2024 has been a year of contradictions, particularly for those in Human Resources.
On one hand, HR professionals have self-reported that they’re “viewed as contributing strategic value” in greater numbers than ever. According to our 27th Annual HR Systems Survey Report, 52% of HR professionals believe they are playing a much more central and strategic role in the business and that focusing on outcome-oriented HR functions is driving that change.
On the other hand, that same research report indicates that during the past 12 months, outcomes have declined across each core category we track: Talent Outcomes, HR Outcomes, and Business Outcomes. (See the illustration below.)
Granted, the decline isn’t dramatic… but it does beg one fundamental question: why?
After all:
- HR systems – both standalone applications and full-scale platforms – are more capable and more deeply integrated than ever.
- Artificial Intelligence (AI) – billed as the single greatest boon to HR practitioners since the advent of The Cloud – is being baked into virtually every nook and cranny of the employee experience.
- And in the post-pandemic workplace, HR professionals have largely secured their “seat at the table.”
So, what’s going on? How can HR at once be more confident than ever in its strategic place in the business world, yet year-to-year outcome improvements have stalled?
The answer can vary widely from company to company, but we do see some consistencies.
In addition to the research we conduct through our annual study (and throughout the year,) Sapient Insights Group also has a thriving consulting and advisory business. Each year, we help organizations of any size and in every industry to navigate change, overcome challenges, and improve operations across the board.
We’ve collected a few of the most common challenges we encounter, as well as some best practices for transforming those challenges into opportunities.
CHALLENGE 1: THE HR TECHNOLOGY “VICIOUS CYCLE”
The Challenge:
Today’s business leaders – HR and otherwise – are wrestling with challenges on multiple levels. In addition to contending with external forces (economy, competitors, etc.), they’re also wrestling with significant internal issues. The constant addition of new technologies and associated process changes is often doing more harm than good… and it leads to an inability to connect with, inspire, and effectively lead teams.
This invariably leads to employee issues. Because managers aren’t effectively connecting with or inspiring workers, and employee engagement, commitment, and loyalty are all on the decline. Hybrid and work-from-home trends widen this gap.
These employee issues typically manifest in performance issues. As workers become increasingly disengaged from their day-to-day activities, quality issues become more common, and dissatisfaction from both internal and external clients accelerates. This creates even greater internal pressure, leading to “Quiet Quitting” and higher rates of unwanted attrition.
As employees exit the business, a cascading array of headwinds are created. Those employees who are “left behind” often struggle to absorb the workload. This dynamic, when combined with widening skills gaps and talent shortages, leads to diminished operational effectiveness and financial performance.
Since so many of these challenges are rooted in employee issues, HR teams are naturally, viewed as the appropriate internal resource to get things back on track. But pressure is high, and HR teams are often understaffed, so HR turns to technology vendors to help automate tasks, improve scale, and streamline operations… which creates greater pressure on leadership, and the cycle begins again.
The Resolution:
Whether adding new HR tools to your tech stack, replacing existing tools, or combining the two, it’s vital to have dedicated technology personnel who fully understand the challenges unique to the HR function and other personnel-focused roles.
In addition to having a decidedly HR-centric view of technology and infrastructure needs, a dedicated HR technology role on your team can help separate marketing hype from the day-to-day reality of using new tech within your current and future tech environment. Making the right investment for you and your organization can help decrease the “tech bloat” that so many organizations are encountering today. You can also check out our latest report to see which vendors and platforms our “voice of the customer” survey respondents recommend.
CHALLENGE #2: TECH INEXPERIENCE
The Challenge:
According to our most recent report, only 43% of organizations have a dedicated HR technology role on staff today. Of the organizations that do have this role, more than half (58%) have less than three years of experience in that role.
Given the complexity of HR platforms and the deep level of integration with other business systems that is often required, this can be a particularly challenging role for “on-the-job” learning. Left unchecked, this can lead to making the wrong technology selections or overseeing poor implementations that fail to meet the intended goals.
The Resolution:
Developing a comprehensive HR systems strategy is the best way to avoid these challenges. By starting with a pragmatic view of business needs and desired outcomes – across the entire business – you can create better use cases, define needed functionality at a more granular level, and more accurately map out what types of data will be served and consumed by your HR systems, and ultimately make better buying decisions.
For those organizations who do not have a dedicated HR technology role, or for those who are relatively new to the function, Sapient Insights Group has a comprehensive HR Systems Strategy cohort that will take you from “square one” through the development of a complete strategy – custom-tailored for your business – all while getting support from our expert team. Click here to learn more.
CHALLENGE #3: BUDGETARY “HOLDING PATTERNS”
The Challenge
Only 7% of respondents to this year’s survey indicated they would be decreasing spending, but the majority – some 53% – indicated HR technology spending levels remain unchanged from the previous year. That means if you’ve outgrown your current systems or if your business needs have evolved and you need a bit more horsepower under the hood, this might not be your year. You’ll likely have to make some tough decisions – a year of “or” not “and” – which could hamper your ability to keep pace with change.
The Resolution
The key to unlocking more budget is “speaking the language of business.” In other words, you need to be able to build a business case, show how the investment will drive a return, and, most importantly, have the evidentiary data necessary to back up your claims.
Building a solid business case for HR technology investments isn’t just a “nice-to-have” – it’s essential for getting buy-in from stakeholders and ensuring long-term success. To demonstrate ROI, you need to track metrics that connect directly to business outcomes, such as time-to-fill, employee retention rates, productivity improvements, and cost-per-hire reductions.
Collecting this data means collaborating across departments – HR, IT, and finance – to pull meaningful, accurate information from your existing systems, surveys, and even exit interviews. It’s about showing not just what the technology does, but how it drives value and outcomes for the organization as a whole.
When you’re ready to make that purchase, it’s critical that you place the right bets, and our HR Systems Survey Report is a great place to start. The full report highlights the top vendors in each category, as ranked by HR practitioners from the 3,300+ unique organizations that participated in the survey. So, whether you’re building your shortlist or just want to see how your current providers stack up, we’ve got you covered.
CHALLENGE #4: PERCEPTIONS V. REALITY
The Challenge
New HR technology is often introduced as a panacea – an easy button that will perfectly match your every need today and keep pace with your business tomorrow. The current crop of HR platforms and point solutions are remarkably capable and very well might be able to keep every promise made during the sales cycle, but even if it’s a perfect match for your needs, getting it right requires a lot more than just picking the right solution. Implementing, configuring, integrating, testing, and finally launching – they’re all significant milestones in the journey.
Then there’s the human factor… and that’s often the trickiest part to navigate. No matter how flawless the technical aspects of the project – no matter how perfect the solution – if the people aren’t ready to embrace the tech and all the process changes along with it, you’re fighting an uphill battle.
The Resolution
Call it change management. Call it digital transformation. Call it whatever you like, but make sure your team and your organization are ready for what lies ahead.
The key to bridging the gap between expectations and outcomes lies in preparation – both technical and human. A successful implementation isn’t just about picking the best tool; it’s about building the right foundation to support it.
Start by creating a clear roadmap for the entire process, from integration and testing to rollout and adoption. Make sure all stakeholders—not just HR but IT, finance, and leadership—are aligned and understand their roles in the process. But ost importantly, don’t underestimate the human factor.
Change management is often the unsung hero of a smooth implementation. Start early by communicating why the new system is being introduced and how it will benefit both the organization and its people. Offer plenty of opportunities for feedback, training, and support so users feel confident and capable, not overwhelmed.
After all, the best system in the world won’t succeed if your people aren’t ready to use it. By prioritizing alignment, planning, and communication, you’ll turn perceptions into reality – and ensure your investment delivers on its promise.
If you’re new to leading your teams through change or digital transformation, be sure to check out our Change Leadership Cohort Program. Kicking off in late January, this 60-day immersive program will show you everything you need to know to foster a culture of innovation within your company.
PULLING IT ALL TOGETHER
The world of HR technology is evolving at breakneck speed, but evolving systems alone can’t guarantee results. As we’ve seen, the challenges are real: from the vicious cycles of tech bloat and disengagement to the lack of experienced HR tech roles, stagnant budgets, and the daunting gap between expectations and reality.
Yet, within these challenges lie the seeds of transformation. With the right strategies – rooted in clear business needs, collaborative planning, and a focus on the human side of change – HR leaders can break free from these cycles and create systems that truly deliver. The tools and insights are available, but success starts with knowing how to use them effectively. The decisions you make today will shape the trajectory of your teams, your people, and your organization for years to come. So, let’s move forward – armed with insights, driven by strategy, and ready to turn challenges into opportunities.