HR Technology is a Must-Have in 2022. Here’s Why Funding Matters
Long relegated to the bottom of the priority list, HR technology is finally having its time in the spotlight. Remote and hybrid workplaces require a more mature approach to recruitment, retention, and workforce management. According to LinkedIn’s Workplace Learning Report, 64% of learning and development professionals agree that HR technology has shifted from a “nice to have” to a “need to have.”
As we face the Great Resignation, future-looking companies are making funding learning and development initiatives a top priority. This renewed focus serves as one of the most important indicators of an organization’s maturity.
What is organizational maturity?
With a basis in years of research, our Operational Maturity Index has nine key indicators that identify where your business is in their maturity transformation:
- People-centric culture
- HR’s role and people strategy
- Organizational alignment and curation strategy
- Employee experience
- Technology infrastructure
- Elective participation
- Governance
- Funding
- Reporting and measuring
In this article, we focus on just one indicator: funding.
The SumTotal Organizational Maturity Index shows that the most mature organizations are focused on upskilling their workforce in a way that strategically manages employees’ long-term career development and improves their daily work experience.
If you’re looking to mature your operations, it’s time to consider digital transformation as you build a future-ready workforce. Instead of siloed learning, talent, and workforce functions, a mature organization has a collaborative and transparent culture that focuses on the employee experience. Those efforts will take (you guessed it) the right funding.
Want to know where your organization stands? Assess your maturity by downloading our eBook and completing the SumTotal organizational maturity index diagnostic tool.
Employees Want Training, HR Teams Want Funding
Remote work has driven a big spike in employee demand for learning opportunities — so much so that it’s impacting your ability to retain members of your workforce. 94% of employees said that they would stay at their employer longer if the organization invested in their learning and development.
Learning and development budgets are seeing a boom in funding, with 2021 budgets bouncing back to pre-pandemic numbers. While having a larger budget is ideal, you’ll also need to keep an eye on spending to avoid purchases that are hidden away from HR oversight.
For example, when talent, learning, and workforce management tools are siloed, large organizations typically spend over 25% of their entire HR technology budget on integrations. With this in mind, why not manage your funding with a centralized platform that saves money by collating data sources? Moreover, your IT team won’t have to build and maintain costly integrations between all systems.
Be Honest About Where You Are With Your Organizational Maturity
Properly managing your organization’s HR technology budget requires you to control expenses by identifying redundant tools or tools with low adoption. It also requires business leaders to add more to learning budgets focused on employee experience, development, and retention.
Are you a less mature organization?
In a less mature organization, HR is treated as a cost center and the company is mostly focused on reducing HR technology investment — usually to less than industry benchmarks. When confronted with economic hardships, less mature organizations cut the HR technology budget first.
Or are you a more mature organization?
In contrast, a more mature organization sets talent as one of its most important investments. Funding can be linked directly to overall organizational success, and the company likely spends more than industry benchmarks on human capital. All learning, talent, and workforce management programs are aligned to measurable business goals.
How to Best Use Your HR Technology Funds
To optimize your HR technology budget management, begin by finding out where each line of business are currently spending money. You’ll likely find redundant functionality or tools that no one is using. Once you’ve identified the tools you want to keep, your organization can get a lot more for its money by negotiating with its vendors.
Most technology vendors offer discounts and pricing promotions to their customers. If you want to secure these prices, be direct with your vendor about your needs and budget — but remember the saying, “you get what you pay for.” Purchasing a cheaper but less functional tool may keep your budget down for now, but you might outgrow it quickly.
Your vendors are likely open to negotiating on spend, and there are many creative ways to work with vendors to get the best pricing, including:
- Asking for discounts based on volume deals or longer contract durations
- Asking for product bundles
- Agreeing to be a reference for prospective customers
- Agreeing to be featured in a case study or testimonial
Remote Workers Need HR Technology
Before you start spending your newly increased HR technology budget, take some time to evaluate your existing vendors, contracts, and expenses so you can properly invest in your employee learning experience. It’s time to plan for the long term.
Looking to dive deeper? Read our eBook on the 5 Stages of Organizational Maturity to learn how HR’s role and people strategy connects to our other indicators and what you can do to become a future-ready company.