The global HR technology market is estimated to be worth close to $24 billion, with Fortune Business Insights estimating it will rise further to almost $40 billion before the end of the decade.
The advent and wide adoption of technology to support the full spectrum of people management within organisations have revolutionised the way in which employees are managed, rewarded, communicated with, and recruited.
And new data is shining a light on which specific areas of HR tech that people leaders are planning to invest their budgets.
A survey by HR Technologies UK quizzed 51 HRDs from businesses with more than 250 staff and found that the mean investment for HR technology was just under £175,000.
But where is that cash going?
Biggest investment areas
Fifty five percent of HRDs from the survey are planning to allocate their budget into learning and development platforms, whilst 51% said they were eying up money for corporate health, wellbeing and hybrid working-related tech.
This reflects a growing trend over the last decade, accelerating through the pandemic, towards a keen focus on employees’ emotional and physical wellbeing – as well as the near-overnight shift towards remote working.
A growing mountain of research has also highlighted the power of learning and development schemes in the workplace to upskill staff, boost engagement and even reduce employee churn.
Tech challenges for HR
The survey also asked HRDs about their biggest challenges when it came to implementing the right tech.
Almost two in five of those asked said that data analytics and the modernisation of HR systems was their biggest headache, whilst 37% said recruitment and talent management – as well as employee wellbeing – continue to be their main tech challenges.
Just under a third also cited managing remote work as an ongoing challenge – though interestingly this is far lower than might have been expected pre-pandemic, perhaps showing what organisations can do when there is an immediate requirement to make something work.
A generational shift in focus
The final interesting nugget of data from the survey was a look at the challenges that different generations of HRDs face right now.
Younger people leaders, aged up to 34, said their main focus was the modernisation of HR systems – like those inherited from previous incumbents – compared to just 17% of 45-54 year old’s.
HR directors under the age of 44 also cited data analytics as critical, something which none of the respondents over 55 said was an area of focus.
However, two-thirds of all respondents said that HR tech had made a major impact on the sector in the last 10 years from 2022 – especially cloud-based tech and SaaS platforms.
Get help finding the right HR software
This study highlights just how critical HR tech is becoming for the sector, and how budgets are ever-increasing to help facilitate the growing demands of people leaders.
From HR management software to finance and payroll systems, the right technology can help HR departments to achieve more in less time, whilst unleashing broader people-based benefits across an organisation – from improved engagement and people analytics, to better recruitment practices and more accurate payroll management.
At Phase 3, we help organisations to realise the benefits of upgrading to the right HR tech, without the headache of finding and implementing the best solution in the first place.
Our specialist HR, payroll and finance systems experts get to learn your current and future tech requirements, scour the market to locate the best solution, and manage the entire migration and integration process too.
Learn more about our HR implementation services here.