How Small Businesses Can Tackle HR Tech Evaluation and Implementation

HR technology has gone from a nice-to-have to a must-have. A market of almost $40 billion, HR tech is seeing popularity with a range of organizations – small, medium, and large. It’s not a matter of whether businesses need to invest in HR tech, it’s now essential to identify how soon they can do it.

While the range of HR tech tools is vast, and not every business needs the whole range, small businesses can prioritize which technology they need based on urgency as well as a long-term vision. And being a smaller organization, investing in HR technology may be easier because it often applies to the whole organization, and the whole team can be onboarded to use the new technology quickly.

What are the considerations for small businesses when evaluating and implementing HR technology? Let’s take a look.

Evaluation of HR Tech for Small Businesses

In the case of evaluating and implementing HR technology, SMBs don’t have the luxuries that enterprises do.

Phil StrazzullaOpens a new window , founder of Select Software ReviewsOpens a new window , tells us, “Large enterprises have the luxury of consultants and internal teams dedicated to buying and implementing software. These teams generally can spend a lot of time looking at many different types of software over the course of months or years. SMB teams are too busy doing their day-to- day job, and so have to be much more efficient when looking at software. This means you are probably doing one demo per shortlisted vendor, and then making a decision versus enterprise, which may do many rounds of demos with different sets of stakeholders.”

For this, define the specific use cases of that technology for your vendors and ensure that they demonstrate the tech for that use case. This means you need to be very specific about what you expect the technology to do – whether it is just automating the onboarding process or introducing a training module for compliance purposes to the onboarding technology.

For successful implementation, Strazzulla says, “My best advice is to get the internal stakeholder buy-in that you need before you even start to look at new vendors. If your C-suite is bought in, you won’t have budgeting issues, and when it comes time to roll it out, you will be more successful.”

And to get C-suite buy-in, the most effective method is to demonstrate how the decision to purchase a specific type of HR technology will tie in with the larger organizational purpose, how it will benefit the business – not just a specific team/function – and what the ROI of investing in a specific technology will be.

The benefit of the cloud – especially for SMBs – is that implementation timelines have significantly reduced. PwC’s HR Technology Survey 2020Opens a new window found that leaders who had used the cloud for their core HR functions reported a 44% increase in productivity and efficiency. Implementing cloud-based HR tech also caters to the remote work environment, which is likely to become a permanent feature of the workforce with more employees requiring it now.

However, small businesses may also have to opt for multiple point solutions to deal with specific needs, which may be a better option than purchasing a suite of solutions that offer facilities that don’t apply to you. Getting technology that a) fulfills a specific function, and b) serves business goals, is essential.

Know where you will measure the return on investment. If you want to purchase recruitment software, what will the metrics of ROI be? – Improved quality of hire? A larger candidate pool? Shorter time to fill? Having comparative data available is critical so that you can identify that the technology has indeed proven useful.

Next, how will this investment tie in with the larger business goals? Will measuring quality of hire prove helpful in assessing its impact on business outcomes? This mandates a discussion between HR leaders and the C-suite, where HR needs to be prepared to answer these questions.

“The main key when buying HR software for SMBs is to have an easy-to-implement solution that you can test quickly to see if it meets your needs. Beyond this ability to see with minimal effort if this is a good software for your business, I’d also look for some key features such as an employee database, payroll, benefits, employee engagement, onboarding, and paid time off functions,” says Strazzulla.

This may work well in the short term. When managed by a smaller group of people, you can benefit from choosing targeted solutions for a specific challenge – such as payroll only or scheduling only. For larger groups, or if you have plans to scale up, consider the cost implication of choosing small and scaling up later.

Consider the cost benefit of the technology. If it can make your department more compliant and thus avoid penalties, it may be a cost worth considering. Consider the user of the technology. If it is a recruiter, hiring manager, or a payroll professional, make them a part of the purchase decision. Understand their pain points and let them choose the features that will suit their workflow the best.

Learn More: How to Evaluate HR Technology Post COVID-19Opens a new window

Implementation of HR Tech in a Small Business

The Sierra-Cedar 2019-20 HR Systems SurveyOpens a new window reported that small and medium organizations leverage internal stakeholders for HR tech implementation at 53%. However, as an alternative, 37% of small organizations will partner with the system vendor for systems training, project management, and strategy guidance. Only 10% outsource implementation to third parties.

In small businesses, HR is often a small team with limited resources. In such a case, leveraging vendor expertise for implementationOpens a new window may prove most viable. Strazzulla agrees, saying, “You can definitely hire a consultant, especially for more complex data migrations. However, most vendors will have a strong customer success team to help you set up the software.”

Whether you choose to outsource implementation or allow the vendor to guide you, the implementation process requires a dedicated individual who can communicate with the external party and manage operations internally. This individual will require the decision-making power and resources to ensure the project is implemented within a specified timeline.

Project owners may be individuals or teams comprising HR and IT, who are good communicators, to convey to vendors the challenges in implementation and work with them to identify possible solutions.

They will also need to understand the vendor’s training process so that it meets employees’ learning styles and accelerates the adoption process.

While it is safe to assume that data collected by any HR tech platform should go to HR and IT, should managers also be empowered with that data to take critical employee-related decisions? Yes. It is not vital to include them in the implementation process, but do consider how the technology can be made valuable and accessible to them as well.

No matter the size of the workplace, the employee experience must be considered in the HR technology purchase process. And this extends to implementation as well.

Learn More: Should You Build or Buy HR Dashboard Apps?Opens a new window

Encourage HR Tech Adoption

While purchasing technology is one part of the ball game, implementing it is the other. Resistance from employees and leaders – even when the purpose and goal of using a particular type of HR technology is clear – is common. This, then, requires a look into the culture of digitalization in the organization before purchasing any technology to simplify the implementation process.

With the radical transformation of the workplace ecosystem, the adoption of HR tech has never been more critical. The goal of purchasing and implementing an HR tech stack should be to optimize HR processes and employee self-service and contribute to the broader business goal, transforming HR from a cost center to a revenue center.

As a small business, what advice do you have for HR teams of other businesses on HR tech evaluation and implementation? Share your tips with our readers on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window .