The human resources field has always been a data-driven discipline. While SAP, Oracle and ADP hold the lion’s share of the tech market, recent technology consolidation has left an opportunity for smaller vendors to come in and focus on the SMB market. This opening has led to an explosion of HR tech over the past two years.
The human resource management challenges of a small company are inherently different from those of a larger one. For this reason, the approach to vendor selection must slightly differ as well. Here are some tips for selecting the best HR tech vendor for your small company.
1. Ensure there is a need for the vendor.
While a successful vendor selection process should always begin with a needs analysis, this is even more important for smaller-sized companies. A simple start can come in the form of assessing two things: 1) Areas you are spending a lot of time on and 2) Areas where you need to spend more time. For instance, if you are spending the bulk of your time on recruitment, but find that you need to spend more time on T&D, you may be best served automating your recruitment. Running a needs analysis can ensure that you don’t fall victim to working with a vendor merely because they are the shiny new toy in town.
Pro Tip: Map out all of the branches of HRM and allocate the amount of time your company has spent in each area relative to the budget. If a given area’s budget is higher than the time spent, consider reallocating the funds to an area of greater need.
2. Understand your unique needs.
For HR, new technology has not only arrived in the form of automation tools, but perhaps more importantly in the form of what we refer to as data visualization. When selecting an HR tech vendor, it is crucial to understand whether your company is looking to automate a process or merely uncover more about the data. Additionally, each company is unique and has a different set of needs at each stage of growth. Your first year in business may require a focus on automating hiring, however, proving your value to an investor later on may require data regarding engagement and retention. Considering your company’s unique needs will not only help you understand which kind of product you need, but also when you will need it.
Pro Tip: Remain open to conversation with vendors year-round. A vendor you don’t need today, may be just the solution you’re looking for tomorrow.
3. Take advantage of the market competition.
While large companies traditionally gravitate to well-known vendors, small and medium-sized businesses may lack the need for large cloud-based solutions. As a result, many small companies frequently work with startup HR tech vendors. This growth in vendors servicing small companies has increased price competition–which is great for SMBs! When analyzing the cost of a vendor, always ensure that you can compare the pricing to other competitors. Additionally, with many products operating on a freemium model, consider why you would pay for a service and whether the paid version will bring additional benefits.
Pro Tip: Ask your vendor for a 15 or 30-day free trial. Test the product with a small team first to get a sense of how the product functions and most importantly, how good the customer service is.
4. Know what you feel comfortable sharing.
Whether you’re automating a process or simply looking to gain more insights, choosing technology ensures that you will be sharing data with your vendor. While there are many questions you should ask regarding the data collection process, understanding what you are and aren’t comfortable sharing is important. Smaller companies are less likely to have data sales as a component of their business and this is a huge advantage to selecting an HR tech startup.
Pro Tip: If you’re considering going with a web-based platform, ensure they have an SSL certificate in place.
5. Be certain your vendor is your teacher.
As already mentioned, HR has long been a data-centric discipline. However, new technology will require a learning curve. When selecting a vendor, understand whether they are a subject matter expert and willing to be a resource. One way of qualifying a vendor is by asking whether they have blog content, infographics or guides. If you find that your vendor is not content heavy, don’t panic, it may mean that they are simply more product-focused. This isn’t a bad thing, but certainly worth knowing if you are looking for a partner with a consultative approach.
Pro Tip: Check out the twitter of each vendor you’re evaluating. The kind of content that is shared can provide you with some worthy insights into how your vendor approaches educating the market.
About the Author
Agatha Zacharska is the founder and principal consultant at DoubleThinkk. She has spent time at both startups and Fortune 500s alike creating unique and intelligent advertising strategies. Follow her on Twitter.
Tags: HR Tech, tech vendor, vendor selection