Purchasing HR Software for the Future of Work

Selecting HR technology for the company you will become, not just the company you are today, sounds like common sense, but it’s something that sets Jillian Moulton apart from many HR-technology buyers.

“We didn’t just want an HCM platform that could support us today. We needed one that would help us more than double in size in a short order,” says Moulton, vice president of people and talent at JW Player, an online-video platform in New York.

Moulton led JW Player through the selection of a new HCM and payroll platform, a process that started by exploring the systems used at similarly sized companies, as well as those at larger organizations to get a sense of the future scale of the system it would need. It leveraged its benefits broker to understand what platforms it would integrate well with, and to gain insights into the systems other HR leaders with whom the broker worked were using. Ultimately, the implementation of the new platform reduced the number of point solutions the company’s HR department was using, leading to gains in efficiency and scale as the business is primed for growth.

JW Player’s experience offers a telling example about the need to consider a company’s goals when evaluating a new technology vendor, which companies should look at as potential partner for future development.

HR-Technology Buyers, Beware

As vice president of strategy consulting services at HireClix–a digital-marketing and strategic-advisory firm in Boston that helps companies select and implement talent-acquisition technology–Martin Burns says he has seen many companies using their current processes and workflows as requirements for their next platform.

“Selecting the system you will use in the future based on duplicating the experience you’re having with the system you want to replace is a common mistake,” Burns says. “And, it can be a big one.”

In our HRWins research, I’ve found that leaders across all the functions in HR universally list their personal network as the best source of research and information regarding technology they are considering to “buy.” But it isn’t enough to just talk to other companies about what systems they are using and how they like them. HR-technology buyers should be thinking about the future of their HR function and their company’s future workforce, then looking for systems that not only address current required workflows, but cases that are approaching.

These future-use cases could be growth- or organizational-scale-related, as in the JW Player example, or address other business issues, such as international mergers and acquisitions; an emerging employee category, such as contingent or freelance workers; the rollout of new HR priorities, such as voluntary benefits; or new recruiting, employee development or internal-mobility initiatives. Prioritizing the selection of systems that can support your firm’s work and workforce of the future–even if it’s the immediate future–allows you to get back to the business of HR.

Don’t forget to ask for help when making these decisions.

Leaning on trusted advisors for their perspective, like JW Player’s benefits broker, was another smart move on Moulton’s part. Technology is pervasive in all aspects of business, and many service providers HR already works with have great perspectives on what’s working for their other clients. The degree to which the systems you’re looking for need to integrate with, or support, a service provided by the partner can make such partners a highly valuable source of insight.

HR leaders have a chance to learn how the process comes together and get a rare look at the anatomy of an HR-technology buying decision on Sept. 12 at the HR Technology Conference & Exposition® in Las Vegas, where I’m hosting a panel discussion called “Selecting the Right HR Technology: From Need to Implementation.” I will be joined by representatives of Talbots, HireClix and gr8 People, who will all share their personal takeaways from leading the selection and implementation of new talent-acquisition platforms.

You’re Going to Have to Live with This Decision

It’s important to go into the software-selection process knowing that you’re not just selecting a product, but a partner. As software has moved to the cloud, there is a misconception that relationships with technology vendors aren’t important anymore. The opposite is actually true. Today, most HR software is licensed on a subscription basis. While “on-premise” delivery of HR software isn’t yet completely irrelevant, I can’t think of a tech vendor developing it for the future, or of an employer that isn’t in a hurry to get to the cloud, if they’re not already there.

Working with cloud-based solutions means that, while you own your data and, commonly, the intellectual property reflected in your workflows, you don’t own the software or the infrastructure–you’re paying a subscription fee for access. While this may be over-simplified in some technical environments, it is largely true for the bulk of the market and always true from the user’s perspective. The system’s performance, the release of new features and functions, your ability to configure or customize your interface and more are all controlled by your vendor and the service-level agreements you have in place with them. Across the spectrum of HR technology and vendors, the level of ongoing dependency you may have on the vendor varies.

But it isn’t just the pure technical issues that should lead you to focus on the vendor’s approach to customer partnerships. HR leaders who have had the most successful technology implementations always mention the level of expertise and ongoing support they get from their technology vendors as critical success factors.

“Selecting a new vendor that would be a good partner to us was something we focused on,” Moulton says. “We needed a vendor that could support us through our immediate growth and beyond–one that could grow with us, that could speak to issues like compliance as a trusted resource and that manages a good relationship with our benefits broker.”

Burns agrees: “It’s important to pick a vendor you feel comfortable with–that they’re not going to abandon you the minute the deal is signed.”

Most HR-technology buyers have followed their “gut feeling” when it comes to evaluating a technology vendor’s approach to customer relationships and partnerships. Burns advises that the requirements here can be just as well-defined as what’s going into the software experience.

“Find out how they manage accounts post-implementation and what their customer-success team is like–interview them as part of the appraisal,” he says. “Ask about their roadmap–what’s coming and why certain features are prioritized. Ask if they have a customer advisory board, who’s on it and if you can talk to them. Use your network groups on Facebook and LinkedIn to ask questions, as well as directly to peers.”

Burns also cautions, “Be aware that some of the advice you’re getting is from people who may have a financial arrangement with a vendor. Check multiple references, and take it all with a grain of salt.”

It’s also important to look beyond the external aspects of your selection.

Spend time internally with the IT, finance, legal and procurement departments to understand what expectations your firm has for your buying process. Are there key contractual requirements that vendors need to agree to up front? What is your financial purchasing authority? Will you need any approvals, or the support of any internal departments? What involvement do these departments have in your buying decision? The fact that an employer is relatively small, or even that one or more of these departments doesn’t exist, doesn’t mean that there aren’t expectations to be met within the buying or contract process.

Tackle HR Tech Head On

While many companies move to platforms to reduce the number of systems employees must access, that hasn’t reduced the number of technologies being used in HR. Our research for the last two years has found companies are using an average of 24 systems across HR, including mobile apps, point solutions or “best-of-breed” applications covering one or two functional applications, as well as platforms extending across the HR function.

Not surprisingly, the same research uncovered integration of human resource technologies as the biggest challenge faced by our study populations. Data increasingly are required to flow across systems, which HR leaders are expecting to help connect the dots from recruiting to onboarding to engagement to learning–and then to retention and business outcomes, and back again.

Most technology vendors have published application-programming interfaces that promise to be open to transfer data between systems. While integration is thought to be easier in this API world, I’ve long recommended that HR-technology buyers demand the data they need flow as they need it–regardless of the platform. More importantly, demand validation on the integrations needed from the vendors participating in the selection process and any incumbent vendors. The ability to deliver on this requirement should be a pass/fail for new and incumbent vendors alike.

Data integration isn’t the only validation point I recommend in the selection process. Usability was the No. 2 challenge associated in our research for the last two years. You should plan on a hands-on trial of the product before you license long-term. Whether this is a pilot that serves as the first step in a staged implementation, or whether it is a “sandbox” or test environment with your data and core workflow, the effort and any expense associated with this first-hand experience far outweighs the potential cost of a bad decision.

As you go through the technology-selection process, what you experience should be the best face forward from the vendors you’re evaluating. The product demonstrations are delivered by experts, and explanations of how your workflow requirements are met are not normally delivered by the people who will be implementing or supporting them. Get your hands on the product and experience the interface and workflow for yourself while you also experience a small taste of the vendor’s implementation process and support mechanisms.

One thing is certain: It’s an exciting time to be in HR, as the world of work converges with technology. There is no better way to experience this than going through the process of defining your needs and priorities and then looking to technology to support them. As you begin your process of buying new HR technology, I hope these tips help make the transition more efficient and assist you with making the best possible decision for you and your company.

George LaRocque
George LaRocque, founder and principal analyst of WorkTech (1worktech.com), has more than 25 years in the HR technology industry. He's an HR leader and tech executive turned market analyst and advisor focused on users and developers of HR and talent technology. George leads the WorkTech research and reports on workforce trends and HR tech VC investment. He is also a founding partner of the Impact WorkTech Accelerator, launching the next generation of innovative global work and HR technology.