UKG, a leading provider of HR, payroll, workforce management, and culture solutions, in collaboration with HR.com, the largest network of HR executives, has released new research on HR technology adoption among small to mid-sized businesses. The study reveals that a significant portion of these businesses are either using minimal HR technology or are at a foundational level, potentially jeopardizing their long-term success.
- Limited HR Technology Adoption:
- More than one-third (36%) of small to mid-sized businesses use only foundational HR systems or none at all, focusing primarily on payroll and record-keeping.
- Impact on Business Success:
- The research highlights that failure to invest in advanced HR technology can have long-term costs, with smaller businesses struggling to retain talent (60%) and hire qualified employees (56%).
- Current Focus Areas:
- Key HR areas for these businesses include recruitment, selection, and onboarding (64%), benefits administration (55%), HR administration and employee records (52%), and employee relations (51%).
- Challenges Faced:
- A quarter (24%) of organizations do not track HR key performance indicators (KPIs), and about one-third (36%) focus primarily on back-office tasks rather than people-focused initiatives.
Expert Insight:
- Julie Develin, Senior Partner, HCM Advisory at UKG:
- “HR professionals at small and mid-sized businesses need intuitive technology to stay organized and compliant. Efficient and easy-to-use HR technology can help lean HR teams engage their people and drive business success.”
Best Practices for Improvement:
- Evaluate and Upgrade:
- Begin with an evaluation of current HR operations to identify areas where technology can enhance services and efficiency.
- Strategic Investment:
- Invest in HR technology aligned with business priorities to improve operational efficiencies and manage compliance.
- Leverage Employee Self-Service:
- Introduce self-service options to reduce administrative duties and empower employees with easy access to their information.
Report Highlights:
- Advanced Technology Adoption:
- Despite 36% of businesses being at a foundational level, 27% are at a strategic or advanced level, utilizing technologies like employee self-service portals (82%), HR information systems (78%), and onboarding systems (71%).
- Goals for Technology Use:
- More than half of the respondents aim to increase HR efficiency (69%), improve service to employees (60%), and enhance overall HR services (50%) through technology.
The report underscores the critical need for small to mid-sized businesses to invest in and leverage advanced HR technology to remain competitive, enhance efficiency, and support employee engagement.