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HR Leaders Should Demand More of Their HR Systems

November 08, 2022 Talent Management
Lance Haun
By Lance Haun

HR and work technology have come a long way since my first job as an admin at the student-run computer lab at my university. Our time-card function was created by a former student and was practically unmaintainable. Our employee records were file cabinets and text files. I thought things would get better after graduating, but the HRIS at my first job out of school was an ancient Kronos time clock and more paper files. I even had a fax machine. And this was all well after the widespread adoption of computers and the internet.

As an industry, HR technology has always felt a step behind. While new technologies have been released over the past two decades, practical implementation and application have been slower than what a lot of organizations would like. 

That’s why it should surprise no one that deficiencies in HR systems are top of mind for many organizations as they plan for next year.

The End of the 'Year of Grace'

The last two and a half years have been the most disruptive in the history of Sapient Insights Group’s annual HR systems survey. That’s saying something because this is the 25th annual report on the state of core HR technology inside enterprise organizations. It is one of the most important pieces of information to contextualize the current state of HR technology. 

When chief research officer Stacey Harris presented the results, she declared the end to the year of grace that HR and work technology buyers gave vendors in the aftermath of the pandemic. Organizations working with either static or very slight increases in technology budgets are looking to get more from their current providers or move on. 

Nearly half of respondents in the report said they planned to replace their time and attendance system and more than a third have already decided to replace their payroll system in the next two years. Across the board, the report saw a 7% decline in overall vendor satisfaction ratings and a 6% decline in overall user experience ratings with learning, analytics, and compensation seeing the most significant declines in satisfaction. Two in five buyers are also looking for better reporting functionality from these key technologies to drive better decision-making.

Related Article: How HR Tech is Adapting to the Digital Workplace

Leaders Need to Demand More of Their HR Systems

This trend isn’t an aberration. It’s something that one leader described as a slow build to this moment.

In her case, her organization had proactively moved to a Software-as-a-Service model in work tech to solve some of these challenges a few years ago. The hope was it would provide easier upgrade paths, fewer headaches and no six- or seven-figure implementation costs. They wanted quicker access to innovation to help them adjust to changing conditions at work. They were happy to pay for technology on an annual basis, especially if it meant their systems would work better and they would get better support.

Yet when the crisis hit, they didn’t get the support they needed. Their vendor partners showed no urgency in helping organizations adjust to a new normal. Development priorities were slow to change, with promised functionality to support hybrid and remote workforces still in development. Spot requests for the types of reporting and analytics that would help them make critical decisions were ignored or delivered well past the point of usefulness. 

The lowlights from the report speak for themselves. The high levels of dissatisfaction can’t stay that way. Every standard three- to five-year contract that was signed pre-pandemic is coming to term in the next two years. Which gives work leaders leverage: either to put pressure on existing vendor relationships or forge new ones. There’s no reason to hold back and work with less when you don’t need to. 

For those with a little more time, ask yourself if your vendor partner will be able to fulfill your needs or if you need to take a different approach. Researching competitors and talking to peers at other companies is going to be critical during this time of technology turnover. While there’s a possibility you'll repeat your mistakes and land in an ill-suited technology partnership, there’s also an opportunity to rethink and reimagine what a great HR technology stack can look like.

Related Article: Digital Transformation and Talent Shortages Roil the HR Industry

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