For the third consecutive year, HR leaders have cited HR technology as their top investment priority, Gartner’s HR team has recorded.
Answers to the US-based consulting company’s survey identified four key trends. It found half (48%) of HR leaders planned to increase their 2024 HR technology budget, as many often saw technology as key to driving better business outcomes, enabling growth, and reducing HR costs. However, according to the research, HR technology solutions were not at all successful (26%), or only slightly successful (32%) in reducing cost of HR operations.
A third of HR leaders said they were planning to increase L&D spending in 2024 to develop skills at speed and scale, because employers were demanding workers possessed ever newer skills.
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The third trend revealed was that employees were consistently citing compensation as their number one reason to accept or leave a job, with issues surrounding pay transparency, forthcoming legislation around the world, and an increasingly fractured employee-employer relationship. This was persistently keeping total rewards initiatives in the spotlight.
Finally, talent management had increased in importance, moving to the fourth-largest investment area planned for 2024, from seventh just last year. Within talent management, HR leaders plan to invest in three main areas: performance management, employee experience and growth, and leadership development.
Gartner said that to gain improvements from technology, HR leaders must install measurement mechanisms early, and to accelerate user adoption. To achieve this, employee feedback loops was essential.
Hanne Nieberg, director in the Gartner HR practice, warned of heightened expectations from technology, adding that the digital transformation of HR would take time. This was because “many HR technology implementations were complex multi-year, multi-country projects.” She added that the expected return on investment was “yet to be seen and the hype around emerging technologies creates inflated expectations that are difficult to meet.”
When it came to L&D, Garner advised organisations to focus on agile learning methodologies, adaptive learning, mentoring, manager-led coaching and technology including generative AI, immersive learning/simulations, AI-enabled skills management tools and learning management systems.
Nieberg predicted that pay transparency legislation enacted in the EU (in June 2023) and in eight US states (including California, New York, and Connecticut) would “transform the picture on total reward” by raising employee expectations.
She said: “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. To improve employee well-being and ensure a productive workforce, HR leaders need to invest in well-being support that goes beyond traditional offerings and is embedded in the daily flow of work.”
The EU directive, pre-employment, requires salary transparency at the point of recruitment and introduces a ban on asking candidates about pay history. During employment employers must comply with employee requests for data on their individual pay level and average pay levels, broken down by sex, for workers doing the same work (or work of equal value) as them.
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Personnel Today’s webinar “How global employers approach pay transpency” on 21 May, features Ceris Pike, global reward lead at AstraZeneca, and Christine Hendrickson, VP of strategic initiatives at Syndio.
