6 Ways to Get Great HR Technology for Small-Business Prices

By Mark Feffer April 13, 2018
6 Ways to Get Great HR Technology for Small-Business Prices

​When Peter Sandford and Bob Christensen founded NXLevel Solutions in 2004, they envisioned a company whose structure would be relatively flat and offer ample development opportunities for its staff. 

So when the Lambertville, N.J., learning-solutions provider decided to incorporate technology into its review process, finding a product that aligned with its approach to performance management was the driving force.

"We didn't want a standard review-based platform," explained Sandford, executive vice president of the 22-employee company. Because of NXLevel's size and simple org chart, he looked for a product with a "modern review approach" that could "handle how [the employees] work and think."  

After examining several options, NXLevel selected 7Geese as its solution. The product, Sandford said, aligned with how the company's management and staff operated and provided the training and support they'd need to use it effectively. Although all the products he evaluated were priced similarly, Sandford's takeaway was to focus on "alignment first, then price" when buying HR technology. That way, you avoid paying for unnecessary tools, he said. 

The range of HR technology—whether complex enterprise-level artificial intelligence and machine learning and analytics, or simple databases—is vast and growing. "There are solutions on the market for every shape and size customer," said Jeremy Ames, co-founder of Hive Tech HR, a Medway, Mass., firm that implements HR systems for organizations with 200 to 1,200 employees.  

While that's good news for smaller employers, it doesn't change a fundamental rule of technology: Acquiring the best and most cost-effective solution requires doing your homework upfront. Let these six points be your guide.

Know Your Organization

Before anything else, make sure your organization's needs are clear and prioritized, be realistic about how much money leadership is willing to spend, and be ready to make your case appropriately. Put another way: You must invest the time necessary to understand the specific challenges you have to address and the kind of technology that can address them.

"With any technology, you need to know your organization and its threshold," said Nicole DeFazio, HR manager for Blue Rock Construction, a Newtown, Pa.-based construction management company with 80 employees. "You have to be clear on what people are going to see. Do a lot of thinking upfront, otherwise you're wasting money and resources."  

That's especially true today, when so many tech solutions are available for so many HR issues. Any conversations about your requirements "need to be really specific," Ames said.

Let Specifics Drive Your Research 

Only after you're clear on your organization's priorities is it time to "research, research, research," said Chad Sowash, co-founder of Catch 22 Consulting in Columbus, Ind. "Look for simple and pure processes you can routinely follow." Read reviews of the products you're considering, and don't be afraid to call up and interview a vendor's current customers to get a sense of their satisfaction—or unhappiness.  

Also, bear in mind that "not all full-service or end-to-end systems will be the best choice or provide the best price," Sowash noted. "Have an open mind and look for vendors who can demonstrate real-world solutions to your specific problems."

That might mean you need more than one product to address a particular concern. "The trick is to make sure your research goes beyond understanding the capabilities of different systems and comparing prices," Sowash said. Too many small companies, he and other experts suggest, don't spend enough time thinking about how a technology's capabilities will fit into their workflow. 

Selling Management: Time Is Money

Then there's the issue of convincing management that you're spending money wisely. 

"Management always has to balance cost versus value," said the HR director of a project management consulting firm with offices in New Jersey and Pennsylvania. (She asked not to be identified because she has to balance encouraging her company's owners to invest in technology with not eliminating her own job.) Her firm has nearly 100 employees "but still operates as if [it] had 20," she said. "Our [paid time off] and time sheets are still on paper," and recruiting is managed through a process that relies on paper forms and Excel spreadsheets. "It's not easily accessible or transparent," she observed dryly. 

This manager is in the "very, very early stages" of educating her leadership about how technology can help the firm. Among other things, she believes the right systems will save significant time on such tasks as printing forms and calculating expenses, as well as provide a better experience for employees when they need to access benefits information. In addition, adopting more technology will allow the company to forego hiring an additional HR practitioner as the company grows, she said. 

Sometimes, the right tech solution costs only the time it takes to find it and roll it out. When Maggie Fellenz, the general manager of Bowman's Tavern in New Hope, Pa., was hunting for an application to schedule the restaurant's front-of-the-house staff, she evaluated several solutions that cost as much as $100 each month. Then she found Shift Messenger, whose free version allows her to manage schedules, handle shift changes and communicate policies. However, she noted, "if I was managing multiple locations, we might have had to use something else."  

Make Sure Your Vendors 'Get It'

As you evaluate each product or vendor, make sure the provider understands your specific requirements. For example, a vendor whose pitch or process "seems convoluted" is probably a mismatch. That lack of clarity "demonstrates the vendor doesn't have a solid grasp of your needs," Sowash said.

Of course, performing the due diligence to ensure your solution will work for everyone—or most everyone—in your organization is no small thing, especially for solo practitioners or those who handle HR part time. However, it's the key to ensuring you're paying an appropriate price for the technology you're getting. 

Consider a Consultant

In some cases, the best path might be to ask for help. "Most [small to medium-sized businesses] don't have the time or expertise to perform the necessary discovery, comparison, negotiation and implementation phases with HR tech vendors," Sowash said. For those companies, an outside consultant can help by guiding them through the process. 

However, the process isn't always neat and clean. Many small companies don't think much about HR technology until a specific need arises. "It's what might help us with this issue or that issue when it comes up," said Katie Cano, the director of client services—who also handles HR—at Cano Wealth Strategies in Hightstown, N.J. "I'm not out there looking for resources." 

When in need, Cano usually turns to the practice management services offered by the firm's broker/dealer, Commonwealth Financial Services, which provides a range of HR materials to assist its affiliates' offices. She runs payroll through the website of a local payroll service and oversees the 401(k) through the online portal of the plan administrator.  

Whatever issue she's facing, "cost is a big factor in weighing the solution," Cano said. "That's especially true for stuff [such as scheduling and communications] that we can handle ourselves." On the other hand, she wouldn't shy away from purchasing a solution when it made sense. "It's better to pay someone and know it's done right than to spend your own time on it," she said. 

Research Before Outsourcing

Not surprisingly, some companies consider outsourcing their technology needs rather than taking on the tasks of research, implementation and management themselves. Many employers already contract routine functions like payroll and benefits administration. Again, Ames cautioned, your conversations about outsourcing must be as specific as possible.   

For example, he said, employers should ask:  

  • Should the search for a new system be outsourced, or the implementation, as well?  

  • Once the system is launched, will it be more cost-effective to outsource its ongoing administration and maintenance?  

  • What specific functions should be outsourced? If a company is considering the outsourcing of all HR functions, signing on with a professional employer organization—which becomes the employer of record for the firm's workers—might be worth evaluating. "Specificity is key," Ames said.

Whether you acquire your HR technology directly, hire a consultant to help with part of the process, or outsource everything, Ames believes that "the excuse 'we're too small to digitalize HR' is dead." If anything, he said, "being smaller makes it easier because you don't have segments of the company that have already figured out their own automation. Plus, you have an easier and quicker path to onboarding new technology." 

Ultimately, NXLevel's Sandford believes, getting the most bang for your buck is an ongoing process. "You really have to define your objectives and then keep reviewing [the system's performance] to make sure it's succeeding," he explained. 7Geese sat dormant for six months after NXLevel purchased it. Sandford explained, "We didn't really see its value until we began building it into our operations."  

 Mark Feffer is a freelance business writer based in Philadelphia.

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