As the number of HR technology vendors grows, the challenge of finding the right provider to meet your unique needs grows, too. HR tech buyers face this problem more often this year, as studies show more human resource leaders are looking both to change existing vendors when their contracts expire and to increase their HR technology spending in 2022.
Technology analyst George LaRocque tackled this topic at the spring HR Tech Virtual Conference. LaRocque, founder of WorkTech, an HR technology advisory and research firm in New York City, told the audience it's more important than ever to cut through marketing claims and use proven evaluation methods when selecting vendors.
"Progressive employers are looking to their technology vendors to be agile, responsive and innovative business partners," said LaRocque, who analyzed more than 1,000 new HR technology products in the past year. "There's a new wave of HR technology innovation, and it's bigger than anything we've seen before. Existing tech providers also are rapidly bringing new products to market and accelerating their product road maps. It's important to be able to sort through the marketing hype to make the best choices for your organization."
Tips for Choosing Vendors
LaRocque said many HR leaders will be in a buying mood this year as they seek to replace systems or chose new ones to complement existing technology suites. Research from PricewaterhouseCoopers (PwC) found that 74 percent of organizations plan to increase their spending on HR technology, while Sapient Insight Group's recent annual survey found 57 percent of respondents plan on increasing their HR systems spending, LaRocque said.
The PwC survey also found many HR leaders are in some way dissatisfied with their current technology vendors. Almost 40 percent of respondents said it's "somewhat" or "very likely" that they'll switch vendors at the end of their subscription term—and only 20 percent called the chance of changing vendors "very unlikely."
LaRocque offered these buying tips for HR leaders who are in the market for new technology platforms.
Pick the Brains of Executives and Stakeholders
Before you begin evaluating new technologies, it's important to understand the mindset of your C-suite, LaRocque said. "Are they more concerned with compliance or employee experience, for example?" he asked. "Do they truly understand how people strategy impacts business results or DE&I [diversity, equity and inclusion]? Do they understand human capital metrics in regard to the SEC's [Securities and Exchange Commission's] new requirements? Determining your CEO's mindset helps you focus the technology-buying conversation."
It's also important for HR to align with key internal stakeholders like finance, legal and information technology. LaRocque cited one case where a large company took an HR vendor selection process to the cusp of the finish line only to have the deal crumble because of poor partnering and communication between HR and legal.
"There were contract terms that were not vetted up front by legal," he said. "The vendor would not acquiesce, so the whole process needed to start over."
Start Your Research with Your Own Networks
LaRocque said the best way to begin researching prospective vendors is to seek input from your own professional and internal company networks.
"Your first step should be getting a feel for how other companies and colleagues are addressing and solving the same challenges you face through technology," he said. "You want a sense of what technologies are and aren't working."
Don't overlook seeking feedback from other departments in your organization about their experiences choosing and using vendor platforms. "Other functions often have implemented solutions that you can learn from," LaRocque said.
Conduct Early-Stage Product Demos
When building your technology requirements, LaRocque suggests asking some targeted vendors to present their products to you.
"This may illuminate some new approaches you haven't been thinking about and help inform your requirements," he said. "It can help you think about technologies or capabilities you hadn't considered previously."
But LaRocque cautions against being "sold" at this early stage. "View it purely as an informational exchange, and keep your attendee list small," he said. "These are exploratory meetings, and you are looking to inform yourself and your HR team as to what's happening in the market and to seek out new and different approaches to solving challenges through technology."
Evaluate the Potential Partnership as Much as the Technology
How a vendor provides support and customer service after the sale is just as important as the cutting-edge features or functions available on its technology platform, LaRocque noted.
"You want to understand the vendor's approach to solving problems and specifically who you'll be dealing with after the contract is signed," he said. "What kind of culture will you be aligning yourself with? There are always bumps in the road, and you need to have confidence and trust in the partner you're selecting."
Move beyond vendor salespeople to find out who will provide customer support after the sale, he advised. "You need to meet whoever will be your account manager or customer service manager before you sign the contract. Make that a requirement of the deal."
Don't Overscript Demos for Finalist Vendors
LaRocque said procurement departments and external consultants aiding in vendor selection often like to create elaborate scripts for product demos conducted by finalist vendors.
"The scripts look at all of a company's workflows and ask vendors to step-by-step demonstrate their abilities to match those workflows with their systems," he said.
While much of that demo work is helpful, it's also important to allow vendors to go off script, LaRocque recommended. "Give vendors a chance to show you a new, more innovative or efficient way to achieve a workflow that could improve an outcome like the employee experience," he said. "It's important to keep an open mind and give the technology provider room to address your scripts in new ways."
Take Care Before Going Live
LaRocque said the stakes are high in making the right technology decisions, so it's important to be thoughtful and thoroughly consider your options before going live. It's also vital to keep IT by your side during the selection and implementation process to assess issues like the ease of integrating or scaling platforms.
"There are more technology options than ever to evaluate today," he said. "You need to consider things like point solutions, phased rollouts, and the opportunity to test and learn before you go live with a new system."
Dave Zielinski is principal of Skiwood Communications, a business writing and editing company in Minneapolis.