HR tech has exploded in recent years. New, specialist functionality is constantly being released to cater to niche industries as well as each business function. Competition among vendors is hotting up too.
This is great news for HR teams.
Not only is the perfect set of functionality more likely to be available, the competitive nature of the market means you’re in the driving seat when it comes to negotiating on price.
The only downside with all of this competition is it’s more difficult to make sure you select the best system for your needs. System Shortlist can help to steer you in the right direction by creating an initial shortlist of attractive options. It saves you a lot of time at the outset, but the ultimate decision needs to come from you.
In this guide is split into ten sections and covers checklist of 190 things you should understand about an HR software vendor before signing a contract.
Most of these are questions you should ask the vendor directly, some information is available publicly.
Understanding these areas will help you confirm that the functionality meets your needs, both now and into the future, at a price that suits your budget, and that the vendor is likely to be a strategic partner you can work with for the long-term.
The right HR system for you has the potential to be an organisational advantage over your competitors. Your employees can be more productive, your organisation more efficient and your C-Suite can make more informed strategic decisions.
So, while you need to select an HR vendor based on their ability to meet your current needs and demands, you’ll also want to understand their ability to grow with you.
- What new functionality has been released in the last 12 months?
- What new functionality will be released in the next 12 months?
- How do you develop your roadmap?
IT and infrastructure
This area is one for your IT team to get involved in but worth you having a grounding in first. At an early stage, you should speak to your IT team to understand which requirements are fundamental red-lines. It can avoid lots of time spent scoping out a project with a possible supplier, only to find that you’re not able to progress because of a platform or security-related issue.
- Technology platform
- How is the service delivered? SaaS, on-site?
- If SaaS, what browsers is it compatible with?
- Where is the data hosted?
- For mobile functionality, are there any operating systems that it is not compatible with?
- Security and business continuity
- What security accreditations do you hold?
- What business continuity measures do you have in place?
- What background checks are carried out into your employees?
- How many data centres is your software hosted in?
- How frequently is your data backed up?
- Do you conduct penetration tests with CREST approved third parties?
If you ask a vendor how good their support is, every single one of them will tell you the support they provide is excellent. To help uncover the truth you’re after specifics. Being confident that you will be well supported to get the most out of your purchase after signing the contract is as important as the functionality. Most of the time, when a user has a complaint about a system, it’s not because the functionality doesn’t exist, it’s that they’re not familiar enough with the system to use it to its fullest.
- How do you communicate with customers? (ask for examples of each)
- Video guides?
- Written user guides?
- What customer events do you host?
- What SLAs do you have for your support team?
- How do you monitor the effectiveness of the support you provide e.g. Customer Satisfaction score (CSAT), Net Promoter Score (NPS), etc?
- Do you provide customers with an account manager?
- How do you ensure your customers get the most value out of the system?
- How is the training provided? Online, classroom, client site?
- Beyond formal training sessions, what access do you provide to other training resources e.g. user guides, videos, etc?
- How much training is provided during the implementation phase?
- What happens if our organisation hires a new HR administrator? How do we get them trained on using the system? What is the cost?
At an early stage, you will want to get a rough sense of the likely costs of a solution. There is no point you and your colleagues sitting through hours of demonstrations for a solution you like the look of only to discover it is WAY out of your price range.
Vendors of sophisticated HR systems are likely to say that they can’t give a price before understanding your needs. This is a result of how the vendor’s sales teams are structured and rewarded. The person on the phone is probably incentivised to book as many sales meetings as possible and doesn’t want to put you off before the sales team has had a chance to “sell the value” of their solution. By simply explaining that you won’t be able to progress any further without a ballpark upfront and subscription cost based on your organisation size, you’ll quickly get a rough range of costs to set your expectations.
Later in the selection process, you will want a more detailed understanding of the costs you can expect.
- What are the up-front costs
- Are there any “activation” fees?
- What will the cost of implementing the system be?
- What are the up-front training costs?
- What are future training costs?
- What are the payment terms? Is it annually in advance, quarterly or monthly?
- At what point do you start to pay for the software subscription? Is it before, during, or after implementation?
- Is the price fixed for the duration of the contract or will it increase each year? If it increases, how much will it increase?
- What are the price bandings above your current headcount?
- Are there any other costs such as “data storage”?