So Many Vendors, So Little Time
Vendor selection is more challenging than ever due to the proliferation of new products and services—and the concerted effort
it takes to separate sales hype from actual performance.
“The sheer volume [of HR technology vendors] adds complexity,” says Brad Mandacina, vice president and director of
the HR technology and outsourcing practice at Lockton Benefit
Group, a Kansas City, Mo.-based insurance brokerage.
Today, advances in technology, particularly the growth of the
cloud-based soft ware-as-a-service model, have significantly lowered the barriers to entry for both vendors and employers. As a
result, new vendors are emerging daily, and many will offer their
services at far lower rates than their more established competitors. That raises the level of risk for unsuspecting HR professionals who aren’t experienced at conducting thorough evaluations of
new products or services. And while lower rates mean the direct
cost of a bad decision may be lower, the overall expense to the
business of a botched implementation often is dramatic.
“The cost of a bad decision can be significant,” Mandacina
Know What You Want
says. “It’s beyond the cost of the technology. It moves into soft
dollar costs like system downtime, loss of productivity … and
the hours HR, finance, etc., dedicate to manual workarounds
or resolving issues.”
Fortunately, you can improve your chances of making a sound
decision by learning from the experience of industry experts and
seasoned HR professionals and by following these steps in your
next vendor selection process.
To get what you want, you must first understand what that is.
“You’ve got to understand the requirements and needs of your
business,” Thatcher says.
Spend time upfront itemizing your environment’s parameters and listing the problems you want the technology to solve.
The number of employees, locations and users may all be factors
in weeding out inappropriate solutions. You also want to think
beyond functionality to issues such as customer service and user
When Jacksonville, Fla.-based temp firm Agility Staffing was
Know Your Audience
looking for technology that would manage both payroll and time
and attendance, its leadership struggled to find a solution that
could meet its industry’s unique needs. “Temp staffing is tough
because you need access to people who aren’t employees,” says
Mike Rolewicz, president of Agility. “A lot of systems just aren’t
set up for that, or they want too much personally identifiable
information.” Because Rolewicz was clear about his company’s
requirements, he quickly eliminated vendors that were a bad fit
and focused on the few solutions that could meet Agility’s needs.
Remember that no department is an island. “Sometimes HR
leaders are so focused on meeting the needs of their department
that we forget we’re part of a bigger business,” Thatcher says.
He recommends seeking clarity by asking, “How does this tool
help us reach the strategic goals of the business at large?” When
building your requirements list, be sure to solicit feedback from
other areas of the business that may be impacted by the decision,
such as finance or compliance. You’ll also want to include repre-
sentatives from IT and legal, to gain their expertise. “They [IT
and legal staff] raise questions that you may have forgotten to
ask,” Thatcher says. “It’s super valuable to get their input. I like
to engage other groups to see what questions they have.”
Once you’ve identified the variables that matter to your enter-
prise, rank them by importance. Some items may be non-negotia-
ble, while others are just nice-to-haves. “With these requirements
and weighting of critical factors, an organization can use a check-
list to ensure the vendors being considered meet the minimum
requirements and provide pricing on the exact services needed,”
There’s another set of important stakeholders to remember:
users. Particularly for self-service solutions, consider your work-
force’s unique needs, characteristics and cultural challenges.
When Sarah Huber was selecting a time and attendance solu-
tion for professional soccer club FC Cincinnati’s 60-plus employ-
ees, she recognized that few of the associates sat at a desk. “Our
main office is downtown, and the team plays at a stadium at
the University of Cincinnati campus,” says Huber, senior vice
president at the United Soccer League-affiliated soccer club. FC
Cincinnati also operates a retail store selling club gear in another
location. “Our employees are not always in front of a computer,
they’re out and about,” she says.
That’s why one of Huber’s main requirements was an
The cost of a bad decision includes ‘soft dollar
costs like system downtime, loss of productivity
... and the hours HR, finance, etc., dedicate to
manual workarounds or resolving issues.’
– Brad Mandacina, Lockton Benefit Group