Study: Spending on HR Technology to Hold Steady
The bottom isn’t falling out of the HR technology market, according to a recent survey from the International Association for Human Resources Information Management professional group.
Forty-two percent of the nearly 210 respondents reported that their human resources information technology budgets will remain the same in 2009 as in 2008, the association said in a release Friday, November 21. Another 21 percent of participants said budgets will increase by an average of 23 percent, while 37 percent said their budgets will decrease by a median of 15 percent.
“For companies in a good financial and cash position, they should take this opportunity to extend their market share and make long-term investments,” John Greer, senior vice president for HR and Development at Smart Financial Credit Union and incoming chair of IHRIM, said during a Web conference event Nov. 19. “Those without as much cash are waiting to see what happens. There is still a lot of uncertainty right now.”
As I’ve written about before, it’s not all black clouds and dour headlines when it comes to critical IT spending. There’s a tremendous amount of doubt and hesitation out there right now, but for those who have been conservative (from a business and personal perspective), there are opportunities out there right now that you may never see again. Whether that means you can squeeze a prospective HRIT vendor or take the overseas vacation of your dreams, chances are that if you have the cash and the immediate compunction to spend, you will land a phenomenal deal. And I’ve heard CIOs and VPs say as much, too.
But if you’re an HR software vendor, you could be feeling the pinch:
But there’s evidence HR software vendors are facing tougher going. This month, Kenexa said its third-quarter net income slipped by 24 percent to $5.4 million. Kenexa chief executive Rudy Karsan also said that during the last several weeks of the quarter, “the business environment deteriorated further and caused customers to pause as they evaluated how the changing economic climate would impact their business.”
Like everything else, changing economic times creates a different system of behavioral leverage. When things are booming, vendors have the leverage and are able to give shallow discounts as they work hard to meet demand. When things get tight, IT buyers have the edge because of the obvious oversupply scenario. It’s classic economics and behavioral psychology.
Still, for those looking to understand the landscape for 2009, consider this one more datapoint to help refine the picture.
