Selling Human Resources Software is Hard!

If you have been selling HRMS Software, HRIS systems or HR software for any amount of time, I am certain you will agree with most of what I have written here. If you are new to the industry, get ready for a lot of heart break. In fact, I challenge anyone to offer a product that is harder to sell than HRMS Software, HRIS systems or HR Software.

I have been selling HRMS software, HRIS systems, and HR software for more than 15 years. Here’s the scary reality. I have seen that if I show a hundred HR managers an HRIS application, at least 80 will express interest in buying. At most, 10 to 20 will get the approval for purchase. Based on my estimated numbers, this means that for every 10 HR departments looking for an HRIS product only 2.5 actually end up getting the approval and buying a system. The intent of this article is to explain why this happens and what you as an HR software sales person can do to avoid the pit falls. 

Why is selling HRMS Software, HRIS systems or HRMS Payroll systems so hard?

• You are not selling your HR software to the decision maker

More often than not, you will be selling your HRMS software, HRIS system or HRMS payroll product to the head of the HR department who will, in turn, sell to those with the authority to approve the funds. So to some degree, the success or failure you achieve in HR software sales will rest with someone else’s ability to sell your system. Welcome to HRIS system sales. Typical sales theory says you should, in this case, go directly to the decision maker. You can try, and you should, but it is important to remember that in most cases they are not the one with the direct need for a system. They are going to rely on human resources to make the determination of which product will work best for the organization. There is very little way around it; you sell to the HR department and they sell the concept to others.

Think about it.  In what other type of sales are you not selling to the decision maker? If you sell used cars, houses, or shoes, in all those cases you are working with the person with the ability to approve the purchase.

• Next to impossible to cost justify HRIS software

Selling anything often applies using some type of cost justification. I have seen some companies come up with detailed models that help to cost justify an HR software application. I have even worked on a few, but I don’t think they work very well. Frankly, too many of the estimated cost savings of an HR application are soft costs. Such as: each termination costs the company x amount of dollars.  So if through improved HR customer service and reporting HR is able to reduce the turnover rate from X to Y, x amount of dollars is saved. This may in fact be valid. The problem is ultimately your system will be sold to a finance or accounting person. I started out as an accountant. As an accountant, at least by education, let me tell you soft cost HR software savings will be a hard sell.

There are exceptions. If your HRIS or HRMS application includes in house payroll or a payroll hosted option that is less expensive than what the company is using, this is easy to calculate ROI. Recruiting systems are also easier to cost justify. If a widget company is paying X dollars to head hunters each year and you are able, with a recruiting solution, to hire ten percent more internally, there is a direct ROI statement that can be offered.

Yes, an HR system will save human resources a tremendous amount of time and benefit the entire organization but how much money is actually saved? Not an easy answer or an easy sale.

• Does the organization see enough value to invest in an HRIS system or HRMS software application?

When it comes to HR, in my opinion, there are two types of HR departments. There are companies that place great value on the benefits of HR and those that see HR as a cost center. It’s pretty easy to tell which is which. If you have a well staffed human resource  department run by a true HR professional, the company likely values HR and you will find you stand a far greater chance of getting approval than if you are working with an understaffed HR department run by more of a clerical HR person than a professional. If the organization has 700 employees and does not currently have an HR software system, why? The need is there. The benefits are there. Have they tried to get the approval for a system before and failed? The company would benefit from a system, so why have they not as of yet added one? The longer you work in the industry, the quicker you will become at seeing which organizations value HR and which don’t. If the organization you are working with does not see HR as offering value, you will have a tough time getting the budget money for a new HRIS system.

What can you do to improve your HRMS software or HRIS system selling process?

Now that we have presented the problem, let’s talk about the solutions. There are steps you can take, to some degree or another, to counter the problems mentioned above but still you are going to lose deals based on what I have offered above. The important thing is to make sure you are working and winning the deals that can be won and not losing those deals to your competitors.

• Qualify, qualify, qualify…… Your HRMS software or HRIS software prospects.

Years ago I had an interview with a large payroll HRIS software company. The VP of sales told me that they felt they were only closing the low lying fruit and were not closing the harder sales. I told him, the low lying fruit was exactly what I was going to try and close and to find as much of those situations as possible. He told me he did not like the answer. I was a little terrified because I could not back down at this point. I told him “Sorry, but it’s the truth.”  If you hire an inexperienced HR sales person, they are going to work the hard deals and six months to a year down the road, they will determine that the low lying fruit is where the money is made in HR software sales. I received the job offer but turned it down to start my own company.

As I mentioned above, those companies that don’t see value in their HR departments are less likely to invest in HR software than those companies that value HR. Before doing the demo, working up proposals, providing references and working to close a deal, you need to try and weed out those companies who have very little chance of getting approval for a system. Most often this is a question of cost. Let the prospect know early on how much your system costs and see what the reaction is or ask them what their budget is for a system.

Qualifications are not simply based on cost. It’s also a question of what the customer is looking for and why they are looking. If you ask them what their needs are and they indicate they must have a system that offers an integrated payroll package and your product does not, this is not a qualified lead. If you ask what their needs are or what problems they are currently having and they can’t provide an answer, this should also be a red flag. The more you qualify the leads of the prospect up front, the less head ache you will save yourself later on. Work the low lying fruit. If you ask why they are looking for an HR system, you might receive the ‘I’m outta here answer’ of “Well, we just wanted to see what was out there”. Thanks; Elvis has left the building.

• Learn how to be a consultant and a sales person to sell more HRIS software.

HR people are not IT people. You are not going to sell the technology to HR. You are going to sell the results of what your system can provide. In order to do this, you need to solve problems. The consultative sales process is pretty basic. Find out what the client is currently using and what problems they are having. Ask what they need a system to do and then show that your product corrects these problems and meets their needs. The better you are at this approach, the more likely you are to win the deal. This last paragraph is extremely important; you may want to go to Amazon and purchase a few books on consultative selling.

• Involve as many departments as possible in the HRIS system selling process.

When going through the sales process and demos with a prospect, I like to involve as many others in the organization as possible to show that the system offers value outside of HR. An HRIS system that provides value to the entire company has a greater chance of being sold than one that does not.

If your product offers a training module, make sure to involve the training department. Involve risk management with FMLA, workers comp and OSHA reporting. If you offer payroll, it is obvious that you will involve payroll and accounting. If your system does not but will feed data over to payroll, this is still a benefit to a department outside of HR. Then, of course, there are the benefits to employees with self service or managers with manager self service. I think you are getting the point, an HR system that streamlines information for an entire organization will be seen as having greater value than one that only benefits HR.

• Tie the benefits of the HRMS software to the goals of the organization.

Find out what the organization or the HR department goals are and show how your product can assist with meeting them. How many employees is the company looking to hire in the next year? Do they want to decrease turnover? Do they want to decrease costs per employee? If you can tie the benefits of your HRIS product to the company’s goals, you again stand a greater chance of getting the deal.

• Gain access to those making the decision.
 
As I have mentioned, you will fail to accomplish this more often than not but it is still worth trying. When performing the demo, ask HR to invite the decision maker to the presentation or ask for a meeting with this individual to determine exactly what their goals are for HR and the organization. As long as you attempt this connection, with the blessing of HR, the results will be beneficial.

• Advancing the HRMS software or HRIS system sell

The most powerful question in sales and, especially, HR system sales is: “What’s the next step.” Throughout the process, you need to make sure you are moving in a forward direction to close the sale. I provided a summary at the end of each meeting as to what my and the contact’s deliverables were. The first thing to do at the next meeting is to review those items.  At that end of that meeting the “What’s next” question pops up again. If you find you have deals sitting in your pipeline for long periods of time, try this approach to see what happens.

About the Author

Clay C. Scroggin has over fifteen years of experience in the human resources software industry. Clay is currently the President and owner of CompareHRIS.com , a web site dedicated to assisting HR professionals with their search, selection, implementation and use of HR software. If you are looking for HRIS or HRMS software, make sure to try our free HRIS Software Selection Tool.