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Companies Doing Fewer Big Upgrades of Workforce Technology

November 17, 2004
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A new report by the Cedar Group shows that "organizations are doing fewer major upgrades and are instead focusing on implementation of new human capital management modules such as performance management, learning management or analytics."

The Cedar data shows that growth of tech spending slowed in 2004 to a 6 percent overall increase, down from the big jump between 2002 and 2003 of 27 percent.

The Cedar Workforce Technologies Survey involved 396 organizations representing nearly 9 million employees. It finds that analytics applications (such as reports showing turnover rates among employees who produce the most revenue) are the fastest-growing technology area, up 30 percent from 2003.

Analytics is technology that has been around for a few years but "is just now starting to take off," says Alexia Martin, Cedar’s director of research and analytics. "I think that organizations first had to come to some level of administrative excellence with their core record-keeping systems, and then come to service delivery excellence with self-service, but now they can come to performance excellence with the introduction of workforce analytics.

"The technology now exists for organizations to implement workforce analytics such that they can analyze workforce data against organizational trends, business goals and benchmarks and get a handle on a future course of action to improve things like revenue, expense reduction, customer satisfaction."

Other findings from Cedar:

  • As in prior years, the primary barriers to successful technology projects are inadequate budgets, the inability to show the potential payback and inadequate internal resources.

  • Fewer people are measuring the results of their self-service technology projects. This is probably because many implementations have been in place for four to five years, and the big payback--and perhaps the best time for measuring ROI--is in the first couple of years.

  • Companies with "simple management reports"--such as headcount and absenteeism reports--have higher operating income growth than companies that aren’t generating such reports. Also, firms using skills-management reports showing which employees have and need certain skills enjoy higher operating incomes than firms not generating such reports.

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