buying HR technology

8 mistakes to avoid when buying HR technology

As your business grows, so do your human resource needs. Using HR technology to automate repetitive processes (such as payroll, onboarding, time-tracking and benefits enrollment) can relieve some of your business’s administrative burden and free up more time for revenue-generating activities.

But how can you be sure you choose the right software or platform for your business?

Comparing vendors and software is a complex endeavor, and one that will require time and energy from multiple stakeholders. However, you can simplify the selection process by avoiding these eight common mistakes.

Mistake #1: Fixating entirely on price

While price is important, it shouldn’t completely dictate your decision. You must also keep in mind the following:

  • Get granular in your comparison: Focusing solely on one or two aspects of a particular solution doesn’t provide a holistic view of whether it will meet your company’s needs. It’s important to consider all features and functionality, and the total cost for everything you’ll need. This approach makes it easier for you to compare different platforms and systems that may have different features and pricing models (a la carte vs. flat fee).
  • Consider time savings: Decreasing the number of hours employees spend on HR tasks each month allows them to dedicate more time to growing your revenue and your business. A comprehensive, best-of-breed solution will automate and integrate your processes, increasing productivity and accuracy, while streamlining your HR operations across the organization.
  • Re-evaluate your definition of cost: The total price may be more than the initial or monthly cost. For instance, is there an extra charge for W2s or per payroll cycle? Or is there one flat fee that covers everything from five to 50 payrolls? What about maintenance and upgrades? Examine what each solution’s price package entails.

Mistake #2: Skimming the fine print

It’s easy to be swayed by vendors who seem to promise the moon for a low upfront price.

However, a vendor with a lower implementation fee could end up costing you more in the long run. If you have to pay extra for services that may come standard with a competitor, it’s probably not such a good deal after all.

For example, is there limited storage for your HR data? If your HR system’s storage capabilities don’t grow with your business, you’ll probably end up paying to upgrade or customize your software to be able to store all employee data within the system. This can add up to a major expense over time, especially if your business is consistently growing.

Understand what’s being offered in the proposal. Be sure to detect any hidden costs before you reach an agreement.

Mistake #3: Unrealistic expectations

You will be hard pressed to find a one-size-fits-all integrated HR technology solution. For example, if your business requires highly specialized functionality, like ERP-level job pricing, you’re probably not going to find a single, comprehensive HR technology platform that provides 100 percent of everything you need. And that’s okay. It doesn’t mean you can’t find a comprehensive platform that meets most of your needs. You just may need an individual solution for your ERP-level job pricing.

Be aware of this as you start your search, and look for the solution that best serves your biggest challenges. Also, ask prospective vendors if their platform will allow for some level of integration with any individual solutions you may need.

Mistake #4: Getting caught up in the bells and whistles

Establish your must-haves and nice-to-haves, and know the difference between the two. It’s easy to get so excited about those really cool “bonus features” that you lose sight of your priorities.

For instance, if your biggest issues are payroll and new hire paperwork, then your priorities should include payroll processing and paperless onboarding. Bonus features might include performance management or retirement services. Those are your bells and whistles, your nice-to-haves that aren’t absolutely essential.

You’ve got to have laser focus when it comes to the challenges you’re trying to overcome with a potential HR technology solution. Anything extra is exactly that – extra. Getting the big things right is always most important.

Mistake #5: Not asking the right questions

Buying the right HR technology is a lot like hiring the right job candidate. You’ll want to interview several prospective vendors and ask strategic questions about their software and service before you commit to one. After all, you’re spending your company’s hard-earned dollars, so be picky. Have a list of questions ready, and then find out how well a particular solution delivers in each area.

Here are a few questions you might consider asking:

  • What’s the total cost, and what does that include?
  • How do you bill? Do you offer a flat fee that covers everything, or will we have to pay extra for additional services after implementation?
  • Is your software or platform scalable as our business needs change?
  • What’s your system’s average run time? What percentage of the time is it down?
  • Do you provide a dedicated service team we can contact directly, or will our issues be handled by a random call-center agent?
  • How often do you upgrade your software, and is this included in the price?
  • How will you ensure compliance as employment laws evolve?

Mistake #6: Not requesting references from existing clients

What are current clients saying about the vendors you’re considering? How well they’re serving other companies is a pretty solid indicator of how well they’d take care of your company.

Ask if you can contact existing clients to speak with them about their experience. Understanding the strengths and weaknesses of a prospective vendor or software, and how they might impact your organization, will help you make an informed decision.

Watch for red flags such as unresponsive service or software glitches.

Mistake #7: Rushing your decision

It takes time to find the best HR technology solution for your business.

Rushing through the selection process can lead to more headaches and expenses down the line. If you don’t get it right the first time, you’ll end up spending more time and money looking for another solution.

Take your time. Do your due diligence. Don’t feel pressured to make a decision before you’re ready. Compare a variety of options and then narrow them down to a couple that meet your criteria. Next, you’ll want to drill down on the features and benefits of each system and measure how they stack up against all your needs and wants.

Mistake #8: Not getting buy-in from employees

Involve the employees who will ultimately be using the HR technology solution to help you decide. They experience your business’s HR pain points firsthand and are equipped to assess whether or not a proposed solution will resolve them.

For example, your HR team is better qualified to determine which of the comprehensive platforms you’re considering communicates better with the individual job-pricing solution they use. Without the input of these primary stakeholders, you run the risk of having to manually transfer data between systems like you did before you had any HR technology at all.

Get started

Now that you know what to avoid, you should be more equipped to move forward with your search for an HR technology solution. But if you want more guidance as you compare vendors and software, download our free e-book, HR technology: How to choose the best platform for your business.

M
Mike Buonaiuto

I work directly with decision makers vetting HR SaaS tech. They rarely follow these steps. Not getting buy in, which could hurt the adoption rate of loving/hating the change. Asking for references, is a surefire way to get testimonials and client success stories. Thanks, really good stuff here!

Insperity Blog

You’re welcome! Thanks for your insight and feedback, Mike.

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