Will spending for HR technologies at your organization increase, decrease, or stay the same for the next year? This question has been answered by Sierra-Cedar HR System Survey respondents since 2012, and this year just 41% of organizations report plans to increase spending—a slight decrease from 2018.

2019 HR Technology Spending Trends Outlook

Spending plans vary dramatically by organizational size and type, therefore important factors to consider when taking a look at year-over-year trends.

Three-Year HR Technology Spending Trends

Small organizations are the fastest-growing segment of new HR technology buyers, but they continue to be the most cautious. With 61% of Small organizations on target to simply maintain their existing HR technology spending, HR technology vendors will need to continue to provide economical options with high-value outcomes.

Medium organizations grew their spending plans by 20% last year, but this year, spending plans will hold steady. More Medium organizations, however, are planning to decrease spending this year when compared to last year.

Large organizations saw the greatest change in spending plans from last year, with 52% of organizations planning to increase spending, up from 48% last year.

This year we also looked at HR System Spending plans by organization type and found that subsidiaries and publicly traded organizations were much more likely to increase spending than private or franchise-based organizations.

Plans to Increase HR Systems Spending in 2019–2020 by Organization Type

This year’s HR technology categories where respondents plan to increase or decrease their spending are similar to last year’s, with over 50% of organizations planning to increase spending in the area of Talent Management. Plans to increase spending for Core HRMS environments show the investment organizations are still planning to make in this HR technology application area. Benefits was a new addition to the list of spending categories this year, with 34% of organizations planning to increase spending in this area.

When looking at spending plans for HR applications by organizational size, Large, Medium, and Small ranked TM as their number one spending priority for next year. Plans to increase spending in Benefits were much higher, at 39% for Small organizations compared to just 23% in Large organizations. Large organizations were twice as likely as Small organizations to increase spending in Business Intelligence/HR Analytics and Emerging technologies.

Areas for Planned HR Technology Spending Increases & Decreases