Caveat Emptor: Austerity and HR Technology

I’m not generally one to call for austerity, considering I often find myself the beneficiary of vendor largesse. But at last week’s annual HR Technology Conference, I noticed that an industry more or less emerging from macroeconomic famine might be enjoying the bull market feast just a little too much – and are recklessly spending money while ignoring the new realities of recruiting and talent acquisition.

The development of multi-tenant, fully configurable SaaS technologies has radically democratized the business model for vendors, essentially leveling the playing field. Minimal implementation costs, monthly licenses and consumer-grade user experiences that eliminate the need for most consulting or customer service premiums should be changing the way end users and employers alike evaluate software and solutions.

But as HR Technology goes, the status quo remains more or less unchanged even as the fundamentals of the market are irrevocably evolving to a point where the business models of the biggest players would, in any other market, have already rendered their crappy code bases and overpriced license fees to the dustbin of obsolescence.

They just have the marketing dollars to hide the fact that their software sucks.

HR Technology: Marketing Style Over Substance

Simply put, there are a ton of amazing startups out there that offer better products at a better price point than their more established counterparts, which seems like a no brainer for almost any business. It’s just that the tier one competition, with their big budgets and bigger booths, aren’t investing in the product – which should be the primary litmus test for adjudicating any technology (something that sounds obvious but simply isn’t happening).

Instead, the investment in continuous innovation is being bypassed, reallocated into unnecessary marketing spend that places a premium on show over substance, on selling to “decision makers” instead of building around actual end users, and this does a great disservice to everyone involved.

From the standpoint of shareholders, VC investors or PE plays, share of voice almost always equates to share of market – which is why it superficially makes sense to spend money on things like billboards at the airport, taxi cab display ads, and elaborate booths. After all, if your company has the cash, this sort of spending makes sense – and it must, one would think be working, considering those funds are on hand in the first place.

But where does the money for these Bacchanals and brand blitzkriegs ultimately come from? The answer, simply, is you, the practitioner.

And if you’re an actual end user of HR Technology, there’s a good chance that you weren’t in Vegas – or any trade show, statistically speaking –  because you’re too busy back at the office dealing with the legacy problems of legacy software to take the time to investigate how technology can actually solve these limitations, much less do due diligence on whether or not your account rep or client success contact is massaging their message.

And if you actually have a sales guy, you’re probably getting screwed, since SaaS should sell itself – and doesn’t charge a commission to a middle man for steak dinners, golf course deals or any of the other unnecessary overhead involved in marketing these technologies.

HR Technology: Roadmap To Nowhere

When you pay for HR Technology, you’re also paying way more than you have to for your technology to enable said steak dinners, bar tabs or boondoggles, whether or not you’re the actual beneficiary of this misappropriated spending. But it’s easy to buy into the big guys because, well, their product doesn’t scale, but their product marketing sure does.

This is a call to action for all HR Technology buyers (who were few and far between outside of the conference agenda, and most of them were there doing what effectively amounts to PR and pay-for-play programming disguised as word of mouth marketing): ignore the shiny objects and search for solutions with substance and which align with your strategy, which should never take a back seat to a vendor road map.

And if you’re not happy with your pricing or dedicating too many resources to supporting a shitty system, stop for a minute and ask: how much of my money is being spent outside the core product on stuff that doesn’t really matter?

HR Technology: Using The Power of the Purse

Chances are, the bigger the trade show booth, the more bought buzz that they’re manufacturing, and the more unnecessary intermediaries involved – remember, pure SaaS shouldn’t involve a whole lot of services, sales and support, or else it’s just a legacy product with some basic web enablement and a bunch of BS buzzwords that evidence the fact that the biggest players are market laggards, not leaders – the more they’re misallocating your money on stuff that doesn’t matter to companies and their employees, past and future, that these solutions should serve.

The market realities have changed. So too have buyer behaviors. But business in HR Technology remains stuck in an anachronistic era where the old enterprise model was applicable – and will remain stuck in the past, blowing through your budget on BS bells and whistles, until you realize that it’s not just you get what you pay for: you’re paying for things that you don’t even get.  And that’s almost as dumb as most of the shills these software providers are somehow selling you on.

The good news: you have the power of the purse strings. It’s just up to you to use them wisely.  Because your providers, more than likely, will continue to do you nothing but a disservice until you realize that you’re not going to move forward clinging to the same status quo. Even if that status quo sends you some swag every once in a while.

The best solutions don’t need to – the proof, as they say, is in the product.

By Matt Charney

Matt serves as Chief Content Officer and Global Thought Leadership Head for Allegis Global Solutions and is a partner for RecruitingDaily the industry leading online publication for Recruiting and HR Tech. With a unique background that includes HR, blogging and social media, Matt Charney is a key influencer in recruiting and a self-described “kick-butt marketing and communications professional.”