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When buying HR software, one of the key decisions that a buyer needs to make is deciding between: 1.) an all-in-one HRIS system from a single vendor or 2.) opting for a best-in-class approach that involves multiple standalone vendors.
Twenty years ago, buyers did not have the option of getting an all-in-one system because technologies were so siloed. Payroll tools only processed payroll and ATS’s were solely focused on recruiting.
However, over the past fifteen years, vendors have broadened their offerings. Payroll companies started offering time tools, then performance, then recruiting, and on down the line. Soon you could get every module from a single provider; and many buyers decided to take this approach.
But in the last five years, as there has been a resurgence of modern onboarding, performance, learning and recruiting tools, the pendulum has started swinging back towards the best-in-class approach.
Many buyers are still split on which approach they should take, and there isn’t a one-size-fits all answer. It’s all about what makes the most sense for your organization. Here’s how you can decide:
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The foundational element of an HR technology stack is the Core HR system. This is the system that houses your employee information, collects time data and processes payroll. Once a Core HR infrastructure is in place, companies can then look into Talent Management. Talent Management includes the set of tools that help you recruit, develop and retain your workforce.
Most all-in-one HRIS systems started off as payroll tools - think Ceridian, ADP, UltiPro, Paycom, Paylocity, Paycor, etc - and these platforms have built up their expertise around Core HR. While these systems can all offer Talent Management modules too, they have less expertise in those areas and their products have less depth.
If solving Core HR is your number one priority, and talent management is not as much of a focus yet, then you should consider an all-in-one HRIS platform. The ATS or the LMS that your all-in-one provider offers may be a bit lean on functionality, but you don’t need the extra bells and whistles until your HR tech strategy has solved Core HR first.
One of the big advantages of taking an all-in-one approach is that you only have one vendor covering all of your HR technology needs.
This means that employees only have to download one app and remember one login, in order to handle all of their HR technology needs. It also means that when things go wrong, you only have one customer support contact to reach out to for help.
Another reason that companies opt for an all-in-one provider is because data typically flows more effectively throughout a single system than it does across multiple systems.
This can help reduce the amount of manual re-entry that administrators have to do. It can also make reporting easier, since generating reports from an all-in-one system is often easier to do than downloading and combining reports from multiple systems.
One thing to note, however, is that not every all-in-one system is actually a single database on the back end, so it can be the case that you get an all-in-one provider and still have to do manual reporting or re-entry. (The OutSail team can help let you know which systems are built like that).
For companies that already have an effective Core HR infrastructure, starting to build a best-in-class suite can make sense.
Once companies have sufficiently automated many of their transactional HR tasks, they can start to focus on more transformational tasks, such as proactive recruiting, employee engagement strategies, modern performance reviews and more.
If your company is at this stage, it can make sense to look for best-in-class providers in each of those verticals rather than adding another module from your current provider, which may not deliver the level of sophistication that you need.
One great thing about best-in-class providers is that they are singularly focused on delivering a top notch ATS or LMS or Performance Management system.
Because of this dedicated focus, these companies can oftentimes deliver a more complete set of features and functionality. These companies are also often on the cutting edge in their industry and rolling out new features ahead of their more broadly-focused peers.
Additionally, you can find a great deal of thought leadership from standalone providers because they are so deeply entrenched in a single vertical.
Another compelling reason for taking a best-in-class approach to your HR suite is because most all-in-one vendors are already doing the same.
With a few notable exceptions, most all-in-one HRIS systems have added new modules by either acquiring or white labeling pieces of technology that they don’t offer in-house.
When all-in-one HRIS vendor’s take this approach, they are essentially admitting that they can’t be a market leader across every module. If that’s the case, then maybe it makes sense for your team to only buy their most effective modules and go looking for best-fit tools to fill in the gaps.
An all-in-one HRIS system is provided by a single vendor and includes a comprehensive suite of HR modules, such as Core HR, payroll, time tracking, recruiting, performance management, etc. A best-in-class HRIS system, on the other hand, involves selecting multiple standalone vendors, each specializing in a specific HR function, such as recruiting, learning management, or performance management.
The decision depends on your organization's priorities and needs. If your primary focus is on establishing a robust Core HR infrastructure, an all-in-one system may be more suitable. However, if your organization is looking to enhance specific areas like talent management or requires advanced functionality in certain HR functions, a best-in-class approach might be preferable.
All-in-one HRIS systems offer simplicity, as they provide a single vendor for all HR technology needs. They can be more efficient in terms of data flow and support, as employees only need one login and administrators have one point of contact for customer support. Additionally, they can be advantageous for organizations prioritizing Core HR functions.
Best-in-class HRIS systems are ideal for organizations focusing on specific HR functions like talent management. They often provide deeper functionality and domain expertise in their respective areas. Additionally, standalone vendors may offer more advanced features and stay at the forefront of industry innovation.
While best-in-class systems may offer superior functionality, ensuring integration and compatibility between multiple vendors is essential. Look for vendors with robust APIs and consider utilizing middleware solutions or integration platforms to facilitate data exchange between systems.
