PwC’s HR Technology Survey 2020

Business leaders are benefiting from their HR tech and expect even more in the future—what needs to change?

PwC’s Human Resources Technology Survey explores the effectiveness of technology investments from the views of 600 HR and HR information technology (IT) leaders on six continents.

Chances are, everyone that works for you has at least one app that’s gently nudging them to change employers. And if you’re like most business leaders, you want them to choose your company, every single day. You work hard to give them a reason to stay.

It’s not the technology alone that provides meaningful and engaging work experiences—HR cloud was never meant to be the full answer. But technology does provide the foundation to modernize HR for ways that people want to work and for what the business needs.

In our latest survey, HR and HR IT leaders show where they say they’re getting the benefits from their tech portfolios. Their views point to the mounting pressures to add value back to the business—and some clear opportunities.

The big six issues driving HR technology decisions

Q: What's the biggest human capital challenge your organization is facing?
Base: 600 HR and HR IT Leaders.
Source: PwC’s Human Resources Technology Survey, 2020

Takeaways

01
Spend is up, worries mount

Top concerns for 2020?

  • Attract top talent and keep them

  • Develop everyone to reach their potential

  • Improve people’s work experience, primarily by automating tasks

What used to be a slow-moving corporate technology space a decade ago is now a $148 billion market of HR cloud solutions to address the needs for the future of work. Innovative start-ups are promising to help companies keep up with smart, always-on and connected interactions employees and talent networks expect.

Seventy-four percent of companies we surveyed plan to increase spending on HR tech in 2020 to address pressing talent needs. That’s on top of the $310 per employee per year they already spend on HR tech as they work to manage an average of nine core talent applications.[1]

Workforce leaders are willing to give any number of vendors a chance to help them tackle these issues, and new entrants make that easy to do. The current generation of HR tech has a solution for every point in the employee journey and to monitor every dimension of work.

Expect new investments in talent acquisition (49%), improved user experience for employees (48%) and skills mapping/career path tools (46%).

Half our survey respondents say they buy from multiple vendors, and 39% plan to increase the number of tech vendors they use over the next one to three years (up from just 20% two years ago). This uptick suggests that first-mover software vendors may have an audience if they tackle the right business needs.

Updating the candidate and employee experience is especially important for companies trying to fill critical talent gaps. They know that job seekers, particularly in high-demand fields, will turn down offers due to bad recruiting experiences, and they can’t take that chance.

[1] Technology Market 2019: Disruption Ahead, Josh Bersin, January 2019. Spend on HR Tech increased 29% from 2018-2019.

74% see spend for HR tech increasing


02
Cloud foundations are strong but not the full answer

HR leaders report strong business benefits from cloud-based HR systems that form the core of their technology portfolio. Seventy-two percent already have core HR applications in the cloud or are in the process of moving them.

Cloud users are more likely to report gains in productivity, improved employee experience and better workforce insights compared to those using on-premise solutions. 

Across the portfolio, administrative systems are most likely to deliver the benefits leaders expect. Benefits administration, for example, tops the list with 51% of respondents saying that they’re getting the benefits they expected from their implementation, 48% say compensation and payroll tools deliver, too.

Fewer say that their talent management and intelligence solutions are showing real value back to the business. Only 37% say their talent management solutions are delivering benefits to a “great extent.” That’s also true for workforce analytics (38%), workforce planning solutions (41%), and recruiting solutions (43%).

Solutions for these challenges require a different approach for engaging stakeholders because they:

  • Require business partners to work more closely with HR on workforce planning and strategy

  • Rely on digital mind-sets, behaviors and skills that teams may not have

  • Are often optional to use

Look at it this way: Getting individuals to enroll in benefits and participate in payroll is not hard and there are clear consequences for non-engagement. If someone “sits on the sidelines,” they don’t get pay or benefits coverage.

Yet when it comes to talent management or building digital skills the incentives to engage are more subtle. And if the work culture doesn’t support the change—people can feel left out, mistrusted, or they could work against change. 

As a result, getting reliable people data remains challenging. Just two-thirds of respondents say they’re able to provide their business partners with dashboards to optimize staffing based on analysis of hours, absenteeism, and overtime data. Even fewer, 39%, say they have dashboards that can give users the data that’s the most valuable—enterprise-level insight on which employees are critical for future success based on past performance, skills and competencies.

72% have or will have core HR applications in the cloud in 2020


03
The C-suite is happy, but users are not

Solutions that require partnering with the business require greater buy-in. They also need to be seamless and almost invisible, so that they fit into the demands of work. Yet our survey found a troubling disconnect over the perceived effectiveness of these tools. Managers who are expected to use them are two times less likely than the C-suite to say that they are effective on a range of business outcomes. 

End users are often right to have gripes about change, but this picture suggests executives are not putting enough emphasis on outcomes of transformation—the processes and the ways of work. Too often leaders evaluate these implementations as they would any IT project—they’re a success when they’re delivered on-time and on-budget. They don’t consider whether the tool delivers the intended business benefits or culture change. 

It’s a common story: People want a great experience, but the technology and the workplace experience aren’t working together. Supervisors in particular feel like their time isn’t managed better with technology at work, but instead gets pinched by the workplace technology they’re using.

Managers who are expected to use HR systems are two times less likely than the C-suite to say that they are effective on a range of business outcomes.


04
Companies struggle with adoption and change agility

In a true digital transformation, adoption of emerging technologies is just one part. The bigger goal is developing a workforce and culture that hone the types of relationships, behaviors and skills that speed innovation and bolster experience and the bottom line.

In our survey, only 27% rated HR tech as very effective for changing behaviors at work. Eight out of ten (82%) struggle with adoption challenges, most of which can be linked back to planning phases that miss getting all the right people in the room to answer the right question for change at scale.

Lack of preparation, not meeting user needs, unclear user benefits, and poor user experiences top the list of reasons survey respondents believe these technologies aren’t embraced.

While only a small number of companies use incentives (30%) and gamification (20%) to lift adoption rates, these two techniques were rated the most effective methods to combat low adoption. The two most common tactics—training and leadership communication—while important, should be delivered alongside these other tactics that make using digital technologies more enjoyable, even fun.

Adoption is just one part. The bigger goal is developing a workforce and culture that hone the types of relationships, behaviors and skills that speed innovation.

The bottom line

Answer the right questions. Start by getting all the right people in the room to make sure you’re answering the right questions before you choose a solution. As with any technology investment, success with workforce tech is determined by two things: whether the solution will solve a real business problem, and whether users are willing to make it part of how work gets done. 

Scale adoption with a human touch. Gamification and incentives, along with training and stakeholder commitment can go a long way toward convincing skeptics to get on board. You don’t have to change your culture, instead use your culture to strengthen your change management plan.

Put employees at the heart of switching decisions. That means involving end users when expanding or switching vendors. Letting employees see what’s driving the need for change can go a long way in preventing change fatigue.

About the survey

The survey was conducted in September 2019, by PwC Research. We heard from 600 HR and IT leaders from six continents. Sixty-one percent of the sample has C-suite and VP titles; 48% with $1 billion+ in annual revenue. Respondents represent a range of industries including technology, manufacturing, retail, and health services.

Contact us

Dan Staley

Dan Staley

Partner, HR Technology and Transformation Leader, PwC US

Christian Murray

Christian Murray

Partner, Global HR Transformation and Technology Consulting leader , PwC United Kingdom

Tel: ​+44 (0)7753 809483

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