Buying Strategies

HR Tech Buying Trends for 2019

February 15, 2021
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Brett Ungashick
Founder

After assisting with over 150 HR software purchases in 2019, here are the key HR tech buying trends we learned from our clients

[Updated on 8/26/2020] What were the buying trends in HR Tech for 2019?

In the past year, over 150 companies have used OutSail's free services to help select new HR technology. These companies have been as small as 7 employees and as large as 20,000. Some have a global presence and some are fully remote. Some are on the cutting edge of technology and some are looking for their first HR system.

Despite each company's unique characteristics, consistent patterns emerged from these software buyers throughout the year. They shared similar frustrations with their current infrastructure and they had similar key criteria for selecting new systems.

One purchase fills a need, one hundred and fifty purchases tell a story. Here's the story we learned this year:

Buyers are looking for more efficient systems

Some of the most common reasons that buyers have gone through an HRIS transition is because they have found their core provider lacking in certain functional areas. While many companies have tried to fill in those gaps with standalone tools, this approach has lead to other frustrations associated with a multi-system approach (more logins, harder to report, more manual re-entry).

Question: Why are you leaving your current HRIS provider?

  1. Lacking Capabilities. The platform doesn't support some of our core functional needs (58% of buyers cited this as a major reason)
  2. Poor Customer Service. The support we've received has been unresponsive or unreliable (53% of buyers)
  3. Too Many Systems. We have multiple standalone tools and want to consolidate and become more efficient (44% of buyers)
  4. Not Getting An ROI. We don't feel like we're getting as much as we should, given the price (37% of buyers)

Core HR is still king

While many of the exciting new vendors and innovations in the HR Tech space have been around talent management, engagement & employee development, buyers still feel like they need to walk before they run. Core HR functionality (Payroll, Ben Admin and Time) is still what is driving the majority of HR Tech purchases.

Question: What are the key functional areas that your next HRIS provider needs to excel at?

  1. HRIS (78% of buyers)
  2. Payroll (72% of buyers)
  3. Time & Attendance (42% of buyers)
  4. Benefits Admin (31% of buyers)
  5. Performance Management (23% of buyers)

Some standalone tools are sticky

While many customers have expressed an interest in moving towards a more all-in-one approach, there are certain standalone HR tools that deliver so much value that customers are hesitant to give them up during a transition.

Question: Are there any standalone tools that you'll be keeping and you'd like your next HRIS to work well with?

  1. Greenhouse (ATS)
  2. CultureAmp (Engagement Surveys)
  3. Lattice (Performance / Engagement)
  4. 15Five (Performance / Engagement)
  5. Lever (ATS)

Buyers ultimately want their day-to-day to be easier

What moves the needle for buyers? It's actually not a long track record and impressive customer roster, nor is it a flashy user interface and great mobile app. The most important thing buyers are seeking in a partner is a tool that will simplify their day-to-day and allow them to migrate to more strategic objectives

Question: What are the most important factors for the success of this HRIS purchase?

  1. Administrative Automations. We want to reduce the amount of manual work and re-entry that our admins have to do (40% of buyers)
  2. Better Integrations. It's important that all of our software systems can communicate data between each other (34% of buyers)
  3. Scalability. We're looking for a partner who will be a fit today, but can also grow with our business (34% of buyers)

Question: What is the least important factor in the success of this HRIS purchase?

  1. Established Partner. We want a partner that has a lot of experience and a strong customer base
  2. Value. We're looking for the vendor who will deliver the most bang for our buck
  3. User Experience. We want a modern & easy-to-use platform that will help with employee self-service

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Brett Ungashick
Founder
Brett is the founder of OutSail. He spent the early part of his career selling HR software before switching sides and going to work for the people buying the software.

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