Today’s workplaces are going through a massive transformation, and Human Resources teams are bearing the brunt of many of these organizational shifts, tasked with addressing everything from historic staffing shortages and retention issues, to building new policies for a hybrid and remote workforce.

Nearly two years into the COVID-19 pandemic, HR leaders are stressed out. According to Lattice’s State of People Strategy Report 2021, among those who said they are emotionally exhausted, 67% said they were overworked and 41% said their department was understaffed. And 45% said that, with the uncertainties of the pandemic, it’s impossible to plan for what’s next. 

This year, on top of all that uncertainty, Human Resources departments still have to accomplish the usual HR tasks required to close out 2021: benefits administration, tax compliance, and year-end payroll, among others. As Human Resources leaders look toward 2022, they should also be looking at HR software that can support their work and help alleviate some of the new and emerging demands on their teams. 

The right engagement, performance, and employee development tools, after all, can strip away busywork so HR professionals have more time to focus on the strategic work of staffing and retention and boosting employee morale. If you’re in the process of evaluating, purchasing, or renewing HR software, here’s why you should act now to ensure you have a platform in place by January 1.

6 Reasons You Need to Invest in a People Management Platform Before the Year Ends

1. Money is on the line.

For plenty of tech purchases, the timing is simply a matter of the calendar. In many companies, the fourth quarter is when new-year budgets are approved. Now is the time for Human Resources departments to seek funds for HR software.

“Whether it’s HR software or anything else, people are making their case for their 2022 budget now and going toward the end of the year,” said Jessica Donahue, founder of HR consulting firm Adjunct Leadership Consulting. “If you’re in a company that functions that way and you wait until March, you’re not going to get the capital approved for that project until the end of 2022.”

Another reason to put down money on a People management platform ASAP is if you have money that was earmarked for 2021 that’s left over. If you don’t spend it now, your department’s budget might get cut for the coming year. 

“If, as a manager, you leave some unspent budget at the end of the year, [your supervisor will think] you asked for too much, so next year, you’re going to receive less,” cautioned Dragos Badea, CEO of Yarooms, a hybrid work platform.

2. It’s time to set goals and strategic plans.

The end of the year is a natural time to take stock of which goals were met and set new objectives. “Any management process starts with planning and ends with monitoring and closure,” said Nevena Sofranic, CEO of recruitment platform Recrooit. “It’s the same thing with HR. The strategic HR planning process begins with assessing current staffing, then projecting future staffing requirements based on company goals.”

In the first quarter, HR teams might be focused on assessing current conditions, such as 401K limits, vacation days, and other administration tasks, Sofranic said. By the fourth quarter, they’re reviewing key performance indicators (KPIs), employee performance, hiring plans for the coming year, and other new objectives, including determining which HR tools will help them attract, engage, and retain talent going forward. 

“The end of the year is the opportunity to use data to create goals and make demands for any department, especially for HR,” Sofranic said. “At the end of the last [quarter] of activities, you can see the results of the lack of investment and the rise of new needs from within the company.”

3. You’ll build a full year of insights.  

Voluntary turnover, performance reviews, and employee engagement rank as HR leaders’ top three key performance indicators, according to Lattice’s State of People Strategy Report 2021. And People management software can help tackle those challenges — providing employers with the ability to more effectively monitor employee performance, set performance goals, offer feedback, and track and bolster employee engagement.

With January 1 software launches, HR teams can begin to execute against any newly defined processes on day one, Donahue said. At the same time, at the end of 2022, they’ll gain a full year of data to evaluate their own progress and how well employees across an organization have done. Those metrics will help HR teams determine if their own KPIs have been met and what pay raises employees have earned.

“Typically, merit increases, which are based on reviews, are decided on and given in December and then they hit everyone's paychecks in January for that new year,” said Donahue. “You want and need a full year of performance data to look back on to inform your merit increase decisions.”

It’s possible, of course, to implement a performance management system in the middle of the year. But Donahue noted that the cascade of tasks that are triggered when new goals are set makes the beginning of the year the optimal time to implement a new system. 

“When you think about goal-setting, the organization should set its high-level goals with everyone for the year,” said Donahue. “They should share those with managers. Managers should set team goals and share that with their people, so that their people can set their individual goals...It’s just cleaner to do it in January.”

4. It’s a natural time to start something new. 

Plenty of us plan for a “fresh start” at the beginning of a new year. And just as we set New Year’s resolutions to exercise more or start a new hobby, we also may be more receptive to new workflows and initiatives on the job. 

“Traditionally, this is the time of year when new sweeping initiatives are planned for the upcoming year and when old and underperforming initiatives are shuffled off,” Badea said. “It makes sense that you’d want to lock down any major HR purchase at the tail end of the year, so you can roll it out fresh in the new year while everyone is still in their New Year’s resolutions phase.” 

Donahue agreed that teams and individuals are in the mindset for change when the new year turns. “It’s that time of year where everybody is expecting something new,” she said. 

5. It’s never been easier to prove the ROI.

Attrition is costly. According to a 2019 Gallup report, US businesses were losing $1 trillion a year because of voluntary turnover. Two years later, during the so-called “Great Resignation,” the quit rate has reached historic highs, the US Bureau of Labor Statistics (BLS) reported. 

According to Lattice’s State of People Strategy Report 2021, more than half of respondents said that employee turnover was slightly higher or significantly higher than it was six months before. And 55% of respondents said employees were quitting because other employers were offering them more money — the top reason for turnover. But other factors are at play, too, including career reevaluation, burnout, and employees not seeing opportunities for advancement.

“Anything that you’re doing as an HR person that affects how people are paid, recognized, [and] rewarded [and] how they are communicating with their manager over the course of the year — all of those things increase engagement and are part of performance management,” Donahue noted.

People management platforms can help employers respond to these challenges. They provide templates for managers to give constructive and continuous feedback during the review process and throughout the year. They offer a single portal where employees can find their reviews, manage feedback, and store their OKRs and goals, so they can monitor their progress and look for ways to advance. And People management platforms facilitate an ongoing dialogue with employees through employee engagement surveys and one-on-one feedback, giving managers all the information and metrics they need to identify flagging engagement that might signal an employee’s desire for a career or job change — so they can take action to improve the situation before the employee leaves. 

It’s no surprise that among the best-performing HR teams, according to the Lattice survey, 60% were using performance management software in the last year to support employee performance reviews, goal-setting, and feedback.

6. It’s time to evolve your HR practices.

Remote and hybrid work is here to stay, and it’s introduced plenty of new challenges for HR management. According to Lattice’s People Strategy Report, 60% of HR departments don’t expect to see any big change in the number of employees who continue to work remotely in the next year. But, respondents said, the greatest hybrid workplace obstacles for employees are feeling disconnected from the organization and the ability to communicate with team members and other employees.

HR software can help. People management platforms, for example, ensure a regular cadence of communication between employees, coworkers, and managers, so everyone stays connected to the organization, remains steeped in the company culture, and can be steered toward talent management opportunities. 

With distributed workforces, “it’s impossible to enforce previously considered standard HR processes,” Badea said. “They need to evolve.” 


When it comes to workforce management today, retention and employee experience are hot-button issues. People management platforms provide the foundation that today’s employers need to keep workers engaged — and wanting to remain at your company. 

Looking for your own fresh start? On average, it takes companies six to eight weeks to select HR software. Get a head start in your search by scheduling a Lattice demo today.