Mineral’s 2023 State of HR Report Highlights Key Technology Gaps for Small Employers

HR and compliance leader’s third-annual report reveals where SMBs struggle most to modernize operations

Portland, OR – September 26, 2023 – Mineral, the HR and compliance leader for more than one million small to midsized businesses (SMBs), today announced the release of its 2023 State of HR Report. The report reveals that SMBs have successfully pinpointed their most pressing challenges for the future, and identifies where closing key gaps in technology investments could help them better meet those challenges, while driving greater performance and growth.

“Small business leaders understand the importance of being agile, especially as the business environment evolves rapidly and factors beyond our control create new challenges,” said Nathan Christensen, Mineral CEO. “Our survey findings underscore the urgency for SMBs to confront those challenges with the same spirit that helped them hurdle previous obstacles—by embracing modern strategies and bridging the gap between their current HR practices and the evolving expectations of the workforce.”

According to 2023 State of HR data, 76% of respondents are generally optimistic about their business outlook for the next 12 months. However, a closer look reveals that SMBs also are struggling to modernize operations to meet 21st-century challenges, particularly around enhancing HR and compliance tools related to people and productivity.

For example, nearly two-thirds of SMBs rely on spreadsheets and email to manage HR initiatives, Mineral finds. In addition, 32% of respondents use HR compliance software, even though 62% indicate they are only somewhat prepared to meet critical HR and compliance initiatives.

By comparison, less than half (49%) of State of HR respondents use or know about automation and technology tools, including artificial intelligence (AI), that can streamline HR operations and free up employees for more valuable tasks.

Among the barriers to adopting modern HR solutions, respondents cite:

  • Lack of knowledge about available technology solutions (40%).
  • Distrust in AI (36%). More than a third of State of HR respondents report disinterest in AI’s potential, and 74% are neutral about it or say using AI in HR solutions is unlikely.
  • Resistance to new technology (33%).
  • Lack of IT staff/skills (25%) as significant hurdles in embracing modern HR technology.

Business leaders responding to the State of HR survey also cite retaining and engaging existing employees (87%) and attracting new talent (57%) as the initiatives most critical for business success. However, economic concerns—mainly about persistent inflation and a potential recession—have led many SMB decision-makers to remain cautious about hiring: Only one-fifth believe they will meet their hiring goals this year.

Additionally:

  • 52% rate upskilling and reskilling employees as very important, yet 55% of SMBs report not having a formal training program.
  • Only 14% of respondents say improving workforce analytics is a critical HR initiative, despite the significance of recruiting. Analytics tools that track employee productivity, mobility, pay, and skill level can be a meaningful, unbiased way to identify and fill recruiting and retention gaps to drive greater business performance.
  • More than 80% of SMB employees continue to work exclusively onsite, even with data showing productivity gains from remote work. This data point—along with survey demographics indicating that many SOHR respondents work in industries that require an onsite workforce—suggests SMBs need to explore productivity strategies beyond work location.

“The 2023 State of HR Report underscores the importance of strategic investments that align with business goals,” Christensen said. “Embracing technology and innovation will not only enhance HR operations but will also serve to drive overall business success that can equip leaders with the tools to future-proof their organizations.”

The Mineral 2023 State of HR survey was conducted in partnership with leading technology research firm SMB Group. through a 44-question web-based questionnaire in May 2023. The survey captured the perspectives of 750 respondents representing businesses with 1 to 3,000 employees. Participants included HR professionals, business owners, presidents, CEOs, and partners who identified themselves as well-versed in their organizations’ HR and compliance initiatives.

Find full data and analysis from 2023 State of HR at trustmineral.com/state-of-hr.

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About Mineral 

Trusted by more than 1 million companies, Mineral is the HR and compliance leader for growing businesses. Mineral’s flagship solutions, including the Mineral Platform, Mineral Intelligence and Mineral Experts, combine data, technology, and human expertise to take the guesswork out of HR and compliance, and give clients peace of mind. Partnering with more than 2,500 industry-leading insurance brokers, health insurance companies, PEOs and HCMs, Mineral has built the largest HR community in the U.S. Mineral was formerly known as the combined entity of ThinkHR and Mammoth. For more information, visit trustmineral.com.   

About SMB Group

SMB Group is a technology industry research, analysis and consulting firm focused on technology adoption and trends in the small and medium business (SMB) market. Founded in 2008, SMB Group is recognized for thought leadership, research, and expertise in the highly fragmented SMB market—which is composed of many smaller, more discrete markets. Learn more at smb-gr.com.    

Media Contact 

Heather Willett 
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