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Human resources and employee experience technology

HR Technologies: Dissatisfaction and Need for Modernization

Investments Will Continue, But They Need to Be Strategic for Positive EX

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When scoping out the employee experience (EX) market for Dash Research’s recently published report, it was an interesting challenge to tease out the difference between HR tech and EX tech. Dash spoke to dozens of technology providers in the market, and their takes on the issue had some commonalities: 

  1. There is not a difference.
  2. There is a vague/grey line between them.
  3. Some technology is core, and some is not, but still within the potential EX universe.

Dash Research’s EX ecosystem contains six segments which are core to employee experience, but does view HR tech as an overarching umbrella that employees must interact with, sometimes in a positive or negative manner.

Source: Dash Research

Getting the basics right, like payroll and scheduling, is important for an employee’s everyday workflow and is sometimes the cause of ongoing friction, particularly for hourly or deskless workers. These challenges are sometimes not just being experienced by employees, but by the companies investing in the technologies as well. Sapient Insights’ recent research, the 2022-2023 HR System Survey, points to some dissatisfaction with technology vendors’ solutions, with many considering replacing systems, particularly in areas such as payroll or time and attendance. Some interesting points from the research, which encompasses responses from more than 2,500 small, medium, and large companies across 65 countries:

  • There is a 7% decline in overall HR tech vendor satisfaction ratings as well as a 6% decline in user experience scores.
  • Areas of particular concern include payroll, compensation, time, learning, and analytics. Reporting functionality and customization/configuration were identified as gaps that need to be addressed.
  • Over half (54%) of companies with more than 500 employees plan to increase HR tech spending by an average of 21%.
  • Forty-six percent of respondents view HR as contributing strategic value to their organizations.

Further research mirrors some of the trends Dash Research has seen examining EX technologies and how they fit into an often outdated, challenging HR tech stack, as well as the overall organization. According to 2022 research by PwC, more than a third (36%) of HR leaders say that modernizing HR systems is a top challenge, with technology integration being a particular obstacle. Sometimes with employee experience, a new technology must be layered into older communications, portals, or human capital management (HCM) software, which makes integration and customization difficult. Additionally, often data and analytics live outside of human resources, further complicating seamless processes and integrations.

Sometimes there are internal or operational challenges. Employee experience technologies are often sponsored internally by HR, sometimes in conjunction with IT. IT teams are often stretched to take on new technology implementations, and sometimes HR staff does not have the level of technology sophistication needed to research and choose technology or oversee a rollout. The Sapient research reports a 33% drop in human resources information systems (HRIS) professionals with 10 years of experience.

Companies will need to take a more strategic approach when purchasing or updating the HR systems they have, moving towards more employee-focused (and that includes the employees on both sides of these technologies), holistic, and flexible systems.

Source: Dash Research

It will take effort to move HR technology efforts forward, but the tools are available, and the effort is worth it. Sapient data reports that HR functions that are more strategic see an 11% increase in all business, talent, and HR outcomes over compliance-focused HR functions. While technology that supports the basics like payroll and scheduling are of the utmost importance, the ability to expand into other EX technologies and integrate that data, analyze, and use it to take strategic actions is key to an ongoing positive employee experience.

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