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Human Resource Transformation Enabled by IT

Many senior executives are taking a proactive approach to digital business transformation in order to achieve their strategic goals. Delivering revenue growth and profitability is now imperative for every function, including Human Resources (HR).

The top 3 priority HR technologies this year are skills management, learning experience platforms, and internal talent marketplaces, according to the latest worldwide market study by Gartner.

"With a tumultuous global economy, HR technology leaders face a balancing act in 2023," said Sam Grinter, director at Gartner. "Leaders must anticipate greater levels of accountability and demand for measurable outcomes to justify new technology investments."

HR Transformation Market Development

Forty-four percent of HR leaders report driving better business outcomes is their number one strategic priority for HR technology transformation over the next three years.

Growth in headcount and skills (26 percent) and cost optimization (17 percent) were ranked as the next most important priorities.

Gartner research shows the top 3 hurdles for HR technology leaders are ensuring ongoing adoption of HR technology (57 percent), justifying HR technology investments (46 percent), and developing and maintaining a strategic roadmap for HR technology transformation (43 percent).

This year the typical enterprise Chief Human Resources Officer (CHRO) focus will also be directed to guiding the deployment and optimization of their existing business technology investments.

Most cloud applications get two to four major updates per year, and HR technology leaders must work to communicate updates in a timely fashion, so the organization can benefit from new capabilities.

In addition, Gartner research shows HR technology leaders see the most important investment this year as skills management (51 percent), learning experience platforms (41 percent), and internal talent marketplaces (32 percent).

"Organizations continue to face a troubling skills gap," said Josie Xing, director at Gartner. "This problem has compounded as the pandemic accelerated the adoption of digital technologies in all industries as well as today’s fierce competition for talent."

And yet, less than half (43 percent) of HR technology leaders believe their employees are satisfied with the HR technology used by their organization, with the rest reporting their employees are either neutral or unsatisfied.

According to the Gartner assessment, this dissatisfaction most often stems from suboptimal end-user experiences that can be due to several causes -- including lack of digital maturity, inadequate change management, and insufficient communication about the business value of the technology.

Moreover, 39 percent of HR technology leaders specified they define their own HR technology strategy with support from the IT department, while 45 percent reported shared leadership between IT and HR in defining the strategy.

"Leveraging IT expertise and support is necessary," said Xing. That's a key team collaboration goal.

Outlook for HR Technology Applications Growth

While many HR organizations try to fully own the HR technology strategy, Gartner believes the HR team is unlikely to have all the skills and experience needed to define a holistic HR technology strategy.

IT and HR must therefore work in lockstep to bring together both the digital business transformation process insight and technical practitioner applications expertise of their respective functions.

That said, I believe a lack of Software-as-a-Service (SaaS) solution skills also impacts online productivity as employees fail to effectively apply their digital workspace apps, which when used properly can reduce workflow friction. This is an area where a software vendor's Customer Success team is a helpful asset.

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