If your organization is among the estimated 70% to 80% of employers using cloud-based HR technology,* you're probably paying more in subscription fees than the value you're getting in return. The value is there; the problem is that you aren't using it. You can take some solace in the fact that you're not alone. (How many people do you know who maximize the functionality of their smartphones?)
You may already have what you're looking for
Gallagher's HR tech consultants help organizations optimize their HR technology. Organizations initially come to us wanting to change providers because they are looking for XYZ functionality. It often turns out that their current provider offers XYZ functionality and updates it every three months. Understandably, the business team is unaware when you consider the following scenario:
You moved your software to the cloud to save time on the formal upgrade process. You eliminated your HR technology specialist position because 70% of the job was managing this process. Now comes the quarterly upgrade. Maybe you received an email about it but deleted it because you thought it was junk. When you logged on today, the menu bar that used to be on top is now on the side. There are new buttons, but you're not sure what they do. You spend the next two days figuring out where the "old" functionality now resides, and it's back to business as usual. This scenario repeats itself every few months. Through it all, you continue to pay the provider's bill.
The best and worst about software in the cloud
The best thing about cloud-based software is its ease of upgrading. The worst thing about cloud-based software is its ease of upgrading.
Great new features go unnoticed because few organizations have formal processes to optimize their software or bother to read the release notes. Innovation is part of the cost associated with a subscription. However, if you fail to take advantage of the upgrades you're paying for, you might as well have stayed with an on-premise system.
Challenges and benefits of optimization
Optimizing your software isn't as simple as it should be. Ideally, optimization support would be part of your provider's service package. In today's competitive market, service is often negotiated out of the price, leaving the responsibility for optimization with employers — most likely lacking a structured process and the resources to manage optimization. The result is missed opportunities for increased efficiencies and productivity.
Aside from the bottom-line benefit associated with greater productivity, HR leaders may find it much easier to sell the CEO on the next HR technology investment if there's a clear return on the existing one. Also, your competitors may be using the same or similar platform. You're giving the competition an edge when they leverage the upgrades, and you don't.
Optimization recommendations for stakeholders
Consider the following recommendations to help maximize investment in HR technology:
- Employers: Understand what you're buying. If optimization support isn't included in your service contract, ask if it's available. The cost may be more than offset by increased efficiency. Dedicate specific resources to ensure someone is paying attention to what the provider sends out and can identify opportunities to leverage new tools. Maintain regular communication with your provider and create a formal plan to govern that relationship (see 10 Tips for Governing the Service Provider Relationship).
- Service providers: Offer true optimization service — more than just an email advising an upgrade is coming. Reach out proactively to clients to discuss how a new feature can impact their bottom line. Not only will this effort reduce service calls, but you'll generate loyalty that supports client retention.
- Benefits advisors: Stop negotiating the service out of the price on behalf of your clients. Instead, educate them on the value of optimization and support. Don't be afraid to ask for help from a consultant to rethink processes and procedures. Finally, when a client suggests a change in provider to gain functionality, check with the current provider to see if it's already available.
Gallagher can help
Talk to your Gallagher advisor about a strategic approach to purchasing new HR technology or optimizing the technology you already own.
