Technology was ranked as the leading HR investment priority for the second year in a row as HR leaders expect technology-related initiatives to hold the biggest HR function efficiency potential.
HR technology can trigger cost savings in HR administration, which has seen a drastic increase in costs due to pandemic-related tasks such as vaccine mandates, remote work arrangements and contact tracing programs, Gartner said in a statement.
Gartner surveyed 118 HR leaders in October 2022 which revealed that the other top investment areas for HR leaders in 2023 are:staffing and recruiting, total rewards and learning and development
“Our research shows yearly spend on HR administration increased from $155 per employee in 2021 to $194 per employee in 2022,” said Seyda Berger-Böcker, director in the Gartner HR practice.
“This is alarming considering HR functions have been trying to reduce the burden of administrative tasks through the use of technology,” added Berger-Böcker.
The consultancy firm said that HR leaders can create efficiencies by implementing human-centric technology solutions – such as skills management or learning experience platforms –to improve employee experience, retention, collaboration and performance outcomes.
The survey found that organisations continue to face talent shortages as competition expands due to accelerated digitalization and the adoption of remote work.
“Leading organisations are preparing for extremes in hiring by investing in recruiting technology,” Gartner said.
Gartner said that technologies with the most potential to help in recruiting operational excellence are AI-enabled sourcing and screening capabilities and candidate relationship management platforms.
Gartner added that “HR functions face the challenging task of providing additional financial support to employees affected by today’s cost of living increase, while avoiding a wage-price spiral.”
Therefore, HR leaders responded that total rewards is the third-largest investment area for 2023 – moving up from fifth in 2022.
“HR leaders must recognise that obligations, stressors and concerns from employees’ personal lives will reverberate in their working lives, potentially affecting performance and productivity,” said Hanne Nieberg, director in the Gartner HR practice.
“Total rewards strategies must holistically support employees as people – not just as workers – which includes physical and mental well-being.”