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How To Get Your HR Tech Stack Right First Time

April 27th, 2021 10 minute read
Harry Langdon
Harry Langdon
Customer Success Specialist
There are more HR technology solutions that ever before, but the efficiency of your team and ability to hire and retain the right people is dependent on getting your HR tech stack right.

There are obvious things that suggest you have a problem—like a clunky software interface, or inaccurate reporting slowing your team down.

And there are less obvious things like challenges introducing new software, or finding a vendor that doesn’t match your style of working from an implementation and support perspective.

Ultimately, mistakes in your HR tech stack design result in missing out on the best hires and losing great people to competitors who get it right.

In this article, we highlight some of the key things to consider when building your HR tech stack including:

  • One tool for everything vs. best-in-class solutions
  • Cloud-based SaaS vs. On-Premises
  • Configuration vs. customization
  • Avoiding data silos
  • Future-proofing your HR tech stack
  • Incremental change vs everything at once

Planning an HR tech project?

Use this business case template to make sure you've covered all the bases.

What is an HR tech stack?

An HR tech stack is a collection of integrated software that helps your HR team manage the whole employee lifecycle—from attracting job applicants through recruitment, onboarding, employee engagement, and offboarding.

One tool for everything vs. best-in-class solutions

No one piece of software can be exceptionally good at everything. And when your competitors are investing in best-in-class tools for each part of the employee lifecycle your candidate and employee experience becomes uncompetitive.

There are HR tech vendors that offer “all in one” solutions covering most of the employee lifecycle from recruitment to offboarding, and there are vendors that focus all their attention on one thing.

While there are benefits to the “all in one” tools (one software license, all your data in one tool, and only one vendor contract to get approved by IT, legal, and finance) there’s a problem.

No one piece of software can be exceptionally good at everything. And when your competitors are investing in best-in-class tools for each part of the employee lifecycle your candidate and employee experience becomes uncompetitive—you lose out on hiring the best candidates, and you don’t have the tools to support you in offering the experience your team wants and deserves.

Over the past 5-10 years, the number of HR tech vendors has grown significantly and the best of them have focussed on being exceptionally good at one or two things—applicant tracking, background checking, video interviewing, testing, onboarding, payroll, employee engagement, performance management, employee surveys…

But the biggest concern among HR and IT teams is that working with lots of different vendors means data gets siloed and the tech stack becomes difficult to manage.

That’s no longer the case.

While some of the traditional HR tech vendors charge extortionate amounts of money to allow you to integrate their tools with other platforms, modern HR tech vendors actively encourage you to do so and don’t charge for the privilege. Most will even build new integrations for you (usually at no cost) and have out-of-the-box integrations with other popular vendors in the ecosystem.

Today, most organizations invest in best-in-class tools for each part of the employee lifecycle. They have to if they want to stay competitive.

But there are still many large enterprises that prefer to buy from traditional “all in one” vendors (nobody ever got fired for hiring IBM).

But those large enterprises likely have a well-established employer brand and can afford to pay top salaries and offer best-in-class benefits that enable them to attract and retain good people—often despite their processes, not because of them.

Cloud based SaaS vs. on premises

Almost all modern HR software is cloud-based and provided by software as a service (SaaS) vendors. This means that instead of installing and maintaining software on your own servers, you access it over the internet, and everything’s managed for you by the software vendor.

In the early days of cloud-based SaaS, IT and security teams were concerned about increased security risk. There’s something comforting about looking at the server in your office and turning the key to lock the door.

But over the past decade, cloud-based software has become the norm and companies have become more comfortable having their data hosted in the cloud. Most SaaS vendors use hyper-scale cloud infrastructure provided by companies like Amazon Web Services or Microsoft. These cloud service providers invest significantly more in security than any one company could by trying to secure their own on-premises infrastructure and, as a result, cloud-based software that’s been built in the right way is usually much more secure than an on-premises alternative.

Almost every modern HR tech that you invest in will be cloud-based SaaS, and there’s pretty much no downside for you:

  • You’ll usually get access to software updates at no additional cost
  • If you have suggestions for improvements to the software that other people want too, they’re likely to get built at no cost to you
  • Software updates are managed by the vendor
  • All of the servers and other hardware are managed and maintained by the vendor
  • Implementation timelines are much shorter and less expensive
  • It’s easier to integrate all your tools and ensure the right data is in the right place
  • Your data is likely stored in data centers complying with the most stringent security standards (and you’ll be able to validate that with the software vendor)

Configuration vs. customization

If your last HR software implementation project was long, drawn-out, and involved lots of custom development and consultants you’ll be pleasantly surprised by how the configurability of modern people tech makes implementation significantly easier.

In the past, an HR software implementation project would require a huge amount of work from a team of software developers, infrastructure engineers, and a team of consultants to implement. There would be a significant amount of customization work, servers to install, and complex testing to complete.

But almost all modern HR tech is now multi-tenanted SaaS. This means the same software with exactly the same code is used by hundreds or thousands of companies, all hosted on the same servers. To enable this, vendors have invested heavily in offering a huge amount configurability.

Rather than having software developers customize the software for you, there are enough built-in configuration options that you can make the software work in the way you need changing the configuration options rather than having developers write custom code.

This enables vendors to offer much more competitive pricing, puts you in control (i.e. you can change the configuration options yourself without asking for help from the vendor’s support team or hiring a team of consultants and developers), and means implementing new software is much faster, easier, and less expensive for you.

If your last HR software implementation project was long, drawn-out, and involved lots of custom development and consultants you’ll be pleasantly surprised by how the configurability of modern systems makes implementation significantly easier.

Avoiding data silos

One of the most important parts of any HR tech project is ensuring data won’t be stuck in one system, or the wrong system. To ensure that won’t happen look for vendors that:

  • Have an open API with public documentation
  • Have a growing ecosystem of integration partners
  • Integrate with low-cost middleware providers (like Zapier) that enable onward integrations with thousands of other tools without writing a line of code
  • Are willing to build new integrations that benefit their customers at low cost (or no cost) to the customer
  • Don’t charge for API consumption
  • Don’t charge for API access

Most organizations will have a primary system for recruitment (usually the ATS), a primary system for managing employees (usually the HRIS / ERP solution), and a number of best-in-class tools that are integrated with each of these. The ATS will always push hired candidate data to the HRIS / ERP system.

Future proofing your HR tech stack

The modern approach of investing in best-in-class solutions for each stage of the recruitment process and then properly integrating them enables you to swap out parts of the stack or introduce new tools in the future.

But ensuring the software you choose today will stand the test of time is still important—your team doesn’t want whiplash from constantly changing HR tech.

If you want your HR tech stack to stand the test of time, here’s what to look out for:

  1. Ensure your vendor’s going to be around for the long haul. That doesn’t mean you just choose the biggest. You may be better off choosing a vendor that’s smaller but growing and profitable, than a larger vendor that’s hemorrhaging customers.
  2. Ensure your vendors investing at least 20% of their product development time in building their ecosystem of partners and integrations. Deep integrations between best-in-class tools give you the most flexibility for the future.
  3. Does the design and user experience feel like it’s up to date, or does it still feel like Windows 95? If it feels like Windows 95 it’s likely the product’s not being developed to keep up with changes in the candidate market and recruitment best practices as fast as other vendors. Plus who likes to use old, clunky software?
  4. Will you get access to new features the vendor releases as part of the deal, or will you have to pay extra for these in the future?
  5. If you’re planning to grow your team, can you lock in the price increase as your usage increases?

Incremental change vs everything at once

Whether you’re implementing HR tech for the first time or making improvements to your existing systems there’s a choice—to do everything at once, or run a staged implementation.

Most organizations we work with choose some kind of staged implementation. They still have day-to-day operations to deal with, and they don’t want to overwhelm their team.

Regardless of whether this is an upgrade to existing systems or putting a system in place for the first time, organizations usually invest in their core tools (HRIS and applicant tracking system) first.

When upgrading an existing HR tech stack, the area where people teams are struggling the most is usually recruitment or onboarding. And most organizations with more than about 50 people have some form of HRIS or payroll system already, even if they don’t have an ATS.

Therefore, for upgrades, a new applicant tracking system is usually the first priority—made easier because recruitment is part of the overall process with a well-defined start and endpoint and often looked after by a dedicated talent acquisition team.

Once the ATS is integrated with the rest of their existing HR tech stack, they’ll either look to improve other aspects of recruiting and onboarding through integrations with the ATS (for example, introducing a new background check or testing vendor) or look to make an upgrade of the HRIS the next priority.

Taking on too much at one time can be a risk and result in pushback from the business and leadership from a time, financial, and risk perspective. Show you’ve done your homework by preparing a staged process for change.

On the topic of planning the project, it would be remiss of us not to mention a common challenge see with organizations that are taking a giant leap forward in terms of modernizing their HR tech stack.

If you’re currently using software from an older more traditional vendor, this can affect the approach you take when it comes to implementing new software.

Some (not all) of these vendors charge extortionate fees for allowing you to integrate with other systems. Sometimes this is just an up-front fee, but they often charge for the use of that integration on an ongoing basis.

So, for example, if you’re using an older platform that includes an HRIS, applicant tracking system, payroll system, and onboarding platform and you want to start your upgrade by replacing just the applicant tracking system and onboarding platform you may find yourself paying some chunky integration fees until you finally move to a new HRIS vendor too.

Often, the savings you can make in other areas from implementing a new tool will far outweigh the cost of any integration with your old software (especially if you’re looking to replace that tool in the medium term) but this will need to be carefully pitched to your broader team and included as part of the budget when you present your business case.

Planning an HR tech project?

Use this business case template to make sure you've covered all the bases.

About the author
Harry Langdon
Harry Langdon
Harry is a Customer Success Specialist at Pinpoint.

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