While economic uncertainty and tight budgets prompt companies to lay off employees or reduce technology spending, savvy HR and learning leaders know this isn’t the best course of action — at least not as a definitive solution. Increasing your organization’s HR technology budget, in particular, may be a better solution to realize valuable cost and time savings and performance and productivity gains in the years ahead.
As virtually every leadership team and Board’s lists of responsibilities expand, prevailing talent shortages and interconnected business risks remain top-line challenges that need to be addressed sooner rather than later. Further, companies should reconsider taking an overly cautious stance in their recession response.
For instance, defaulting to mass layoffs could backfire should the economy rebound quickly. In almost any response scenario, recovery should remain top of mind. So, it’s critical that Boards first weigh the impact of recession responses on company culture — particularly where human capital management (HCM) is concerned — and talent retention and leadership gaps.
Why increase investment in HR technologies?
According to Softwarepath’s 2022 HRIS report, 98% of businesses plan to use a cloud-based human resources information system (HRIS). This planned increase in HR technology investment has become a top priority in 2023 to address key issues around:
- Diminished employee well-being: As more virtual or hybrid teams struggle to balance work and home life, having decreased in-person contact and a reduced sense of belonging, their overall well-being can diminish.
- Escalating talent shortages: With so many employees feeling burnout, less job satisfaction, and apprehension about the job market, many will continue seeking flexible work options in 2023. This will continue to fuel the talent shortages many companies are already experiencing.
- Growing leadership gaps: Leaders, especially new managers, struggle with being stretched beyond their limits. They are falling short of their responsibilities because they lack the leadership capabilities needed to be effective. This prompts them to rethink their career options, expanding already large leadership gaps.
- Poor digital employee experience: Employee experience in a digital environment has become critical. Without people-centric HR technology, digital employee experience at all levels can suffer, negatively impacting productivity, engagement, and talent retention rates.
There is an interesting dynamic emerging between forward-thinking Chief Information Officers (CIOs) and Chief Human Resource Officers (CHROs) that impact how organizations will address these issues — especially the digital employee experience — going forward. While these two leaders don’t typically collaborate on joint initiatives, they’re starting to recognize the value in partnering to improve communication, collaboration, and connection in a hybrid or remote environment. Their partnership is focused on understanding gaps in employee digital experience, how to take action, and how to use HR technology to facilitate better experiences on an enterprise level.
The desire to elevate the employee experience has implications for learning and development as well. HR technology is a great enabler in scaling development programs, facilitating their management, and leveraging data to ensure program investments bear tangible fruit.
Where should you invest in growing your HR technology budget?
Growing your HR technology budget in 2023 has the capacity for significant business value, but the key is to align your organization’s technology with identified people-centric gaps.
According to Deloitte’s article “Optimize learning through curation, automation,” while some companies may see their investment in hr tech for learning and development as an employee benefit, it is actually just as beneficial for the business itself. As the article says, “prioritizing curation, leveraging technology, and targeting resources where they are most needed can enable a swift response to unexpected disruptions, not to mention making the most of workers’ time and talents.”
HR and learning leaders can expand and progress these key initiatives through scalable leadership coaching technology. Coaching enables leaders and professionals at all levels to supplement their technical expertise, and gain people-first capabilities that make them more adaptable for facing future challenges.
Integrating leadership coaching technology into your development program ensures leaders at all levels, like new managers and other vulnerable talent cohorts, can be equipped with the capabilities they need to lead themselves, lead others, and lead with impact. As leaders become more effective in their roles, they will have a marked impact on business outcomes. Effective leadership increases engagement, improves digital employee experience and employee well-being and helps bridge talent and leadership gaps. In doing so, this people-centric HR technology investment provides measurable value to human capital management and overall HR function.