It's HR Budget Season: Your Guide to Evaluating Software

Vanessa Kahn
October 4, 2023
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Let us set the scene. It’s a Monday morning at work and you’ve been tasked with looking into a solution to help improve and operationalize one-on-one meetings. You get on a demo call with a sales representative. Five minutes into the call, you realize they don’t offer the right solution for your organization, despite the compelling marketing language on their site. On top of that, they’re way out of your price range. 

We’ve all been there. But choosing vendors to build the right HR tech stack for your organization doesn’t have to be a nightmare. 

With HR budgeting season upon us, we know software selection is top of mind for many professionals. You might be working with a limited budget or planning for your next fiscal year. In fact, Gartner recently reported that 25% of 2023 HR budgets decreased, compared to 12% in 2022. It's time to make sure you're making the right decisions.

We admire your dedication to selecting the right HR software. After all, HR tools affect everyone on your team. So, when is the right time to start looking for HR tools? We’d argue that the time is now. If you haven't noticed, 2024 is just around the corner and it’s time to make sure you have everything you need to attract and retain top talent. From our experience, it takes companies an average of three months to research and evaluate HR software. It’s time to get started. 

Luckily, you’re not alone in this arduous journey and you’re already in the right place. In this blog, we’re laying out the playbook for researching, evaluating, and purchasing the best HR tools. On your mark, get set, evaluate!

-> If you're comparing software programs or vendor partnerships, download our free template: The HR Vendor Evaluation Scorecard

Evaluating HR software: your game plan

The idea of too many choices is not a new one. In fact, it was coined by psychologist Alvin Toffler in his 1970 book, Future Shock. The "choice paradox" feels especially apt to describe the experience of choosing HR software; it can lead to indecision, and above all, frustration. 🤯

Luckily, we have an IDEA for you. Well, more specifically, we have the IDEA acronym for you. This system of evaluating software will help you avoid buyer’s remorse. For more on the idea behind IDEA and a comprehensive list of the best tools for your company, read more about how to build your HR tech stack. Ok, let’s break it down: 

Identify your specific needs and areas for improvement: 

Before you even look at software, it’s important to identify gaps in your current company. For example, you might conduct manual performance reviews that are implemented differently across teams, using spreadsheets and emails for documentation. This system produces inconsistencies and affects team morale and pay equity. You determine it’s time for performance management software.

You start thinking through what’s working well with your system and what needs to change in order to keep your employees engaged. A good place to start might be with an employee survey. From there, you can build a list of criteria for your software search with must-haves, nice-to-haves, and nonstarters. Proving that software meets your must-haves can make it easier to convince yourself and your leadership team that you chose the right one.

Determine your priorities:

Now that you’ve heard from your employees and created your ideal software criteria list, it’s time to prioritize. Depending on your budget, it might be impossible to find a solution that checks off all the HR boxes. That doesn't mean that you have to settle for a mediocre solution. Prioritize your existing list and be sure to consider your current and future needs when making decisions. Features you might need include applicant tracking, learning and development, employee incentives, payroll processing, and employee engagement and perks

Establish your budget: 

You can’t put a price on employee engagement, but of course, you will have to stay within a predetermined budget when evaluating various tools. Though budget may technically restrict you, it will also free you from wasting time attending demos for products with costs that are out of your price range. Before you spend your time getting on a demo call, ask for pricing details, and don’t bother joining if the price isn’t right. 

Ask the right questions: 

It’s helpful to create a small task force for decision-making around HR software. Once you have a team in place, you can tackle important questions like:

  1. Does this software integrate with our existing tech stack?
  2. Will this work as our team continues to scale?
  3. What sort of onboarding process is involved?
  4. What gaps are left after we purchase this software?
  5. Does it comply with legal and regulatory rules?
  6. Does it support our remote and/or hybrid work environment? 
  7. How long will it take to launch this solution? 
  8. What are the penalties for canceling our existing solution? 
  9. What kind of customer support is offered? 
  10. Which timezone is the implementation team based in? 
  11. What does the onboarding process look like?
  12. What learning materials will be at my disposal during onboarding? 
  13. Can you share stats on user adoption?
  14. How often can we expect major software updates? 
  15. Which locations does your software serve? 
  16. If requested, can you provide references? 

HR software: 4 steps to put your plan into action

Now you’ve got your plan in place and it’s almost time for game day. But not so fast—there is still more data you need to collect before even reaching out to vendors. 

1. Ask for recommendations

The most valuable tool is right at your fingertips, and better yet, it’s free: your network. To help you determine a shortlist for software to solve your unique problems, we recommend reaching out to your network of fellow HR professionals to sift through the marketing jargon and sales deals and get real, candid insights on the software you’re considering. When we say “network,” we don’t only mean those you already know—we mean HR professionals who have experience with the software you’re considering and have no incentive to be dishonest or overly generous about their experience. Here’s where we recommend collecting your data. 

It’s easy to get overwhelmed with choices when choosing HR software. Luckily, you’re not the first to evaluate software, and you won’t be the last! Tap software-selecting veterans by posting on LinkedIn a list of software categories you’re looking to fill and asking for recommendations. You can use the sample copy below if you’re getting writer's block on how to ask. 

Sample post: 

Calling all HR professionals! (Company name) is looking for a new (software category) solution. We need a solution that can accommodate (number of employees), (countries you operate out of). Ease of use is a priority. If you have experience with software in (software category) we’d greatly appreciate your recommendations and insight. Please weigh in with a comment.  

Once your request for recommendations is posted, make sure to record the results of your impromptu poll and add it to the case you’re building to present to your leadership team. If you haven’t gathered by now, record-keeping during the selection process is essential. 

Bonus tip: If you’re part of any LinkedIn groups, Slack communities, or online forums, like Reddit, we recommend posing your questions to those groups too. 

2. Check out review sites for third-party perspectives

Another free source of detailed and mostly candid feedback is review platforms like G2Capterra, and TrustRadius. Once you’ve entered your search terms, you can filter your results by highest average rated, relevance, or most popular. When considering the highest-rated options, make sure you’re looking at how many reviews resulted in the star average. Though quantity doesn’t always result in quality, we’re more likely to trust a star rating with thousands of data points over one with only a few. 

If you’re looking for more tips on using review sites to help with your software selection, check out G2's How to Choose the Right Software Vendor. 

3. Check out our list of top HR software programs

We put together our picks for the best HR software. It breaks down everything from the best tools for onboarding, benefits, payroll, and beyond. It also acknowledges the power of your HR tools is stronger when combined; no single HR software can solve your HR woes. We always recommend you validate any recommendations with third-party data (like the aforementioned review sites), but we think this article will give you some inspiration to start your search. 

4. Ask for references from vendors

Don’t be shy to ask for references from vendors once you get further in the buying process. It can feel awkward to ask for references from a salesperson with whom you have developed a rapport. But, remember, their job is to develop a relationship with you and they want to give you the necessary information to sell you on their service! Plus, providing references proves they have nothing to hide and increases credibility. Here’s a simple way to ask a vendor for a reference: 

Hi (first name), 

We’re so excited about the prospect of moving forward with (vendor name). The next step in our vendor selection process is to speak with some of (vendor name’s) references. Can you please provide us with the email addresses of 2-3 of your customers in similar industries as our organization? We’ve included a sample of the types of questions we might ask references below. Please feel free to let them know answers can be provided over email and it should only take 10 minutes of their time. 

Sample Questions: 

  • Why did you end up choosing (vendor name)? 
  • How long have you been using (vendor name)? 
  • Did (vendor name) adhere to the agreed-upon timeline and budget? 


The team at (Company name) 

Bonus tip: Benefitexpress has a great list of questions to ask references themselves once you get in touch. For a low-stakes way to ask references to engage with you, consider creating a survey with your priority questions and asking references to respond via email. 

Game day: launch vendor communication

Reach out to vendors!

You thought we’d never get to the point where you reach out to the vendors, but we’ve arrived! Aren’t you glad you did all that pre-work so you can have more productive and efficient conversations? Us too! 

Our first and most important recommendation is to limit the number of vendors you reach out to. You don’t want your software search to turn into a full-time job, so decide how many different platforms you want to learn more about based on capacity and stick to your plan. If you have assembled a task force for choosing vendors, make sure you check in with your team about their bandwidth and other work when scheduling demos.

Now that you’ve selected your list of vendors, let’s walk through how to prepare for a successful vetting call. First, prioritize the three questions you want to be sure to ask on every vendor call so you can compare and contrast answers from different vendors.

Use this vendor scorecard template to fill in priority criteria and rank each vendor! Have this spreadsheet pulled up during the call so you can fill it out as you listen to the demos.

Use your task force to help attend demos, take notes during calls, and bounce ideas off of one another. After each demo call, ask your task force to rate the vendor on a scale of 1-5 in terms of meeting your software needs to get a pulse on cultural fit while the conversation is fresh in everyone’s mind. Limiting the survey to one question will help make sure you get the answers you need from your team. 

Once you’ve completed your demo calls, make sure to schedule a retrospective meeting to gather opinions on all the software programs you evaluated. This is also a great time to solicit feedback on the selection process itself so you can iterate in the future. From here, you can begin to build your case for the leadership team on which software to go with and why. 

Bonus tip: If you want to make sure your team is engaged and participating, consider making this meeting fun by offering to buy coffee or lunch to thank them for their time and participation. No one can resist free food— it is actually proven to aid in building community and cohesion which never hurts a decision-making process. 

-> If you're comparing software programs or vendor partnerships, download our free template: The HR Vendor Evaluation Scorecard

Track everything for transparency and efficiency

Note-taking, meeting recordings, and teammates to keep you accountable, will be your best bet at keeping track of the software you’re vetting. It’s like when you’re making an elaborate meal and you challenge yourself to clean as you go; it’s annoying at the time, but your future self will thank you! After all, you’ll need tangible proof points to reference when trying to convince a questioning leadership team why you need a new tool. Not to mention, meticulous record-keeping creates transparency on your team and provides insight into vetting decisions.

Here are our recommendations for the most efficient way to keep your vendor analysis straight: 

  • Create a spreadsheet to keep track of who you speak with, price, pros/cons, and more. You can use our vendor scorecard if you’re looking for inspiration.
  • Create a folder in your digital asset manager (like Google Drive) to save all the materials vendors send you. Pro tip: make subfolders for each of the vendors you’re considering to keep things organized. You’ll thank yourself for all the email searches you won’t have to do. 
  • Create a notes document and take notes on each call you get on with a vendor. This is a great piece to delegate if you have a team helping you with your search. 
  • Create a slide deck of your top three vendor recommendations with pros and cons for each—or if you’re feeling fancy, a SWOT analysis for each. Fill this document out along the way to make your life easier when it comes time to convince the buying team of a new software’s value.

The takeaway

You’ve made it to the end of the buying process. The journey won’t always be easy, but it will be worth it. And remember: don’t burn bridges! You never know when you may need to revisit software tools. Salespeople are humans too. No one likes being ghosted and product feedback is always appreciated. Now go forth and find the right software for your business! 

Want more budget planning resources? Download our free template!

If you're evaluating your current vendor partnerships or HR tech stack, we've got the perfect resource to help you. With our free HR Vendor Evaluation Scorecard you can easily: 

📝 Record details about software features or vendor calls.
📩 Organize contact information and follow-up materials.
🤑 Compare annual and per-seat costs.
💯 Rate vendors to help you make the best decisions.

HR vendor scorecard cta


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