5 Things HR Professionals Need to Know when Selecting HR Technology
HR technology comes in all shapes and sizes. Selecting HR software can, therefore, be challenging. In this article, we’ll look at the HR tech selection process. We’ll discuss the preliminary steps, what stakeholders to involve, and key elements of an RFP. We’ll also share some HR technology vendor selection tips. Let’s get started!
This article is a round-up of a very insightful conversation I had with Phil Strazzulla, software entrepreneur and Founder of Select Software Reviews, during a recent episode of AIHR Live. If you rather watch the video, you can find the entire interview here:
Selecting HR technology: preliminary steps
PS: This depends, of course, on what sort of organization you’re in and what sort of role. There are folks that go in a new organization and conduct an audit of the existing systems; how they are being used – or not being used – and perhaps where there are ways to decrease your budget.
I think the more interesting frameworks are around people who are in an organization and who want to figure out with all the literally hundreds of categories of tools out there: where should I actually focus my time? There are a few different ways I think about this:
- Where does your gut tell you to spend your time? This is probably one of the most powerful and easy ways to focus. Our brains work in mysterious ways and often there are all sorts of calculus being run that we’re not even aware of that make us focus on certain things. It might be the candidate experience which can be the result of many different complaints from recruiters, from applicants, from hiring managers, etc.
It could also be connecting people who are working remotely as a result of the many different interactions you are probably having with employees.
- The other more rigorous, analytical way. This is the one I’m more accustomed to myself; to think about your business and specifically connect with those functional leaders in product and sales, and he (rest of) the executive team, and really understand where the bottlenecks for growth lie. What’s hampering your organization? It could be that there is churn in your customer service ranks, it could be that you can’t hire enough engineers in your product team, it could be that you’ve got a really great product but that you need to scale your salesforce and specifically in different countries, etc.
Really digging into the problems of the other people in the executive team is going to allow you to figure out where to spend your time and obviously, for each of those pains there is a potential HR technology and People/TA solution.
That is, in my opinion, one of the magical things of the people function; you really touch all different parts of the business and when you can align closely with one of those product leaders’ goals you can get budget faster, you can get implementation faster, and you can partner with them to make anything you do a huge success.
What stakeholders should you get involved?
PS: The answer to this question depends on how big your company is etc. There are certain boxes that you almost certainly will have to check when you go through any of these processes – budgeting, info security, IT implementation. One of the tricks that I always recommend people to implement what I call a cross-functional buy-in committee.
Essentially what this means is that you have, for example, a project to increase your employee engagement. There are people throughout your entire organization who really care about any given initiative.
If you bring the leaders from each of these different functional areas who care about, in this case, employee engagement, and join them into a committee to help you brainstorm ideas, help you do vendor selection, help you get the budget, internal stakeholder buy-in, manage people during implementation, etc., you are going to be so much more powerful.
The way this works in practice is, you literally just post on Slack or your social intranet something along the lines of, ‘In the people team we’re focused on increasing engagement this quarter or this year. If anybody is interested in joining an informal committee about this that’s going to meet once a month or once a quarter, let me know.’
The people who opt-in on this stuff are always the A-players because they’re taking on extra work. After all, most people don’t take on extra work unless they are extremely ambitious and usually very capable. So you get 5 or 6 of these amazing people together and they’ll help you do a better job at whatever it is that you’re pursuing.
Key elements for an RFP for HR software
PS: The basic elements are the HR technology must-haves and nice-to-haves in terms of features, or integrations, etc. You can use an RFP (request for proposal) template for HR software but if not, you can use a spreadsheet where the rows are the features and the columns are the vendors.
A couple of pro-tips here:
- Vendor likability. One thing a lot of people don’t think about too much is how much they like the vendor. If you really like your salesperson, if you think they’re highly organized, that they have a lot of insights and that they understand the space in your business, that probably means that they are a very good salesperson and good salespeople can choose where they want to work. They can literally choose any company.
If you’re an over-quota salesperson you can decide where you want to work and for the most part where you want to work is at companies that have good products because that allows you to crush your quota and make a lot of money. So, if you really like your salesperson there’s a good chance that there is a good product behind that person.
- Share your vendor spreadsheet. Another tip that I’ve come across recently is that if you create your spreadsheet and you send it to the vendor while blocking out the data you collected on other HR technology companies but leaving those companies’ names in there, saying ‘hey, I just want to make sure the notes I took during our call are actually accurate,’ you’ll find that the vendors are much more likely to negotiate on price with you. They’ll know that you’re a savvy customer and they will try to give you the best price.
There is a lot of anecdotal evidence that shows that this is a highly effective strategy for negotiating a good price, especially with enterprise software.
Vendor selection tips
PS: Vendor selection is a skill that you develop over the course of years. There are so many little tiny tings you can learn, but it’s so different depending on the type of HR technology you’re looking for. Some of the keys include:
- Stay organized. It’s important to stay organized, understand what your criteria are upfront, and how you’re thinking about value. Personally, I always think ‘How is this going to impact the business in a way that the CFO is going to appreciate’ and build a natural financial model around that.
So maybe for employee engagement, this means ‘We’ve got a 30% churn within customer success and we think that by increasing employee engagement that will go down to 26% and that incremental 4% is going to lead to XYZ in savings.’
The cool part about this, in my opinion, is that it’s a bit like a journal entry that you can go back to in 6 or 18 months from now and be like ‘Was it 4%, was it 3%, and were we right, were we wrong, etc.’
- Goal alignment. Picking an HR technology vendor that aligns with the goals you set out is important because a lot of these categories of software are highly nebulous, especially the emerging ones. If you look, for instance, at AI HR software there are tools that will convert people on your career site, there are tools that allow you to source better, to schedule better, to do onboarding better, to answer internal employee questions better.
When you’re going to an AI vendor, you need to understand how they align with your vision.
- BANT. A very tactical pro tip is that when you do create your shortlist and you request vendor demos I highly recommend that when their first email comes back to you that you have BANT – which stands for Budget, Authority, Need, and Timeline.
Vendors only want to spend time with you if they think you’re worth their time so they have junior salespeople that spend their time trying to figure out whether you are the right person, if you actually have the money, whether you are going to do it soon, etc. In order to skip a lot of that, you can coordinate over email and save yourself some time.
- Implementation. I believe it’s really important to get the specifics around implementation. A lot of salespeople will tell you about the best ever implementation when you ask them, but you want to understand what it will be like for your company, realistically, with the way that you guys move and get things done and what the actual steps are going to be.
If somebody can’t articulate that you need to speak to the account manager and you need to really drill into what people are saying and not just take it at face value. Because it’s really easy to say ‘we’ll hook up your ATS and we’ll get it live on your job pages’ but those 2 steps can take literally 18 months. So you need to understand on a very granular level what is going to happen and who does the work and what’s the timeline.
HR software categories to keep an eye on
PS: I think there is an emerging field around people analytics that is very accessible to more and more companies. A lot of people analytics right now is happening in Tableau or Power BI. There, you have individual people with technical skills who can pull in data from different places in the organization and run analyses and generate insights.
I think there are HR technology companies like Lattice or Peakon that are taking that data and put it into premium dashboards that can actually drive a lot of insights for your company. We’re seeing this across lots of different vendors. So that’s a really interesting place in my opinion.
Then I think probably the other big one is everything that is happening with automation. Software allows humans to be more efficient and software that is slightly more intelligent allows humans to be even more efficient. I always think of how software will allow recruiters to recruit twice as many people a month because they don’t have to continuously follow up with candidates, they don’t have to run job adverts on databases, etc.
Many of these things are now being done by machines that are getting quite good at it. I think that is going to be a huge thing for both the enterprise and also the smaller people teams.