Panel discussion: Evaluating the best HR tools for compliance, employee experience, leave management and beyond
We brought together some of Cocoon’s community experts to share their insights on how to build the best HR tech stack, with tips on technology trends, how to scale, and getting exec buy-in.
If you’re in HR, you’re likely trying (and struggling) to keep up with all the HR technology trends
HR tech is on the rise and there are so many tools out there–some may say too many. The good: when companies find the right fit and combination of HR tools, they can significantly improve People teams’ lives and free up their time to focus on the things that deserve their attention. The bad: there are just too many options. Where do you even start?
Don’t worry, we’ve got you covered. We recently brought together some of Cocoon’s community experts to share their insights on the essential HR tech stack. Whether you’re an HR team of 1, a late-stage startup, or a well-established enterprise company, we promise there’s something you can take away from our community panel due to their incredibly diverse experience in HR:
You can watch the full conversation here or keep reading for the key takeaways:
Defining HR tech
Key takeaway: The definition is evolving and HR tech spans the entirety of the employee lifecycle.
Newfront is approaching the world of HR and benefits from a differentiated tech-forward lens (something we’re big fans of at Cocoon as well). Emily’s holistic view on the HR tech stack is: “What’s the human experience working at your company?” This can be very broad, anything from the first touch points during recruiting, to compensation, to performance management.
With over 20+ years of HR experience, Mindy has seen the definition of HR tech evolve: “Historically, we always thought of the HR tech stack being owned on the island of HR and having its own kind of separate strategy. As we’ve seen technology evolve and advance, we have some exciting opportunities to start to talk about how that HR tech stack is part of the overall digital workplace.” We’re moving from a place where HR tech tools used to mean only learning and development and performance management tools (which are still needed) to a place where we’re now thinking about how the tools can work together to improve the greater employee digital experience.
When to review your HR tech stack
Key takeaway: There’s a tradeoff between a full-service solution and having more control of data and analytics for early companies.
Vivek joined Benchling at 200 employees, and now they’re at 800 (a 300% increase!). With this growth, he’s seen 3 different tech stack evolutions from the TriNet PEO to using BambooHR and ADP to just recently implementing Workday. Here are his learnings from these different stages:
No matter where your company is, you have some core pillars you need to address:
System of record for people data
Bonus: if you’re doing global hiring, you have a different suite of tools required for HR compliance
These core pillars don’t really change, but the complexity of the suite of tooling does
Early days: this is when you don’t have many folks in HR, so you’re looking for a solution that can do everything for you. PEOs are great for this. Here’s when you may grow out of this stage:
You need more control over your data
You’re looking for more integrations to allow for a fuller suite of tooling
The pricing doesn’t make sense as you grow
As your company scales: You’ll start taking things in house because your needs shift. Here’s when you’ll find yourself in this stage:
Your company is looking to be more data-driven
You have the headcount to handle certain processes internally
Compliance becomes a key focus for your HR organization
Evaluating HR tools in today’s macro environment
Key takeaway: People leaders are prioritizing cost, personalization, utilization, and simplification.
From the broker / consultant perspective, Emily has seen a few trends that build on each other, but also create an added level of complexity.
Individual employees have different needs. The needs of a 30 year old who may be looking to start a family will vary greatly from someone later in life going through menopause or dealing with musculoskeletal issues. Emily notes that, “as heads of HR are looking at what their people need, it’s this realization that you can’t have a one size fits all solution.” This means some employers are trying to continue to retain and attract talent and provide the best benefits for their employees while also dealing with cost constraints.
As employers become even more cost-conscious, there’s been a shift among HR vendors to focus on utilization or outcomes. This could look like an employer with a number of benefits that address diabetes, musculoskeletal issues, and family planning. Within their organization, not everyone is using all three benefits so employers are only paying based on utilization.
Even though we’ve seen these great tools pop up in recent years, the HR tech ecosystem has become hard to navigate. Another angle people often forget about is the wildly complex healthcare ecosystem that HR teams are expected to be an expert in. This is where brokers and consultants can come in and be a huge help, because they have the deep expertise needed to help companies find the right tools for their specific needs.
How to get executive buy-in
Key takeaway: Balance business needs and cost to get your foot in the door with finance.
Position projected headcount vs. software costs
Vivek has a great relationship with his CFO, which reflects a larger trend that Emily is seeing across companies: “We’re starting to see more and more of this partnership between CHROs and CFOs because when you dive into the space, you really do start to realize how intertwined the two things are.” He’s found that one of the best ways to pitch software is to position it in terms of headcount. Here’s how he pitched using Cocoon as a leave management software solution to his team:
“Hey, if I can’t use a service like this, the odds are I’m going to have to get headcount. If we’re processing 50, 100 leaves per year. That’s close to a full time employee. The cost of a vendor is substantially more efficient to us”
Using projected headcount that would be required without using a vendor helps put cost savings into perspective for finance teams. Not only do you have to consider the overhead of additional employees, but you have to think about the management overhead as well—those costs can stack up fast.
Cite specific business needs and show how the tool will help address them
In some cases, you’ll want to use your individual business needs to make the case. Here’s how Vivek made the case for Workday at Benchling:
He noticed internal chatter about focusing more on compliance. Based on Benchling’s business needs, he was able to pitch Workday quickly by citing the specific ways the tool would help unblock the constraints they were currently facing.
To do this, it’s important to be really familiar with the metrics and drivers that matter to your leadership team. Which brings us to our final tactic from Vivek:
Deeply understand your leadership teams’ goals and priorities
When you build strong relationships with your leadership and executive team, you start to learn what resonates well with them. Here’s how Vivek tackled compensation when he first got to Benchling:
It was clear there wasn’t a great compensation structure in place but as he was meeting with the executive team, but there was an appetite for it.
He started by building out a spreadsheet to show what they can do internally and start to build the muscle of, “if you want something better than this, there is some tooling out there that can be really, really effective”
Building these relationships and understanding their needs will allow you to prime leaders and allow people internally to see that there’s often a better way of doing things to solve their problems
Mindy also points out that depending on the founder and executive team background, there may be a wide variety of experiences with HR tools. Someone may come to a small start-up from a larger company and just assume “Workday, right?” In most cases, wrong. It’s important to understand the leadership team goals and long-term vision for the business, which then allows you to “create a roadmap with a continuous improvement mindset that’s going to be able to grow as the business grows.” Some key questions Mindy asks the leadership teams she advises:
Does it plug and play with other things you may not need right now, but you’ll need in a year or two?
Using this forward-thinking lens allows employers to find the tools that can not only solve their current business needs, but also the things they’ll need to address in a few years.
“And if we can get [leaders] to think about that in earlier stage environments, they might make better purchasing decisions that are able to help them grow and scale fast, otherwise you often see them at 200, 300 employees, and now their systems are holding them back, and employees are getting frustrated.”
Understand your baseline metrics and use data to show the ROI
Emily mentions how important it is to care for employees (a company’s most important asset) because the costs can mount up quickly when you think about turnover, hiring in a competitive market, and what it takes to retrain employees: “There really is this very strong connection, I think, between the solutions that CHROs are pushing to say, we need to retain our employees, we need to make sure that they're happy and engaged with the ultimate goal that CFOs are trying to accomplish.”
More and more HR tools are showing cost savings year over year, making it easier for HR teams to make the case to keep the tools internally. Mindy points out that some of today’s solutions even let you pilot with a small group before releasing to the entire organization to verify impact. Regardless of how you roll a solution out, it’s critical that you understand your baseline metrics so you can track whether or not you’re moving the needle in the right direction.
Make sure all of your HR tools play nicely with each other
Key takeaway: Integrations are key right now, but there’s also a trend of consolidation we’re keeping our eye on. AI offers the opportunity for an even better employee experience with HR tools.
When advising clients, understanding how the tools interact with each other is incredibly important for Emily. A commonly overlooked aspect that becomes more pressing as you grow is whether or not your carriers play nicely with your tools as well. In Vivek’s experience, it’s also important to understand the quality of the integrations your tools offer–some may still require manual workflows for your internal teams so you’ll need to take those into account.
In today’s ecosystem, you also have to think about the long-term impacts of AI on HR tech tools and the overall employee experience. Mindy advises some companies that use over 66 tools (you read that right—66 tools). In most cases, employees aren’t logging into each of these software solutions individually to access the benefits, which adds an additional layer of complexity for them in understanding and using their benefits. Mindy sees AI having a huge impact here: “I truly think in the future, our employees aren't going to be logging into these point solutions. They're going to be going to an AI chat bot and assistant to be able to go to truly one digital front door to be able to help them actually focus on their work and be able to get to the information much quicker, which is really exciting.”
What do you want to hear about next from Cocoon’s community experts?
The Cocoon community is filled with so many experts, we love whenever we get the chance to pick their brains on the things top of mind for today’s People teams. We’re kicking off a quarterly series to hear from the best of the best People people. We care about what you care about, so let us know what events you actually want to see (or watch sped up while you knock out other work) by dropping us a note at email@example.com.