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Home / Blog / HR Tech: Where to Invest, Upgrade, or Cut Back in 2025

HR Tech: Where to Invest, Upgrade, or Cut Back in 2025

Should you continue to invest, upgrade, or cut back your HR tech spending?

J.R. Johnivan
Business and HR Tech Journalist
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Panelists for a virtual event about HR tech strategy.
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With 2025 right around the corner, Phil Strazzulla, founder of Select Software Reviews, conducted a panel discussion to talk about recent investment trends in HR tech, which systems are worth upgrading, and where you can cut back on the amount of HR tech you’re currently using.

Phil was joined by Jeremy Lyons, creator of a RecOps-in-a-box framework, and Jackson Lynch, Workforce Executive Council Member with CNBC and Executive VP and CHRO at Sunnova, to talk about their latest insights and forecasts for Q4 2024 and beyond.

Watch the full event recording here.

In This Article


Investing in AI

“We’re still seeing really big advancements in AI.” – Jeremy Lyons

And the numbers agree. Per the KPMG AI & Digital Innovation Quarterly Pulse Survey, 44% of organizations are done with the initial experimentation phase of AI and are now focused on optimizing their AI strategy. The study continues to show that 80% of organizational leaders recognize the competitive advantage and market share offered by AI and, in particular, GenAI. Finally, 73% of organizational leaders already plan to recruit new board members in their pursuit of GenAI implementation for Q4 2024 and beyond.

While organizations will continue to invest in AI throughout 2025, not all of these implementations will be successful. According to research released at the 2024 Gartner Data and Analytics Summit, at least 30% of GenAI projects will be abandoned between 2024 and 2025. The primary reasons include concerns over data quality, risk controls, and cost-effectiveness.

Remember, your AI investments aren’t strictly monetary. By putting the necessary time into AI and training your staff on how to effectively use these next-gen tools, you’re also making investments into their future and into the future of the company as a whole.

Statistics on the ROI of AI implementations in organizations.

How AI is Changing Analytics

“When people are looking at analytics, I think people are trying to find engagement and call outputs – not necessarily just sentiment analysis.” – Jeremy Lyons

It’s one thing to know what your customers are thinking or feeling, but it’s an entirely different process to measure their activities, respond to trends or patterns, and increase engagement. While extracting this data once required the expertise of a seasoned data analyst, next-gen AI language models have made this information available to virtually anyone in the organization.

For those who aren’t aware, language models are used to help AI process the human language – whether it’s spoken or typed. Instead of depending on specific keywords or technical prompts, however, these language models are capable of analyzing natural speech patterns and responding appropriately. This makes it easier for the average person to access advanced datasets and analytics while also making it easier to read and interpret the results.

“Large language models really have an opportunity to do two things that are different. Number one, you can actually democratize access to data by allowing people that don’t have SQL [structured query language] training to ask a question in the way a normal person would ask a question.” – Jackson Lynch

But AI isn’t only affecting analytics. When used to its fullest potential, AI is capable of revolutionizing other processes, too – include recruitment operations.

“The second thing it does is it allows a lot more innovation when it comes to thinking about things. For example, in the talent acquisition space, most people talk about recruiter performance around time-to-fill. That is such an old way of managing it and it’s historically based on recruiters that wanted to get a number they felt good about.” – Jackson Lynch

Under the old system, recruiters were more concerned with meeting quotas and minimizing their time-to-fill. Thanks to next-gen AI, it’s much easier to focus on day-to-day successes, individual achievements, and overall engagement.

“We’re starting to see a lot on the ATS side – that incorporation of the natural language processing to find specific information. I know Ashby’s has theirs built-in when it comes to certain elements of reporting and certainly with the release of their AI sourcing.” – Jeremy Lyons

Upgrade ATS & CRM Platforms

You might also consider upgrading your current HR software between now and the end of 2025, including your ATS and CRM services. But with so many solutions available today, the process of finding the right platform is more difficult than ever.

“When I’m looking at tools, one of the key things that I want to see is how well are they listening to their customer base and pushing out those updates?” – Jeremy Lyons

According to SugarCRM’s 2024 State of CRM Report, most CRM implementations fail because of one or more common problems:

  • 41% say integrating CRM software into your existing tech stack is a challenge
  • 40% cite platform limitations as the biggest obstacle
  • 37% indicate a lack of internal knowledge as their biggest hurdle

When looking forward to 2025, it’s safe to assume that many vendors are doing their best to remedy these issues. Not only are vendors beginning to realize that they need to evolve in order to maintain competitiveness in a highly saturated market, but they’re also realizing that organizations want an all-in-one platform that is accessible and easy to use. They’re also starting to understand that a large part of the industry is already turned off from CRM and ATS software based on their past experiences while the technology was still in its infancy.

“I think if you’ve been in this industry for a while you’ve been burned. But there is a new breed of vendor that has emerged in the last 10 or so years and they’ve pushed the incumbents a little bit to do better.” – Phil Strazzulla

Established vendors are being challenged by some of the industry newcomers – and it’s definitely for the better.

Making the Most of Your Current HR Tech Stack

With CRM and ATS platforms continuing to add extra features and functionality, these systems are increasingly being branded as all-in-one platforms. It’s not uncommon to see an ATS introducing CRM functionality, or vice versa, and a lot of HR software already has support for integrating third-party apps and services that add even more features to the base package.

That’s why it’s worth exploring the software in your current HR tech stack to ensure that you’re making the most of the tools you already have. Considering that some platforms add new features on a monthly or even weekly basis, it’s important to keep up with the latest news and updates surrounding your chosen software before looking for an external solution.

“We talk to teams all day long to help them figure out what tech they should buy, and we ask them: what’s the existing stack look like? Did you know this tool can do that? Did you know that your HRIS has a module? It might not be as powerful as some dedicated tool, but it might be good enough for what you need.” – Phil Strazzulla

Again, the numbers back this up. According to Sapient’s 2024-2025 HR Systems Survey, only 15% of respondents know about the AI functionality of their current HRMS. This leaves the majority of current HRMS users in the dark when it comes to some of the more advanced features of their software.

Even if you do find the perfect solution outside of your current HR tech stack, it can be difficult to convince others to make the switch. There will almost always be detractors who resist change, especially if they’re already comfortable with the current software. As a result, it’s usually easier to convince stakeholders to explore features that have been recently added to your current platform rather than convince them to adopt a new system and disrupt the whole tech stack.

“Oftentimes people don’t want to adopt something because they think it’s going to be more work or that changes are scary.” – Jeremy Lyons

Cut Back on Unnecessary HR Tech

Now that you’ve identified where to invest, what to upgrade, and how to maximize the technology you already have, it’s time to find out how you can cut back on unnecessary HR tech.

“One of the things I’m always amazed by is that you forget the stuff that you’re paying for. The number one thing is to sit down with your CFO and understand those costs.” – Phil Strazzulla

The CFO should have a complete picture of HR tech spending, so they’re the best one to show you where the budget is going. According to Phil, simply taking some time to pinpoint unnecessary HR tech, owning up to the bad purchase, and taking the steps to rectify the situation will benefit everyone in the organization.

After meeting with the CFO, you’ll be able to take your findings and paint a clearer picture for stakeholders and other organizational figureheads. You’ll be able to identify specific bottlenecks, determine which HR tech to drop, and propose a real solution to maximizing your HR tech spending.

“Now people don't just sort of see you coming in and saying, we need more people. They see you coming in and saying, okay, as a business relative to the revenue, this is how much of that revenue we're trying to occupy. We're trying to make sure that we are maximizing every dollar that you're putting into us.” – Jeremy Lyons

Balancing Innovation With Cost Efficiency

“If you think about how to leverage AI and automate, and you think about how to prioritize experience and adoption rates, you can effectively balance innovation with cost efficiency while delivering exactly what your business needs.” – Jackson Lynch

Finally, it’s important to balance innovation with cost efficiency. While you might be tempted to buy into the latest and greatest HR tech, it might not be the best choice in the long-term. Not only will it take time to integrate a new platform into your existing tech stack, but your current vendor might update their software with the latest and greatest features in the meantime. In this case, it might be beneficial to wait it out – but for how long? Perhaps even more importantly, how do you know what new innovations are out there if you remain dedicated to one platform?

“I would encourage you to do one or two demos of new emerging technologies on a monthly basis. Even if you’re not in the market for the latest and greatest sourcing tool, it’s interesting to sit in on these and just kind of see what these companies are doing.” – Phil Strazzulla

Product demos are a great way to explore your options without having to dismantle your current HR tech stack or commit to a purchase. They can show you which features you’re currently missing, which features you don’t need, and if there might be any new functionality coming to your current ATS, CRM, or HRMS platforms in the future.

Bottom Line

Since many organizations have progressed beyond the initial AI experimentation phase, now is a good time to revisit your AI strategy and identify where you should invest, which systems you should upgrade, and where you can cut back. Doing so effectively makes it easier to maximize your current HR tech stack while freeing up valuable resources that can be allocated elsewhere in coming weeks, months, and years.

J.R. Johnivan
Business and HR Tech Journalist
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Combining a lifelong love of technology and the written word, J.R. is constantly balancing traditional arts with next-gen breakthroughs and advancements. With 30-plus years of experience working with computers and IT of all kinds, including over a decade of reviewing HR software, he caters to audiences all around the globe from his quaint home in West Michigan.

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