HR Leaders’ Investment Priorities for 2023 According to a Gartner Study

According to a study conducted by Gartner, nearly half of HR leaders state that HR technology is their primary investment priority for 2023. The other three areas where HR leaders intend to focus their investments this year are recruitment, employee rewards, and learning & development.

Investment Trends Preferred by HR Leaders in 2023, According to Gartner

1. HR Technology – 46%
2. Recruitment – 45%
3. Employee Rewards – 41%
4. Learning & Development – 41%
5. Diversity, Equity, and Inclusion (DEI) – 36%
6. Talent Analytics – 33%
7. Talent Management – 31%
8. Organizational Development – 27%
9. Payroll and Personnel Administration – 23%

Key Investment Directions for Cost Optimization and Growth

To optimize costs and drive growth, HR leaders are focusing on four main investment directions this year:

1. HR Technology

Among the 118 HR leaders surveyed in the Gartner study, 46% plan to increase their HR technology budget this year. This marks the second consecutive year that HR technology is seen as the top investment priority by HR managers. Lower costs and process efficiency in HR departments are the primary objectives behind these investments in HR technology. Additionally, automating and digitizing various HR processes aims to meet the growing demands of evolving and expanding organizations.

2. Recruitment

To attract the right talent, many companies are enhancing their recruitment processes by investing in the latest technologies in the field. The intense competition for talent in 2022 has been the main driver for this development in the recruitment area. The Gartner study reveals that artificial intelligence (AI) will play an important role in recruitment this year, as more HR leaders plan to use technology to attract, evaluate, and select candidates for available positions. This approach is expected to reduce both the time and cost of the recruitment process, as well as provide greater flexibility for employees. In addition to focusing on attracting valuable candidates through technology, organizations will also pay attention to onboarding, aiming to meet the increasingly high expectations of new employees.

3. Employee Rewards

Employee rewards rank third in HR investment priorities. With rising inflation and the consequent increase in the cost of living, HR leaders plan to place greater emphasis on employee rewards this year. This is challenging, as many companies are considering cost reductions. According to Gartner, HR managers aim to focus on employee recognition and performance reward programs, as well as well-being programs. Investments will be made in various technologies for planning benefits and bonuses and tools for monitoring employee stress levels. Additionally, HR leaders will emphasize pay equity. More HR managers plan to implement salary transparency practices for both employees and candidates.

4. Learning & Development

Gartner research shows that less than half (45%) of employees feel they have developed their skills and capabilities at work. The need for employees to acquire new competencies is strongly felt in today’s labor market, and HR leaders aim to take on the role of enhancing employees’ skills and knowledge. To achieve this, they are willing to invest in solutions for managing employee competencies, AI-based learning platforms, training tools using virtual reality, and coaching applications.

The study was conducted in October 2022 and involved interviews with 118 HR leaders.