Four Quick Tips to Get a Better Deal on Your Next Human Resource (HR) Solution Purchase or Renewal

By Rich Staas

Director of Client Services, NPI

April 19, 2016

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Artwork Courtesy of Ltd

“The Workplace” has morphed over the last decade. New generations in the workforce and new trends in performance and human capital management have precipitated a new crop of HR software solutions and vendors. Companies are also searching for better ways to train and educate their workers, and that’s driven advancements in learning management systems (LMS), performance management systems (PMS), succession and career development, and other solution types.

While some companies prefer to purchase these solutions from a single provider, others source from different vendors. Regardless of your preference, there are a few things to know before going into your next HR solution purchase or renewal – things that will inevitably save you money across the full term of your vendor agreement:

1. Pricing is all over the map for HR solutions. Prices vary greatly between providers and, as with most IT vendors, NPI has seen a lot of pricing disparity among individual transactions from each vendor. Benchmark your purchase to know if you’re getting competitive pricing.

2. Competition in the human resource IT sector is fierce – leverage it. HR solution vendors are fighting for market share in a highly competitive and fragmented environment. That makes competitive leverage all the more important during the vendor selection process. Regardless if you prefer to sole-source, keep multiple vendors involved to ensure pricing, discounts and incentives are optimized.

3. Beware of bundled deals and payment terms. Vendors will make it financially attractive to purchase more up front, but may want money upon contract execution. Make sure to align the payment terms with your implementation plans, especially on a subscription.

4. Commit users conservatively. Some vendors will look to get you to commit to a rollout schedule with increasing users and revenue to them each year. This revenue is part of the forecast for subsequent years and the sales rep may already be spending that expected commission. Be conservative with the committed license counts, it’s much easier to add users than try to get the vendor to provide relief from the contracted schedule.