HR Tech Confidence Check: On the edge of glory or complacency? 

While many organizations claim to embrace agility in their HR systems, only a small fraction have fully deployed state-of-the-market digital tools. Yet despite prioritizing incremental gains over monumental ones, satisfaction with HR technology is on the rise this year, according to our latest HR Tech Confidence Check study, which gathered insights from over 190 employers globally in July 2024. So, is HR tech better meetings the needs of the organization or are we witnessing growing complacency?

At a glance, overall satisfaction with HR tech seems to be on the rise, particularly among budget leaders. Satisfaction rates across this group increased by 30% year over year, while dissatisfaction rates decreased by more than 39%. Similarly, HR teams are citing greater contentment with the ROI they’re seeing from their HR technology. 

However, a closer look shows extreme satisfaction and extreme dissatisfaction around HR tech ROI have both decreased since last year, signaling we may be settling. Instead of tech completely amazing or absolutely angering us, more of us seem to be just ok with how it’s doing. Should this complacency continue to grow, organizations risk falling behind in their efforts to drive historic productivity gains and truly outmaneuver their competition.

Despite 47% of HR organizations reporting their current budgets are the same as they were six months ago, uncertainty around budgets is on the rise. Since last year’s study, the number of budget owners and influencers saying their HR tech budgets have remained steady has dropped by nearly 16%. At the same time, those reporting they don’t know how their HR technology budgets are shifting have doubled YoY. These budgetary uncertainties further threaten HR’s ability to deliver impact to the business, putting greater pressure on HR leaders and HR tech vendors alike to connect HR value to business value. 

Investments in core HR (HCM) and foundational technologies like learning and development (L&D) are cooling slightly, while investments in AI, analytics, employee experience and skills are on the rise. Where we see investments cooling, it’s often because there are few new customers to tap in these markets (most have already invested) and there’s increasing resistance to ripping out old tech and replacing it with new tech —  unless that new technology can significantly improve business outcomes or change the way work gets done. 

Where we see increased investments this year — across AI, HR service delivery, upskilling and reskilling, and workforce management — there are clear ties to what’s top of mind for the C-suite, namely productivity and agility. Clearly, driving better business outcomes is hot while rip-and-replace of technology is not. For today’s HR tech buyer, if it’s not significantly impacting business outcomes, the status quo is good enough for now.

Compared to last year, 36% fewer respondents say they’re able to prove their HR tech improves productivity and efficiency. Similarly, those that say they’re able to show positive impact on the employee experience decreased by 49%. Employee experience is challenging to measure because employee experience goes far beyond technology. As with much of the HR tech we encounter, our inability to show impact isn’t because we aren’t good at executing technology, it’s because we aren’t effective at executing change. Employee experience is a prime example of this since, at its core, this is an exercise in change — changing how we interact, how we engage and how we experience the workplace. Until we master how to address change, addressing employee experience through technology is destined to fall short of our expectations.

HR tech is making strides in satisfaction and ROI gains but serious challenges remain in deploying tech strategically and realizing desired outcomes. HR has a history of investing in technology without being able to prove the impact. It’s not enough to be good at selecting and implementing technology. We need to be good at deploying capabilities and executing change. Those will be the true measures of HR transformation success but we have a long way to go to build HR’s transformation muscle and learn to be digital.

Our latest research explores how HR teams perceive the value of their HR tech investments and how that impacts the future of innovation in our space.