Selecting an HRIS with a decent price point is a balancing act. You want a system that is high quality enough to save you money in areas of your organization that need improvement, but you don’t want to break the bank paying for the system every month or year. The following are some test questions that can help you to determine whether your HRIS price point is right for you.
Is the Price within Your Budget?
The first question that you are likely to address regarding HRIS price is whether the price point is within your budget. You may pay one upfront cost coupled with a yearly maintenance cost, a single price, or a monthly price for your HRIS. It is important that this price is not over your budget, as an HRIS that is too pricey may put strain on your bottom line and adversely affect your business.
Is Support Labor Costing you a Bundle?
If you try to go too low and select an HRIS that is bare bones, you may end up paying more than you bargained for in the form of supporting labor. If HR professionals have to spend serious hours performing tasks that higher priced HR software could perform automatically, it may make more sense to upgrade to a slightly more expensive model. This is a sweet spot that may require trial and error to figure out.
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How Much Are You Paying Third Parties?
HRIS software may be comprehensive or may link up with third party software. In many cases, companies decide to stick with the third parties that they have been using, opting for HR software that is easy to integrate rather than switching processes over. This option may end up costing much more than selecting a system that is more comprehensive.
There is a trade-off, however, as the employee labor and downtime costs associated with switching systems over must be calculated. While companies may eventually save money by switching processes over from third parties, the savings may take time to realize.
Are Updates and Upgrades Pricey?
Updates and upgrades will inevitably be needed to keep even the highest quality systems up to date. These small, periodic expenses may add up and tip over your budget for your HRIS. It may be wise to find a vendor that includes automatic updates or that will give you an accurate estimate of how much updates and upgrades will cost you per year based on historical information from companies in your industry that use the software.
Is the ROI Worthy?
It will not be possible to determine the true ROI of a system until after you have implemented it and used it for a while. Calculating your ROI and using it to assess the worthiness of a system may help you to determine whether you should stick with the system or switch to a new one when your contract is up, however. Try to estimate the ROI before you commit to a system to get a general idea of whether the ROI will or will not be worthy, then track the actual numbers to determine the true ROI later.