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Considering HR Tech? Beware the Long-Term Costs of a Quick Fix

Mike Seethaler, Vice President of Sales November 30, 2022

We’ve all been there. The old quick fix. Maybe you bought off-brand cornflakes, only to discover they taste weird and your kids won’t eat them. You might have picked up generic batteries on the cheap, and they performed terribly. Or perhaps you launched a DIY project thinking you’d save a few dollars, but ended up spending far more than if you had simply hired a professional in the first place.

Most of us have been burned at one time or another because we picked a product or service that promised to cost less or deliver faster results, but ultimately paid more to get the quality or results we were looking for. In business, the potential risks of gambling on a quick fix or cheaper option are even higher, and the pressure to cut costs or deliver immediate results can be far stronger.

The HR tech balancing act of a quick fix

HR leaders understand the struggle of balancing a quick fixe and budget-friendly solution all too well. At a time when HR is being asked to do increasingly more with less, HR tech is a powerful way to automate tasks, streamline processes, and free up precious HR resources to focus on high-value priorities. Beyond improving HR efficiencies, the right communications platform or benefits navigation solution can boost employee engagement, increase benefits utilization, and improve the overall well-being of your workforce.

All too often, however, organizations opt for a temporary band-aid or lower-cost HR tech solution due to budget constraints or competing priorities. Unfortunately, such moves are frequently reactionary and seldom strategic, and eventually may do more harm than good for your business and your bottom line. So before you select a stopgap solution or choose the lowest-price tech option, ask yourself the following questions to help you find the right fit for your long-term needs.

Will the platform help you achieve multiple business objectives?

Often, tech purchases are driven by one or two critical business objectives, and if you choose a solution that fulfills just those limited needs, you may be tempted to choose a platform without all the bells and whistles that could potentially increase the cost. But you also need to ask yourself if the bells and whistles that are “nice to haves” today might turn out to be tomorrow’s must-have features.

Sure, you need to find a platform or quick fix that serves your immediate needs or solves a pressing challenge, like personalized benefits messaging for greater benefits utilization or a centralized benefits hub for easier access. But what are some of your longer-term goals? Is launching an incentives program on your wishlist? Perhaps today your main focus is eliminating manual processes for HR, but next year you might be more concerned with looking for ways to reduce healthcare spend. By playing the long game and anticipating future business objectives, you can help ensure that you won’t be saddled with a legacy system that no longer fulfills your organization’s needs.

Look for a platform that comes with a variety of features, allowing you to achieve a variety of organizational objectives. By choosing a solution with optional features that can be added as needed, you can assure that you aren’t paying for functionality you aren’t using, while ensuring that your platform can evolve along with your business strategies.

Have you considered any hidden costs?

We’ve all heard the saying, “if it seems too good to be true, it probably is.” That can apply to business tech, too. Do your homework, and make sure you understand all of the potential costs associated with a platform. Some of these fees may include:

  • Implementation fees: Is there a separate charge for getting the platform up and running?
  • Features/modules: You may be wowed by the list of features a platform offers. Just make sure those are included in the price you’ve been quoted, or find out what those extras will cost you.
  • User fees: Platforms often charge “Per Employee Per Month” user fees. Confirm if these PEPM fees are charged based on all eligible users, or all active users. If you have 1,000 employees but only 10 active users when you first launch the platform, you don’t want to be paying for 990 users who’ve never used the solution.
  • Ongoing support: A vendor says they offer around-the-clock support. Terrific! But is there a separate charge for that?
  • Performance-based pricing: Some vendors tie their fees to performance, which incentivizes them to help you get the most from the platform. Confirm if the vendor’s fees are based on performance, and how.
  • Internal costs: It’s possible that a “configurable” platform can be customized to fit your needs, but your organization’s IT department will be responsible for making those changes. Be sure to factor in any ongoing internal costs associated with that platform, like upkeep and integrations with other systems and vendors.

By understanding exactly what the costs will be for the platform now and in the future, you can get a more accurate picture of the budget you’ll need.

What kind of ROI will the platform deliver?

HR tech is a huge investment, and savvy business leaders try to find the most cost-effective way to achieve their goals. As you analyze your options, it’s important to confirm that the vendors you’re considering have a proven track record, and will be around to deliver on the promises they make.

Look for a vendor with expertise and experience, and get the data to back up their claims. Ask them to provide examples from across their book of business of how they delivered meaningful ROI and improved business outcomes. If a vendor is willing to tie a portion of their fees to performance, even better. It helps establish a true partnership where both of you are motivated and working together towards common business goals.

There’s a lot of truth in the old adage, “You get what you pay for.” And when it comes to HR tech, it pays to take a strategic approach to choosing the right platform and avoid a quick fix. If you’re considering a cheaper option, make sure you’re not also cutting corners, because you will pay for it down the road. Quality may have a higher price tag today, but it can pay dividends down the road.

For more help in finding the right platform to meet the unique needs of your business, check out our blog and checklist on how to select a communications platform HR will use.