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New research reveals the top investment priorities for human resources departments in the coming year, with HR technology topping the list for budget allocation.
A December 2023 Gartner survey of 113 human resources leaders shows that HR technology is the top investment priority for such professionals, with learning and development, total rewards, and talent management the next three most sought-after matters.
Forty-eight per cent of respondents to Gartner’s survey said they plan to increase their 2024 HR technology budget. But while HR professionals see such tech as critical to driving better business outcomes, enabling growth, and reducing HR costs, one in four (26 per cent) said that such tech solutions have not been successful, and 32 per cent said they have only been slightly successful, in minimising the cost of operations.
“The digital transformation of HR will take time as many HR technology implementations are complex multi-year, multi-country projects,” Gartner HR practice director Hanne Nieberg said.
“The expected ROI is yet to be seen and the hype around emerging technologies creates inflated expectations that are difficult to meet.”
“Now more than ever, CHROs need to focus on driving profitable growth,” Nieberg continued.
“This will require them to ruthlessly prioritise investments that support business growth and talent retention while pausing or stopping funding for low ROI activities.”
On the question of total rewards, Gartner noted that issues around pay transparency, forthcoming legislation across the globe, and an increasingly fractured employee-employer relationship “continue to keep total rewards initiatives in the spotlight”.
Moreover, the firm added, persistent workplace and societal disruptions over the last five years have taken a toll on employees’ mental and physical health.
“Over the next two years, pay transparency legislation will rapidly take effect, which will require HR leaders to invest in employee recognition programs and rewards communication to ensure pay equity and to comply with new legal requirements,” Nieberg said.
“To improve employee wellbeing and ensure a productive workforce, HR leaders need to invest in wellbeing support that goes beyond traditional offerings and is embedded in the daily flow of work.”
Elsewhere, talent management is also being perceived as increasingly important, with HR leaders planning – according to Gartner’s survey – to invest in three main areas: performance management, employee experience and growth, and leadership development.
Nieberg said: “To drive retention and performance in an increasingly complex environment, HR leaders must bolster investments in areas such as transparent and flexible career paths, internal mobility opportunities, and agile upskilling.”
“To effectively close skill gaps, facilitate growth and enhance the employee experience, talent management technology investments should target internal marketplaces, AI-enabled skills management tools, succession planning technology and more.”
