As organizations navigate HR tech purchases, they often turn to a tried-and-true mechanism: the request for proposal or RFP. And this won’t fade away in 2024. In fact, HR leaders say that technology represents the top investment priority for their departments this year, according to Gartner.
The RFP provides potential vendors with detailed information about the project or service needs, allowing them to submit a proposal demonstrating how their offerings meet the organization’s requirements.
But does it always capture the information CHROs need to make an educated HR tech purchasing decision? Not by a long shot, according to data from Gartner. When the firm polled more than 3,000 HR software buyers, eight out of 10 said they experienced regret due to a poorly structured buying process.
Advice from Sapient Insights Group
The team at Sapient Insights Group recently shared advice for HRE readers, all about crafting RFPs for HR tech purchases. Ultimately, they suggest considering the scalability of underlying platforms, data-related implications and the program’s adaptability and user experience.
This firm has seen it all. Renowned for its independently funded HR Systems Survey, Sapient Insights Group is a landmark for human resource technology buyers. The report—considered the largest of its kind—encompasses 150-plus HR technology vendors within the 2023-24 edition. This data includes an active research community with more than 2,600 participants from 80 countries.
Beyond functionality and cost criteria, the Sapient team says HR leaders must further vet technology as vendors rapidly roll out developing functionality. As the months tick by, this process is unlikely to get easier because the HR tech market is projected to grow 5.41% by 2030, according to findings by Kings Research.
Because many HR teams use standard or repurposed RFPs, here are points that may go unnoticed in the 2024-and-beyond procurement process based on the guidance offered by Sapient Insights Group team members.
Alignment with business goals and challenges
Throughout the RFP preparation, emphasis must be placed on connecting the HR tech solution to the broader business objectives and challenges to be addressed. Identifying the expected business outcomes ensures a strategic alignment with organizational goals.
Prioritization of top requirements
Instead of drowning in an extensive list of features, organizations should focus on the top five or six significant requirements, often called the “big rocks.” This prevents the RFP process from being bogged down by concerns with less critical functionalities.
Role-based use cases and demos
Organizations should prioritize role-based use cases and, equally important, role-based demonstrations during the RFP process. This ensures a tailored understanding of how the proposed HR tech solution aligns with specific job functions within the organization.
Vendor’s technology and business partners
A comprehensive RFP should hit the vendor’s critical technology and business partners. Understanding these relationships provides insights into the solution’s broad ecosystem.
Mobile experience and security measures
Details regarding the mobile experience, technology requirements for optimal use and robust data security measures should be explicitly outlined in the RFP. Role-based demonstrations on mobile devices commonly used by the workforce are essential for a thorough evaluation.
Vendor’s financial security and M&A plans
The RFP should encompass an assessment of the vendor’s financial stability. Additionally, understanding the vendor’s plans or the likelihood of mergers and acquisitions is crucial for predicting the long-term viability and evolution of the chosen HR tech solution.
Service packages and levels
While RFPs often delve into service offerings, they may fall short in specifying service packages and levels. Clarity on the depth and scope of services can influence the overall user experience.
Ethical AI development models
In the era of advancing artificial intelligence, RFPs may not sufficiently address ethical considerations in AI development. Inquiries about the ethical frameworks guiding AI, openness in training models and the ability to understand and adjust AI decision-making processes are elements of responsible and transparent HR tech solutions.
Data transfer and system integration
RFPs sometimes lack detailed explanations regarding how data enters and exits the system. Address concerns related to data security, privacy and system integration with clear communication about data transfer processes.
Implementation and training opportunities
RFPs may neglect to inquire about system-related knowledge transfer and ongoing training opportunities. Ensure the workforce is adequately equipped to navigate HR tech for a smooth transition and sustained user proficiency.
Dashboard and reporting capabilities
Dashboard and reporting capabilities are touted, but sometimes this is overstated. RFPs should inquire about the flexibility and variety of formats available for data that supports the organization’s needs.
Two-way vendor partnership
Opportunities for a two-way partnership with the vendor—such as participation in customer forums, advisory boards or beta testing initiatives—may not be explicitly addressed. Establishing collaborative channels enhances the vendor-client relationship and contributes to the continuous improvement of the HR tech solution.
Use the RFP to underscore the importance of tailoring the user experience to the specific audience. For instance, if the solution serves the workforce, the experience should target employees over administrators or managers.
Related: ESG considerations when purchasing HR tech
Evaluating system scalability
Ensuring scalability in HR tech involves specifying regions and languages, addressing customer service adaptability, identifying the platform and server locations, and incorporating mechanisms for continuous improvement in the RFP process.
Regions and languages
Specify regions and languages for employee, manager and administrator use, considering not just translation but also compliance with tax laws, employment regulations and linguistic nuances.
Customer service function
Outline options for expanding customer service to adapt to business changes—confirm ongoing support is equipped to handle organizational growth and evolving needs.
Identify the platform on which the system is built (e.g., AWS, Azure). If built on an internal platform, delve into system stability, maintenance and the potential for developing adjacent applications through Platform as a Service (PaaS) options. Side note: Be sure to involve IT counterparts in the RFP process.
Specify where servers are located, acknowledging the importance of physical location considerations in certain countries.
Metrics for implementation and adoption
Establish metrics to gauge implementation progress and ongoing application adoption levels, identifying a measurable approach to success and user engagement.
Dashboards and reports
Create dashboards and reports tailored to different audiences, presenting usage trends and insights for continuous improvement.
Security and privacy considerations
Attention to data security and privacy is imperative, necessitating details on storage, encryption, access levels and vendor partnerships, plus due diligence to investigate any historical security issues.
Detailed data security requirements
Obtain details about data security, including storage locations, encryption measures, data transfers, access levels and required security clearances. Ensure alignment on terms—for example, is your definition of a “part-time employee” compatible with the vendor’s definition?
Vendor partners and security measures
Identify all vendor partners with access to data and inquire about the security measures in place to safeguard sensitive information.
Past security breaches
Conduct due diligence to research any past security breaches involving the vendor, gaining insights into their track record in maintaining data security and privacy.
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