Leverage the power and promise of HR technology to increase HR’s impact.
- Gartner client? Log in for personalized search results.
HR Technology: Transforming the HR Function
CHROs focus and invest in HR tech for a future-ready HR function
In a recent Gartner survey, 44% of respondents said driving better business outcomes was the No. 1 strategic priority for HR technology over the next three years. But talent shortages and economic uncertainty create significant barriers to transformation.
This report provides insights and guidance to help you:
Target investments that enable strong business outcomes in challenging times
Choose how to budget for HR tech innovation
Keep pace with peers while delivering increased business agility and value
Enhance HR’s value to employees and the business through HR tech
As HR technology increasingly impacts talent and business outcomes, progressive CHROs leverage its value in the following ways.
- Enabling the Business
- Assessing Emerging Tech
- Delivering World-Class HR
Drive better talent and business results through transformative HR technologies
Technology plays an increasingly pivotal role in how HR operates — and in most organizations, HR technology is the CHRO’s problem to solve. In the face of challenging economic conditions and tight labor markets, CHROs must balance between the need to deliver business transformation and the need to operate with fiscal discipline.
Nevertheless, HR is investing. Our research indicates that HR leaders rank HR technology as the No. 1 area of investment in 2023 among all priorities, and 46% of HR leaders plan to increase investments in HR technology.
Technology now touches every aspect of employees’ lives. By expanding digital HR to all employee workflows, HR technology leaders must be prepared to innovate beyond operational efficiency to make significant changes that will affect employees’ work, careers and the organization.
As with other parts of HR’s operating model, huge process, technology and cultural changes are needed to effectively leverage skills and align HR technology investments with critical business outcomes.
The HR function can start this journey by moving away from HR process automation and moving toward business-enabling digital transformation. This doesn’t mean “pushing” things to the business, but developing the HR technology landscape with and for the business. To accomplish this, progressive CHROs must take these actions:
Anchor HR’s digitalization efforts around the business outcome and end users to secure adoption of HR technology solutions. This requires two-way alignment with stakeholders on the talent imperatives of your organization and on the expectations from HR and HR technology.
Tackle user resistance to new HR technologies. Our research shows that 63% of employees stop using technology if they don’t see its relevance to their day-to-day work. Engaging HR teams around their understanding of the technology and its processes is critical. When considering a new HR technology, ask these questions:
Will the HR tech solution encourage the right culture for all user types?
How do we want employees to feel as a result of the process after they have interacted with it?
Use internal SLAs to establish accountability for process improvements and drive adoption. Determine what manager and employee behaviors are necessary to ensure smooth access to technology-related opportunities — and create strategies for redirecting resistors toward the new technology.
Choose “big bang” HR technology efforts carefully, and then stick with them. By ensuring HR is set up to capture the benefits of market innovations, you can position HR to improve talent, as well as the business outcomes your organization cares about. You will also equip employees with the skills and capabilities to thrive and feel fulfilled in an increasingly complex work environment.
Explore the ways innovative HR technology can support HR value delivery
Innovative HR technology and trends are constantly emerging, with the promise of supporting the transformation of existing and new HR processes and delivering great business value. Successful CHROs remain mindful that the very latest technologies will always be untried and untested and will likely have a decade or more of development before they can fully deliver their intended purpose.
Increased hype about AI and generative AI, conversations around productivity and a greater demand for responsible AI continue. Uncertain labor and economic conditions add another layer of urgency to find innovative HR technology solutions that support a flexible HR strategy. Meanwhile, the demand for an improved employee experience and human-centric work design continues. With these factors in mind, today’s CHROs must be able to budget, select, implement and integrate new applications alongside existing solutions — without compromising user experience.
As you vet and manage an increasingly complex portfolio of technologies, prioritize investments that enable flexibility and resilience. Gartner recommends that 10% of the HR technology budget be allocated for investment in innovative HR technology.
When evaluating emerging technology opportunities for HR in your organization, consider the following criteria:
Strategic fit: Gauge whether an emerging technology is aligned with your HR technology strategy and guiding principles, HR strategy and overall business strategy.
Technical fit: Evaluate the human capital management (HCM) suite for both current and expected future capabilities against specialist tech vendors. For each option, gauge the extent of technical viability and ease to implement, including considerations related to integrations, fit with the overall IT architecture, security and privacy, user experience and the like.
Organizational fit: Gauge the extent to which your organization — your employees, managers and leaders, as well as your HR and IT administrative users — is ready to adopt an option.
Market fit: Evaluate whether an option is in line with key market trends.
Relative cost: Determine the relative one-time and ongoing costs of implementing and sustaining an option.
Many emerging HR technologies will require cultural changes that take time. Instead of waiting for change to happen, select the right places inside the organization to pilot innovations that demonstrate business value.
Achieve functional excellence by managing HR technology effectively
Successful HR technology management results in a more humanized employee experience. In a hybrid work environment with changing workforce preferences, business operating models and stakeholder expectations, progressive CHROs think fresh about how HR achieves functional excellence.
Traditional improvement efforts have focused on enhancing internal coordination, digitalizing HR processes and boosting internal capabilities. But as HR’s role grows, so does the need to adjust its improvement efforts.
On the technical side, CHROs must manage HR technology transformation effectively to deliver on business value. This includes inspiring and holding HR technology teams accountable for the following activities:
Change management and training to overcome resistance and drive HR tech adoption
Job architecture optimization to streamline and drive automation efficiencies
Process redesign to streamline processes globally
Integration planning, especially with payroll solutions
Security and privacy needs, including confirming how advanced data analytics models work and where data is stored
User experience, i.e., understanding your HR technology end users and what they expect when they use a technology solution
Data cleansing to prepare data for migration to the cloud HCM
Deployment strategy to roll out different modules across different countries
Sustainment governance to ensure your team learns enough about the system to sustain it going forward
Engaging an application service provider with relevant HCM cloud experience
HR must also accommodate increasing demand for business support. Our research reveals that more than half (55%) of HR leaders say HR is getting more requests on a wider variety of topics — and the requests are not always straightforward. HR leaders surveyed say that, compared to prepandemic conditions:
Meeting the conflicting demands of stakeholders — for example, providing both self-service HR and white-glove support — is harder
The interdependent changes happening today (such as integrating employee well-being into workflows) are more difficult to manage
The HR function is facing more novel challenges — such as maintaining productivity in a hybrid work environment
To achieve world-class delivery, HR can no longer just be the “owner and operator” of HR technology — the sole party delivering the work. HR now needs to convene — bringing stakeholders together and orchestrating a framework for that group to make decisions and find solutions. HR must also catalyze by bringing about and inspiring a flow of new ideas for ways of working in the new world of work.
Gartner ReimagineHR Conference
Join your peer CHROs and HR leaders from leading organizations to discuss specific HR challenges and learn about top HR trends, insights and priorities.
FAQ on HR technology
How does technology enable data-driven HR decisions?
As enterprise organizations advance their HR technology strategies, HR technology leaders are increasing their spend on reporting and analytics platforms to connect HR system capabilities with key business and talent outcomes.
Talent analytics are one example. HR can use tech-enabled talent analytics to inform leader decisions and enhance talent outcomes. And talent management leaders use predictive analytics to provide insights on attrition, burnout, employee sentiment and other metrics.
What role does AI play in HR practices?
AI in HR technology has a multitude of use cases. Some of these include the following:
1. Talent acquisition: AI-powered candidate assessments can infer a candidate’s cognitive traits, behaviors, emotions or personality. AI also aids in sourcing and ranking candidates and job fit scoring.
2. Voice of the employee: Natural language processing techniques are used to identify employee-experience-focused themes and sentiment.
3. Learning: AI-powered HR software can deliver personalized learning recommendations based on learner behavior.
How does HR technology enhance the hiring process?
HR historically relied on an applicant tracking system to meet the core tracking, posting and automation requirements of the hiring process. As the talent acquisition function of many organizations has expanded to compete for talent, HR technologies now cover a broader set of activities such as recruitment marketing, candidate relationship management, onboarding and even internal talent marketplaces.
Because of pressing hiring needs for most organizations, using HR technology for passive-candidate sourcing, AI-enabled candidate skills matching, interview-related automation and improving the overall candidate experience has the highest potential for enhancing the hiring process.