When is Generic Software Not Enough?
- By: Tom McKeown
- November 28, 2016
We’ve all been there. Sniffling and sneezing at the drug store looking for that night time cold medicine that will help you sleep away what ails you. When you get to the medicine aisle you see the NyQuil at $9 sitting right next to the generic store brand at $5. You know the store brand contains the same ingredients as NyQuil, so you buy that one and get healthy on the cheap.
Of course that equivalency does not apply across all types of products. Cars often have the same body styles and different engines, clothes have the same look with different fabrics, and software can be named anything but still not perform the job. When looking at HR software in particular, beware of the generic software module offered by a “suite vendor” who has no history in that specialty. They may think they have what you want, but you are likely to find in practice that their generic offering is way short of your needs.
In a recent survey by Bersin and Associates, nearly two thirds of HR buyers said they would be unwilling to sacrifice features to get a single vendor solution. There are two applications in HR that most often need special attention, recruiting and compensation. Recruiting is unique because it never stops. Talent and HR suite companies that did not begin with a recruiting or an ATS offering, are often blindsided when they see how hard that application gets hit when live. Also, the amount of integrations that are necessary with a recruiting application, such as background checking, assessment testing, and video interviewing, often require a flexibility not easily done by a platform vendor.
Compensation applications are also unique because of the complexity and the number of plans required by most organizations. As the following table shows, the large majority of companies use multiple factors when calculating employee pay. The formulas get even more complicated with senior management and executive plans, which can involve as many 8-10 factors to determine total compensation. So it’s important to have a system that is very configurable, and solution experts who know compensation.
Another reason compensation applications need deeper expertise is that they are dealing with budgets. The calculation and disbursements made affect the bottom line, governance, and shareholder value. This is a function not to be left to a “jack of all trades”, because the ramifications can be in the legal realm.
So if you are shopping for medicine, it might be fine to just read what’s on the label. But, when shopping for software, talk to a company’s clients. Their words on what a solution can do, will help you make a decision that will let you sleep much better at night.