What does the economy mean for HR tech spending?
When the economy slows down, companies start looking for ways to tighten the belt. Does that mean they’ll start to cut back on HR technology spending – and, more importantly, should they?
According to a recent Gartner survey, IT budgets overall have gone down a bit, but are still fairly stable. About two thirds of the companies surveyed (65%) said their tech spending should be the same in 2008 as it was last year. For 10%, budgets have increased. For the rest, the budget went down, by an average of about 10%.
Holding steady
For HR tech items like HRIS systems, talent management and recruitment software, etc., so far, there isn’t much evidence that companies are putting those projects on hold. (Read more about that here.)
Why is that? Mostly, it’s for the same reasons companies are reluctant to cut their overall spending on technology:
- Tech spending adds value (at least it should), and that becomes even more important when the economy’s uncertain. In addition to saving HR time, technology can help increase retention and recruit better workers, for example
- For the most part, IT departments have already learned to spend money wisely, and it’s unlikely they’ve been spending much on things that don’t add value to the business.
Getting the most
In other words, there’s a reason companies spend money on technology, and it isn’t because they have extra money lying around.
But when times are tight, experts the key is spending smarter, not necessarily spending less. Here are some things IT and HR pros can do to help get the most out of a tighter HR tech budget:
- Hold off on non-critical upgrades. Unless it’s free, or fixes some huge problem, having the latest version of whatever software you’re using isn’t always worth the money.
- Explore thoroughly. The more you shop around, the better a deal you’ll get. Specifically, look for scalable, pay-as-you-go options and think about what features you need before you start looking. A lot of HR systems come with bells and whistles that many companies don’t have much use for.
- Involve the check-signers. One way to convince higher-ups that spending money is worth it might be to get them involved in as many stages of the process as possible. For example, if you view product demos, show them to higher-ups. It’s easier to approve funding for something if you understand what it does.
