How to Select the Right HCM Option for Your Company
Most people meet with me because their current process is broken, their business is changing, or someone within their organization is pushing to look at other options. You have your cheer leaders who support the change, the people that don’t want to change, and the others that are willing to do whatever is best for the organization but don’t have a strong opinion either way. Regardless of which person you are at your organization, I hope you find this information helpful to support the outcome you’re looking for.
A coworker of mind describes changing vendors like moving into a new house. There’s the excitement of a new house with modern amenities and the optimism of the future. There’s also the stress of packing and the fear of the unknown. If you have kids, how’s the school district? How’s the neighborhood? Would this make a good rental property? How’s the resale value? The list goes on. Sometimes changing a vendor is a lot like buying a house. You’ve got to know why you’re looking to buy a house and what you plan to do with it.
Last year, I worked with a mentor who was gracious enough to pass down what he learned from selling HR technology over the last ten years. If you have ever been in a sales process with multiple vendors, they eventually all bleed together. You’ve got your red, blue, green, and other colored platforms. Some platforms use a drag and drop feature, while others use a drop down option. To make it even more complicated, there are many vendors out there. Each promising an all in one solution with a cloud-based platform.
Your challenge is picking the right solution among the many. After you compiled the questions you want to ask the vendors, and have thought about the solution you’re looking for, you’re going to be left with two or three good options. So, how do you know which one to pick?
I help my clients select the right option by advising them to evaluate how they feel about each vendor based on these four categories: company, product, service, price.
Company
Is the vendor private or public? Working with a public company provides transparency as well as piece of mind because these companies generally follow stricter guidelines with regard to their operations. That being said, the idea of working with a private company that’s similar to your own company may be compelling to you.
Another consideration about the company you chose to partner with, is the vendor’s reputation. For example, ADP spends around 600 million dollars on research and development, has received several awards for leading technology, pays 1 in 6 workers in the US, and has an average client tenure of 10 years…When looking at vendors, consider how they compare with each other. Will the company be around in 5 years, ten years, etc.? How will the vendor accommodate your company as you grow and evolve?
There are benefits and draw backs to each type of company. What matters, is what you think is important. Some clients prefer to work with smaller private organizations because they feel they’ll receive a more personal experience while other clients prefer to work with public companies because they like the security of working with a more established company.
Product/Technology
There are two prevalent strategies with human capital management technology right now (HCM). One of them is working with a vendor for all of your needs from recruiting to retirement. The other option is building your HCM platform by combining various vendors and utilizing API’s for a more custom approach. Before selecting a vendor you should decide which option is more important to you.
Working with one vendor reduces the risk of a data breach because your data is housed within one system. If you’re working with multiple vendors during a data breach you may have to work with each vendor to identify where the breach occurred. Another good reason to work with one vendor is the data integration. Ideally, by working with one vendor your information should all update without the need of an import/export process.
On the other hand by working with one vendor you may find that they are great with their applicant tracking technology but lack the sophistication you need with regard to their benefit administration technology. If you’ve made the decision to work with one vendor then it’s imperative to ask the right questions and do a thorough analysis to ensure the chosen vendor can meet all of your needs.
If you’ve decided that you want to build your HCM platform then you must work with a vendor that supports data integration through a secure API. You’ll also need to identify which vendors are compatible with your chosen option. Another thing to consider is whether or not the API supports two way integration. If not, you’ll find yourself manually importing and exporting files.
For example, ADP WorkForce Now is built to work with our client’s needs from recruiting to retiring all within our ADP technology. Clients can use ADP’s technology for everything or they can take advantage of ADP’s Marketplace which enables them to customize their platform by working with our vendor partners through a secure two way API integration.
When it comes to technology, it’s best to start with deciding on one complete system or working with multiple partners to accomplish your goals. Again, there are benefits to each strategy. The goal is to identify which path you’d like to take. Once you’ve identified the strategy, your next step is identifying if the technology can do what you need it to do, but that’s another conversation.
Service
Service is one of the most important aspects of selecting a vendor. Technology is great but if you can’t figure out how to work with it or access the resources you need, what’s the point? Generally vendors have two options for customer service, a single point of contact or a team contact approach. An important question to ask regarding a single point of contact is how many clients your customer service rep manages? For example, if your service rep manages hundreds of clients, you’re probably not going to get the kind of service you would expect from a dedicated representative. Another consideration is the availability of your customer service representative? For example, if you’re in multiple states you may need after hours service.
As far as the team service approach, generally you’re assigned a team of contacts that are assigned to your account. This can work well because in the event one contact is not available you have another option of speaking with someone that is familiar with your account. Lastly, you’ll want to consider the sales person that you’re working with. What’s their experience in the industry, how long have they been with the company? If something goes wrong with customer service, will they be available to help you resolve your problems? Most importantly what are the processes is in place, should things go wrong? For example in the event of an emergency, what’s the backup plan, is there one?
Price
When you’re evaluating price, consider the difference between price and cost. Here’s what I mean, price is what you’ll pay for the platform. It’s the hard dollar cost shown on your contract. Cost is the time it will take to get your people acclimated to the new technology, and the actual utilization of the new system. Over the years I’ve had clients that were willing to spend more money because they knew that the solution I provided them would save them time, reduce errors, and improve their workflow. I’ve also had clients that didn’t mind manually inputting data into multiple platforms because they were more concerned about price. Ideally, you’ll find what makes the most sense for your organization. When it comes to price I think you’ll find most vendors are pretty competitive with each other but in the event that one is significantly higher or lower, make sure that you understand the true cost of each option.
Hopefully, by identifying these four categories you’ll have a better understanding of how to evaluate your vendors and most importantly how to feel more confident when selecting the right option for your company. It’s also a good idea to meet internally with your team and identify what’s most important to each individual. You may have someone that has strong feelings about one of these categories and that may help guide your decision.