Despite High Adoption, HCM Systems Fail to Deliver on Satisfaction and ROI

February, 2025

Despite widespread adoption, disappointing satisfaction and return on investment (ROI) levels plague many human capital management (HCM) implementations. HCM is a core function, but many organizations struggle to realize the full potential of these systems. The gap between the promise and reality of HCM systems often arises from a disconnect between the system’s capabilities and the organization’s strategic efforts. Without effective change management and a focus on user-centric design, these systems can become overly complex, failing to address the core needs of HR professionals and the broader workforce, which ultimately hinders the achievement of key business objectives.

While the initial investment in an HR/HCM system can be significant, in theory, the long-term benefits in terms of cost savings, improved productivity, and better workforce management can outweigh the initial costs. However, as seen in Figure 1 from our full report, HR/HCM Adoption Trends and Customer Experience, despite HCM systems having a high adoption rate, three other metrics—investment, ROI success, and TCO success—remain moderate. And, more concerningly, overall customer satisfaction is low relative to other technologies in our annual study.

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We define an HR/HCM system as an integrated suite that serves as the system of record for human resources (employees, contractors, applicants, and other personnel) and supports HR management processes. HR/HCM systems typically include functionality for payroll, the HR department, benefits, time/absence reporting, worker scheduling, workforce planning, recruiting, learning management, career development, workforce analytics, and related people management systems.

HR/HCM systems can offer several key advantages but to fully realize its potential benefits, organizations need to carefully evaluate their implementation strategies, prioritize training and user experience, and effectively measure the ROI.

“HCM systems boast high adoption rates, yet their true value remains untapped,” said Asif Cassim, principal analyst for Avasant Research, based in Los Angeles. “Organizations need to carefully evaluate their needs, choose the right system, and implement it effectively to achieve desired business outcomes.”

Managing human resources is an important aspect of organizations, and investing in human capital management systems optimizes hiring, training, and workforce management. While companies might imitate best practices from competitors, recruiting, developing, and retaining top talent is a sustainable, competitive advantage. Building and maintaining a world-class HCM system can be an important element in this goal.

Our full report quantifies the current adoption and investment trends for HCM technology and the benefits driving companies to expand their HCM implementations. We assess these trends by organization size, sector, and geography and look at the ROI and TCO experiences of organizations that have adopted HCM. We conclude with practical advice for those planning new investments in HCM.


This Research Byte is a brief overview of our report on this subject, HR/HCM Adoption and Customer Experience, The full report is available at no charge for subscribers, or it may be purchased by non-clients directly from our website (click for pricing).