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Last year, Hayley Williams, Group Head of HR at SME financing company, 365 Finance knew that the time had come to do something to improve the efficiency of its payroll.
Hayley Williams
Group Head of HR, 365 Finance
“At that point, we were outsourcing pay to a small payroll firm, but cracks were beginning to surface,” she recalls. “Errors were happening; mistakes were appearing and we were fielding lots of the same questions.”
It didn’t take a genius to know that a different solution was needed – and for the business to buy and deploy its own technology. But most HR professionals could be forgiven for thinking that they need to be geniuses when it comes to knowing what tech is even out there; what it does, what questions they need to ask of providers, what pitfalls to avoid, and what the scope of any technology roll out should be. And, in most cases they are not.
Too much complexity causes bad buying
“It’s undoubtedly the case that even trying to understand the direction the HR software market is even going – because everything seems to be moving so quickly – is extremely complicated,” says Williams.
And it seems that this is a problem that many of her peers have had bitter experience with.
According to Gartner research in 2024, a massive 83% of HR technology buyers regretted the system they’d eventually forked out money for, with additional data from Capterra last year suggesting firms have frustration with at least one system they’d bought within the last 18 months.
An additional problem, however, is that anxiety around IT spend is arguably only set to increase, as scrutiny of HR budgets becomes ever-more microscopic, and greater weight is put on HR’s shoulders to get whatever they buy ‘right’.
Simon Tsolakidis and Deborah Rosén, two former HR managers who now work at Hailey HR say these worries are all-too familiar.
Key lessons:
- Paying for licenses during a stalled implementation is more common than organisations realise, and the costs accumulate fast. Build implementation milestones and go-live deadlines into contracts, with protections if they're missed.
- Capability claims made in the sales process must be tested through scenario-based demonstrations, not taken on trust.
- Requirements should be written in precise, functional terms — not left open to vendor interpretation or assumptions.
- When a system is clearly failing, the instinct to persist and recover the investment can make things significantly worse. Knowing when to cut your losses and have the contractual ability to do so matters.
(Case study with help from Silver Cloud)
“We hear of absolute horror stories;” says Tsolakidis, “of HR departments getting locked into seven-year contracts, systems not actually doing what enthusiastic salespeople claimed, and even charging excess fees because the buyer doesn’t query them.” Rosén adds: “Our own research suggests 50% of buyers say the system they opt for doesn’t meet their future needs. We’ve also found 32% of HR buyers find that employees themselves – the people supposed to use the new technology, and take strain off HR – often aren’t using it as intended. This further impacts the real ROI of getting a new system in the first place.”
How can software be ‘better bought?’
So what are HR professionals realistically able to do to be able to ‘buy better’? And is dissatisfaction with what they eventually purchase more down to ‘them’ not dong their own homework?
Perhaps just as pertinent - should HR professionals take greater responsibility to actually know what’s out there in the market, and to educate themselves about IT so that they can ask all the right questions?
“I’ve had HRDs pull me aside and say a software rollout ‘has’ to go well, because otherwise their job is on the line,” observes Helen Armstrong – CEO and founder of Silver Cloud. The big problem is the sheer scope and breadth of products out there.”
Silver Cloud is one of a growing number of intermediaries who act as advisors to HR departments, and will also independently separate the substance from the spin, and advise HR departments on which provider will best suit an HR department’s needs. She says the company was born out of a need to protect organisations from blindly accepting the claims HR tech providers often push.
We hear of absolute horror stories of HR departments getting locked into seven-year contracts, and systems not actually doing what enthusiastic salespeople claimed
“It’s not that suppliers take advantage of HR professionals in an unethical way,” she argues. “But often companies will go in at, for example, a much higher price to match the most expensive system, and then if they don’t get push-back, a client can end up over-paying.”
She adds: “We can often cut the price down by an average of 20%. The real issue however, is that it’s hard for HR people to educate themselves on the precise ins and outs of a system, and what it can do now, and in the future. This can often only be learned through experience. People who have managed a system know what they need to know, but often, many who are new to buying a system don’t know often know precisely what they need, which makes them susceptible to grand claims.”
