having the same type of change today that we had 20 years ago," said Stacey Harris, vice president of research and analytics for the consulting firm, which is based in Alpharetta, Ga. "The market is flipping on its head."
Harris showed a chart of the top HR technology trends and purchase priorities in the survey's history, noting that the HR automation and employee self-service of the early days are matched by today's cloud, mobile and social HR in their ability to transform organizations.
She said the two-decade evolution in HR technology trends reflects HR's own shift from a focus on its own processes to being more a driver of outcomes for the entire business. "It isn't just about doing HR better," she said. "It's about doing HR for a purpose."
But the practical aspects of delivering HR and talent management improvements remain at the forefront. "Integration strategies and risk and security strategies are roiling to the top," Harris told conference attendees. "If you don't have something going on in [those areas], you're one of the few organizations that we talked to."
Sierra-Cedar conducted the survey of 1,312 organizations last spring. Just over half of them were small organizations (2,500 or fewer employees), with medium-sized organizations (2,500 to 10,000 employees) representing around a quarter of respondents and large organizations (10,000-plus) the remaining quarter.
Social responsibility correlates with HR technology trends
In previous surveys, the consulting firm compared the primary criteria an organization uses to make decisions -- categorizing it as either top-performing in the financial sense, talent-driven or data-driven -- and then measured the effect of that management style on positive business outcomes, such as return on equity.
For this year's survey, social responsibility was added for the first time as a decision-making style. Its impact on business outcomes proved significant.
Sierra-Cedar found organizations that emphasized diversity, wellness, flexible schedules, family leave and employee engagement performed 14% better than a control group. Talent-driven organizations -- those with mature career- and succession-planning processes and which were rated strong in such talent metrics as employee retention and engagement -- also saw a 14% advantage. Organizations that emphasized financial or data-driven decision-making performed 8% and 3% better, respectively.
"Social responsibility has become such a big issue, both in our headlines and in our talking points and in our businesses and in our brands," Harris said. "You can't ignore it. Some organizations are taking it to a whole new level," and technology is helping them to address it.
Other survey data showed the most socially responsible organizations were much more likely to have highly rated HR processes for performance and compensation management and onboarding.
HR technology trends reflected in purchase intentions
A significant portion of the survey deals with respondent's purchase intentions. While all seven major HR technology categories that Sierra-Cedar tracks showed slight growth, the percentage growth over last year was greatest in talent management and in business intelligence and analytics.
One category getting significant attention from purchasers is learning and development tools. The survey report noted that learning management systems (LMSes) are the oldest HR systems -- second only to core HR and payroll -- and have been installed for five years on average.
Stacey Harrisvice president of research and analytics, Sierra-Cedar
"LMSes are being considered for change at a higher rate than other applications today, with 14% of organizations planning for replacement in the next 24 months, and 24% evaluating other solutions," the report said. A better user experience, new functionality and improved integration were by far the top hopes for new LMSes.
The report also found a strong need to integrate the many HR systems and applications that most organizations have. The average organization has 18 integration touch points, though the number varies widely by size, with large organizations averaging 62 touch points and small ones only five. Of survey respondents, 20% had a major initiative to improve system integration, and 10% are working on one, while 17% already have a regularly updated enterprise integration strategy. But that still leaves around half with no real integration strategy, which Sierra-Cedar suggested is a missed opportunity, because organizations that have a strategy earn 21% higher ratings for their business outcomes.
Enterprise integration strategies also proved to be positive contributors in organizations with effective processes to protect HR data privacy and security. In addition, 70% of the organizations in the top tier for business outcomes have a regularly updated risk and security strategy, according to Sierra-Cedar.
The survey also tracked HR technology trends when it comes to the IT architectures that organizations planned to use to transform their HR systems. The results showed 22% planned the rip-and-replace approach, moving everything at once to the cloud, while 25% planned a hybrid setup, with talent management and workforce management typically in the cloud and the rest remaining on premises. Another 22% planned to run similar applications in parallel in both deployment models, while 19% chose to outsource HR to service providers.
The report provided further evidence of the inexorable march to SaaS HR applications and the increased importance of human capital management that is personalized for each employee. "If you haven't talked about personalization yet, make sure you put that in your notes," Harris said. "Personalization is going to be the next big thing."
The 122-page report is free for download after registration and a short questionnaire.
Learn about a prior year's Sierra-Cedar survey
Read why SaaS HR is now dominant
See how Forrester rated learning tools