Gartner: HR Technology a Top Priority, But Strategic Impact Lags

Two recent studies from Gartner show that while HR technology remains a top investment priority for HR executives, few of those leaders believe their organizations are receiving maximum value from that technology spending.

A Gartner survey of HR leaders in February found that less than one quarter (24%) believe their function is achieving maximum value from HR tech. Only 35% of respondents are confident their current approach to HR technology is helping achieve business objectives. Two out of three also reported that if they don’t take action soon to improve HR’s approach to technology, their function’s effectiveness will decrease.

The findings come on the heels of another Gartner study showing that HR technology is the top budget priority of HR executives for the third consecutive year. Almost half of respondents (48%) said they will increase their HR technology budgets in 2024.

In that earlier study HR leaders said technology was a key to driving better business outcomes, enabling growth and reducing HR costs. But many also reported their technology investments had little to no success in reducing the cost of HR operations.

Beyond Efficiency to Strategic Impact

Gartner analysts say a significant reason for the limited impact of HR tech investments on business outcomes is the objective for implementing the tools. “Too often HR is using technology in ways that only deliver new efficiencies within the HR function but that don’t have strategic impact on the broader organization,” said Mark Whittle, vice president of advisory in Gartner’s HR practice.

Many stakeholders outside of HR also continue to lack confidence in HR’s ability to implement technology in ways that add true business value. Nearly half of respondents to the Gartner study reported the use of HR technology solutions has damaged rather than improved HR’s reputation across an organization, often because of issues like rolling out poor beta versions of platforms or systems being designed solely for HR users and not other employee segments.

That survey finding has wider implications, given that Gartner research also shows employees who are dissatisfied with workplace technology are twice as likely to look for new positions externally than internally.

Gartner analysts say one way HR leaders can start to counter these problems is by presenting function and business leaders with proposed smaller, foundational changes rather than big, transformational technology projects.

Low Adoption an Issue

The Gartner studies also found low adoption of new HR technologies is dampening return on investment. “This isn’t just low adoption from broader end users, but also by HR staff itself,” Whittle said. “Sometimes the biggest barrier to adoption is that non-technical HR staff don’t understand the possibilities of new technologies and they resist its use.”

To boost adoption of HR technology Gartner experts suggest three general strategies: Install more employee feedback loops; dedicate more resources to change management; and align HR technology investments with stakeholders’ digital maturity.

HR Increasingly Views AI as a Threat

Although there’s a common belief that use of new technologies like AI has improved HR staff satisfaction by removing many rote or manual tasks in the function, the Gartner study found the evolving use of AI is increasingly seen as a threat by HR professionals.

Nearly half of HR employees in the Gartner study agreed that HR technology has removed parts of their jobs that they liked. Whittle gives the example of HR professionals with expertise in talent mobility who have watched the rise of AI-driven internal talent marketplaces supplant much of their work.

“All of a sudden an AI algorithm may be faster and better than they are at matching employees to internal opportunities,” Whittle said. “When technology starts encroaching on their ‘specialism’ or tasks they like to do and that differentiate them, HR staff takes a dimmer view of those tools.”

To help HR staff adopt new perspectives around technology, Gartner believes HR leaders need to go beyond mere training and tangibly illustrate how technology can support high-value work rather than limiting current jobs and activities.

Dave Zielinski is principal of Skiwood Communications, a business writing and editing firm in Minneapolis.