How to Win Approval for HR Tech Investments in 2023

​As corporate budgets tighten amid economic uncertainty, HR may not view 2023 as the opportune time to pitch new technology investments to the C-suite. But industry analysts, as well as many HR leaders, say that if these proposals are tied to areas where C-level leaders have concerns—including recruiting during acute labor shortages and retaining top talent—they still have a good chance of getting the green light this year.

For example, a recent report by HR technology advisory and research firm WorkTech found that companies are increasing budgets for conversational artificial intelligence (AI) technology in 2023. And despite recession concerns, almost three-quarters of 1,000 HR and talent leaders surveyed for the report said their hiring technology budgets would stay the same or increase.

The WorkTech report also found that new investments in chatbots and conversational interfaces will be used internally to promote mobility for existing employees.

HR analysts say there may be a silver lining to pursuing fewer but more impactful technology investments due to smaller budgets in 2023.

"HR leaders can only afford to make a few big bets this year, which means they don't have to navigate through and manage dozens of initiatives or programs," said Mark Stelzner, founder and managing principal of IA, a HR advisory firm in Atlanta. "That brings a new simplicity and will cause organizations to really prioritize where they can get the biggest [return] from technology investments this year."

Proven Strategies for Winning the Pitch

Stelzner urged HR tech buyers to avoid a fundamental misstep he still sees many HR functions make when asking for new or replacement platforms.

"[They are] not tying proposed investments to a strategic business imperative," he said. "Those making the pitch are too focused on the value the technology will generate only for HR as a function without tying it to the front lines of the business or to objectives C-level leaders see as essential to the bottom line."

Stelzner added that it's important for HR leaders to be both "interested and interesting" to win approval for technology investments. "The 'interested' portion is being acutely aware of both the headwinds and tailwinds facing your business, and of the imperatives and issues receiving the most capital and operating expense in your organization," he said. "The 'interesting' piece is proposing technology solutions that help to support and accelerate those business goals, not distract from them."

Mark Berry, senior vice president of people at Inari, a seed technology company in Cambridge, Mass., recently won approval for a series of specialized "point" technologies, including systems for employee surveys, workforce analytics, conversational AI and benefits advisory services. Berry said one of the keys to that success was conducting extensive due diligence and "discovery" with all the senior leaders who could influence a buying decision.

"Before a pitch is ever made, I spend considerable time mapping out the stakeholders with decision rights to say yes or no, as well as those who will influence a decision, although they may not have a vote," he said. "Those stakeholders often have different ways they like to be pitched or have varied value propositions around technology investments. I meet with all of them to get to know their perspectives and feelings."

As a late-stage startup, one of the biggest challenges Inari faces is keeping the talent it's worked hard to recruit and nurture, Berry said. Because of this, he prioritized persuading his C-suite of the need for next-generation technologies that can help HR stay abreast of employee sentiment to ensure top talent remains engaged, content and productive.

Berry wanted to invest in a voice-of-employee platform that would, among other purposes, survey newly hired employees after their first 14 and 60 days on the job to gauge how well they were assimilating and progressing, helping to reduce attrition.

"This was the pitch that took the most educating on my part, simply because our executive team didn't have as much exposure to the technology," he said. "But the selling point was the technology would provide the kind of real-time intelligence needed to determine things like why certain candidates turn down job offers or why people might leave the company soon after being hired."

'Pre-Socialize' Proposed Investments

Core human capital management (HCM) platforms aren't replaced very often, and specialized solutions and apps may only be added every few years. If an HR leader has been out of that sales game for a while, Stelzner said one good step is to ask peers for examples of past technology investment pitches, both those that were approved and those that failed.

"You'd be surprised how even details like choice of layout, graphics and font in a presentation can make a difference to success," he said. "You don't want to create distractions. And you want to get to your point quickly. Senior leaders or boards of directors don't want to have to spend time searching or waiting for information relevant to making their decision."

Stelzner said it's also crucial to "pre-socialize" a pitch to stakeholders before making the formal presentation, giving you time to do any necessary negotiating in advance to improve your odds of success. 

"If the dollars for your proposal might be taking something away from another stakeholder, you need to know what it might be," Stelzner said. "Will you be taking capital or operating expense away from another executive? If so, you may need to trade something off before you make the formal pitch to negotiate a higher chance of success."

Berry agreed that the groundwork done in advance of a final presentation is essential. "When you go to ask for the order, you don't want any drama," he said. "By that point, you should have already built a coalition that will affirm the technology investment you're recommending, whether others backing you are in the legal department, in IT or a CFO. You don't want to get to the end of a very long selling cycle and have the last card someone plays be a surprise."

Picking Your Battles Wisely

Experts concur that some types of technology investments will prove easier to pitch than others, given 2023's economic climate. Platforms and apps that can help identify and source job candidates in markets with labor shortages, as well as specialized solutions—such as internal talent marketplaces, analytics software, and learning and employee recognition platforms that can help retain employees—will likely meet less resistance from the C-suite.

Sapient Insights Group's 2022-2023 HR Systems Survey found the three areas where HR functions plan to spend the most on technology this year are recruiting, people analytics and learning, reflecting a continued focus on recruiting and retention.

"Companies in many industries can't just hire their way out of problems anymore; they have to be able to retain their best people," said Suneet Dua, products and technology chief revenue and growth officer at professional services firm PwC.

One approach gaining currency with the C-suite is HR technology that can make an organization more agile and adaptable, said Cliff Stevenson, director of research and principal analyst with the Sapient Insights Group.

"How HR technologies tie into adaptability is of growing interest to senior executives," Stevenson said. "Anyone who's been in a C-suite the last three years has adapted well to rapidly changing business conditions, or they'd likely no longer be in those seats. Many want to know how new technologies will help them react faster to turbulent markets or to new realities."

For HR technology ecosystems, being agile partly means having the ability to plug-and-play apps and point solutions from different vendors to meet shifting recruiting and skills development needs. It also means being able to reconfigure existing systems for changing conditions, such as the technology platforms that pivoted to track COVID-19 infections and vaccination rates in the workforce during the pandemic.

In its 2023 HCM Technology Imperatives study, consulting firm Gartner found that business "composability" will be an increasingly important predictor of future success. According to John Kostoulas, a vice president analyst specializing in HR technologies at Gartner, that means creating systems and strategies that maximize the resilience, adaptability and flexibility of an organization.

"HR technology should help all roles, including executives, managers, employees and HR specialists, make good decisions fast, not just enable a series of HR process steps," he said.

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