How to select an HR SaaS provider

Ruth Thomas

Curo

Chief Operating Officer

How to select an HR SaaS provider

By Ruth Thomas

The impact of the changing economic environment on the HR function has been significant and led to many legislative and regulatory changes. But it has also resulted in a shift in staff expectations and the employee/employer relationship, all of which have necessitated a review of HR business processes.

Such a revamp means that it may be valuable to undertake a review of your underlying HR software too, however. And with cash and resources in generally short supply, one possible option is to go down the software-as-a-service route due to its low upfront capital costs.

But if deciding whether to evaluate SaaS, there are two key considerations:

It is crucial to ensure that the needs of the business are documented – and reviewed periodically to ensure that they remain relevant.

A formal process should also be introduced to map – and formally score – these requirements both against your incumbent system and any new candidates. It is likewise useful to establish benchmarks that can become triggers for change if the score should fall short.

Should a decision be made to go with an external provider, the following issues should also be considered:

Think about the functionality you require. While ERP systems will provide basic HR functions, they will inevitably be unable to deal with the full range of HR processes in the same way as specialised SaaS offerings.
After identifying potential suppliers, explore their approach to product development. If the vendor provides web-based software, for example, do all customers receive the same software code and how do they get hold of upgrades?
Ask candidate SaaS providers to outline their functional road maps and ensure their products are scalable. Also insist that they are contractually obliged to make any adjustments/amendments to their applications in order to reflect any legislative changes (at their cost not yours’).
Evaluate total cost of ownership. Be sure to explore the overall cost of working with different vendors over a three- or five-year period. Consider potential installation, licence, hosting, upgrade and alteration fees – some may not apply but, in certain cases, headline figures will not match the full investment required.
Ensure that a suitable balance is struck on contract length. The ideal would be an arrangement that delivers lower procurement costs, but is also based on sensible end dates (possibly with break options before then), which either allow the contract to be rolled over or terminated.
Confirm that the expected deliverables match your scope and budget. With the economy being what it is, there’s never been a better time to explore your options.