“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.”
Look, I as much as anyone would love to believe these findings, but let’s be realistic. If companies are letting employees go and are not meeting earning estimates by large margins, can those in the HR software industry be optimistic enough to assume these companies won’t spend any less money on HR technology? Sorry, but I don’t buy the results of the survey; no matter how much I want to.
When it comes to surveys it’s all about what questions are asked and how the replies are presented.
“42% of the nearly 210 respondents (nearly 210 respondents; does that mean 209?) reported that their human resource information budgets will remain the same in 2009 and in 2008, the association said in a release Friday. 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.”
So, I guess based on this information all of us in the HR software technology industry should breathe a huge sigh of relief. Not so fast my fellow HR industry pros. Let’s take a closer look at the question and the numbers.
I have a few questions:
1. Can we assume the responses of “nearly 210 respondents” provide an accurate outlook for what is going to happen with an entire industry? Would you invest your life savings on that assumption? How many people were the surveys sent out to? How many of those with drastically decreasing work forces and budgets were taking time to fill out the survey?
2. Would it be logical to assume for those 79% of companies who plan to spend the same thing, or less, on human resource information budgets, that they are going to simply continue to pay annual support on their existing products instead of actually budgeting for new purchases?
3. From the numbers, it looks to me like only 21% of the respondents are going to have increasing budgets for spending on new products and services. 21% does not sound like the industry will hold steady, not even close. But then I don’t know what the numbers look like for last year or the year before that.
So what’s my opinion?
Based on the thousands of visitors we see on CompareHRIS.com and the hundreds that take time to fill out our HRIS selection tool, HR professionals are still looking for HR Management Software. We have seen, however, their expected time lines to make decisions are further in the future. I would expect that the HR Information Systems and HR Management System industries may not see as much of a drop off as performance management or recruiting software services and applications. For many companies, HRIS and Payroll software is more likely to be seen as a necessity than other systems which may be viewed as luxuries; hence, un-needed expenses in a slowing economy. CompareHRIS.com planned to add product groups for performance management and recruiting software solutions to the site this quarter, but based on the above assumptions, we have decided to hold off for two months to see what the economy looks like before making this added investment in the site.
I think the stock prices of Ultimate Software, Paychex, and ADP will provide the truest sense of how the HR software industry will fare through this recession. We will post stock reports for these companies as they are released.