I\u2019ve put a lot of faith and hope in businesses as the economy continues to trend downward.\u00a0 I had initially thought that this time around we would be smarter.\u00a0 Smarter than in 2001 when the bubble burst and HR technology spending almost completely stopped for 3 years.\u00a0 In that time, there was virtually no growth in development as there were no sales to fund it.\u00a0 But this time would be different.\u00a0 We were smarter, and would continue to spend on our infrastructure, not allowing a pessimistic view of the future to delay our long term strategies or the enabling technologies that preceded strategic fulfillment.<\/p>\n
I think I was wrong.<\/p>\n
Perhaps my being wrong has nothing to do with our NOT being smarter.\u00a0 Perhaps we had every intention to continue to prepare our HR infrastructure.\u00a0 But that fact of the matter is that cash is tight.\u00a0 Nobody is lending money, and few people are making enough money to spend freely.\u00a0 With that, HR budgets are being reigned in and once again, HR technology spend is down.<\/p>\n
The money multiplier is a simple macroeconomic theory.\u00a0 For every actual dollar (unit of printed currency) in circulation, there is a multiple of that dollar that becomes a portion of GDP.\u00a0 For example, if HR has 1 dollar to spend on software, a software vendor will in turn spend a portion of that dollar on R&D, which in turn may go to HR consultants, etc.\u00a0 The idea I\u2019m trying to put forth is that in a good or bad economy, the money multiplier fuels the HR industry.<\/p>\n
The problem is that in a good economy, the HR industry has funding from corporate budgets.\u00a0 In a bad economy, HR budgets are cut to the bare bones for continuing basic operations.\u00a0 HR is not a self funding industry \u2013 we rely on the rest of the enterprise to provide is with the cash we need to fulfill our objectives.\u00a0 Without cash from the enterprise, the entire industry goes into a lull.\u00a0 Without the seed cash from the enterprise, the money multiplier stops working.<\/p>\n
I\u2019m not sure what happens next.\u00a0 We know that the applications providers have been doing some massive layoffs.\u00a0 We know that sales are slowing.\u00a0 We know that consulting operations for both the vendors and traditional consultancies is slipping.\u00a0 What we don\u2019t know is how quickly the enterprise will start fulfilling our budget requests when cash starts to flow again.\u00a0 I\u2019m still hoping that even if we don\u2019t continue spending right this minute, that ultimately we are smarter than last time.\u00a0 Let\u2019s get in front of budgets and make sure there isn\u2019t a 3 year lag before HR spending comes back.\u00a0 Let\u2019s make the case now that our priorities are still enterprise priorities and can\u2019t wait until 2012 to get started again.<\/p>\n","protected":false},"excerpt":{"rendered":"
I\u2019ve put a lot of faith and hope in businesses as the economy continues to trend downward.\u00a0 I had initially thought that this time around we would be smarter.\u00a0 Smarter than in 2001 when the bubble burst and HR technology…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[33,47,8,2],"tags":[],"class_list":["post-1051","post","type-post","status-publish","format-standard","hentry","category-finance","category-governance","category-strategies","category-hr-technology"],"_links":{"self":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/1051","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1051"}],"version-history":[{"count":1,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/1051\/revisions"}],"predecessor-version":[{"id":1052,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/1051\/revisions\/1052"}],"wp:attachment":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1051"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1051"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1051"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}