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As companies scale and their People Operations teams evolve, they have different demands from their HR Tech stack. This article describes the different priorities companies have at each stage of their lifecycle and the tools best equipped to meet their needs at each stage.
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It’s easy to get overwhelmed when looking out at the vast landscape of popular HR software. This is especially true for early stage companies that face endless challenges and limited bandwidth.
It’s important to remember that organizations require different things from their People Operations teams depending on the size and stage of the company.
Rather than trying to boil the ocean and drowning in software, it’s better to have a keen sense of your organization’s size and needs and then focus your efforts on finding the tools best suited for that stage.
Over time and as your team grows, you’ll be able to layer on evermore advanced functionality.
Here are the different stages a People Operations team goes through and the tools to prioritize at each stage:
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People Ops Priorities: During a company’s infancy, the People Operations team is often limited to ~1 team member. An early stage People Operations team member will be expected to wear many hats, but some of the most important responsibilities will include: compliance, hiring / onboarding and running payroll.
People Ops Headcount: Most companies have between 0 and 2 People Ops team members at this stage
Core HR Systems: Companies will often opt to use a Professional Employer Organization (PEO) at this early stage, since a PEO can outsource some of the compliance and payroll processing requirements for a business, while also providing enhanced benefits packages to employees. Some of the most common PEO vendors include Justworks, Rippling, TriNet and Insperity.
If a company decides against outsourcing and does not enter into a PEO, then they will pursue a lightweight Core HR system, such as Gusto, Rippling, GoCo or BambooHR
Talent Management Systems: Most early stages companies have very light investments in talent management. More often than not, compensation management is tracked in spreadsheets and performance management is done in an ad hoc manner by managers.
Recruiting Tools: Most early stage companies will have limited investments into their recruiting toolset. The most common approach is to pay for job postings on sites such as Indeed or LinkedIn. If a company does have an applicant tracking system (ATS), it is usually an inexpensive, easy-to-use one such as JazzHR or BambooHR.
People Ops Priorities: Once a company grows past 50 employees, the role of People Operations starts to change. At this stage, People Operation teams start to lay the groundwork for talent management processes. Additionally, People Operations teams are beginning to focus on process efficiency, bulk actions and employee self-service to make HR processes more efficient.
People Ops Headcount: Most companies have between 1 and 3 People Ops team members at this stage
Core HR Systems: The type of Core HR system that an organization needs at this stage will depend, in part, on the organization’s complexity. Companies that have workforces comprised of mostly salaried / white collar employees can continue to use some entry-level HRIS systems such as Rippling, GoCo or BambooHR.
However, organizations that have more complex workforce management needs (i.e., multiple FEINs, large hourly workforces, scheduling or job costing requirements), will often need to move beyond those entry-level HRIS systems and utilize mid-market HRIS systems, such as Paylocity, iSolved, Paycor, Paycom or ADP Workforce Now.
Talent Management Systems: At this stage, companies are beginning to run regular performance review cycles and are beginning to track employee engagement as a core metric. Companies will either look to a 3rd party point solution for these needs, such as Lattice, Culture Amp or 15Five. Additionally, most of the mid-market HRIS systems will offer Talent Management capabilities, but they will not be as robust or user-friendly as the point solutions.
Recruiting Tools: Once companies have someone who is dedicated to recruiting as their primary function, they will often invest in a more robust ATS system that can better capture candidate data, better incorporate hiring managers into a hiring process and create a better candidate experience. Popular choices at this stage include: Workable , Ashby, Greenhouse and Lever
People Ops Priorities: When companies reach a few hundred employees, the People Operations team is expected to become a more strategic partner in the business planning process. The C-Suite often expects more data and insights from their People Operations team at this point.
People Ops Headcount: Most companies have between 2 and 5 People Ops team members at this stage
Core HR Systems: At this point in a company’s growth stage, reporting and operating efficiency become very important. Many companies will decide to move away from their various point solutions and pursue more of an all-in-one strategy, so that they can consolidate their people data into one system and limit the amount of systems the People Ops team needs to manage.
If a company isn’t too complex, the mid-market HRIS systems can still serve as all-in-one options at this stage. However, most companies need to upgrade to mid-enterprise HRIS systems at this point, so they can have more control and configurability to build custom workflows and processes. The most popular mid-enterprise solutions include: UKG Ready, Dayforce and ADP.
Another option that we will commonly see is companies taking a two-tiered approach with vendors like ADP or Paylocity still providing their Payroll, Benefits and Timekeeping tools, but a more talent-centric and user-friendly HRIS like Darwinbox or HiBob providing the rest of their HR Tech stack.
Talent Management Systems: People Operation teams are often beginning to offer learning management and talent development functionality to their employees at this stage. A Learning Management System (LMS) is a popular investment at this stage in a company’s growth. Tools like Docebo, LearnUpon, Litmos and Absorb are popular mid-sized LMS options.
Recruiting Tools: As recruiting teams grow beyond a single individual, they will often upgrade their ATS to find a system that is more scalable and offers better reporting. The three popular choices at this point are Greenhouse, Ashby and SmartRecruiters.
Additionally, recruiting teams often need additional tools to enhance their recruitment efforts beyond what an ATS can offer. Companies will invest in proactive sourcing tools, such as LinkedIn Recruiter, Gem, or Hiretual to give them access to more robust talent pools.
People Ops Priorities: Once a company crosses this threshold, you often begin to see a high degree of specialization within the People Operations team. A Chief People Officer will oversee a team of specialists with a few people dedicated purely to recruiting, a few people dedicated to payroll and benefits and a few folks focused on talent development and the employee experience.
People Ops Headcount: Most companies have between 4 and 8 People Ops team members at this stage
Core HR Systems: At this stage, companies really struggle to get enough functionality out of any of the entry-level or mid-market HRIS systems, so the best option tends to be to stick with the mid-enterprise options mentioned above (UKG Pro, Dayforce and ADP). In recent years, both Workday and SAP SuccessFactors have begun coming down market with revamped pricing and implementation strategies which allow them to be a viable option in this segment too.
However, most mid-enterprise HRIS systems have limitations in certain areas of their platforms, and as People Operations teams become more specialized, they will look to replace some modules with more robust and specialized point solutions.
Talent Management Systems: One of the big initiatives from a People Operations team at this stage in their lifecycle is to begin participating heavily in the organizational and financial planning process. People Operations teams will invest in robust comp management & succession planning tools at this point, so that they can better manage budgets, standardize pay and prepare the organization for future growth. Most mid-enterprise HRIS systems offer this functionally, but there are also some point solutions such as Pave and HRSoft available.
Recruiting Tools: Once recruiting teams are using robust ATS systems, like Greenhouse or SmartRecruiter,s and are using proactive sourcing tools, they will begin to focus more deeply on the recruiting processes efficiency. Common ways to improve efficiency will be to find interviewing scheduling tools (GoodTime), video interviewing software (SparkHire) or candidate assessment software (Harver or Kodiak).
People Ops Priorities: Once a company hits 1,000 employees, it can be considered a full-blown enterprise. The process of specialization should be in full effect here and a People Operations team should expect to have sub-teams focused exclusively on recruiting, Core HR or talent development.
People Ops Headcount: Most companies have at least 7 People Ops team members at this stage
Core HR Systems: This is the point where companies often invest in their ‘final’ HRIS system. The most popular enterprise HRIS systems are Workday, SAP SuccessFactors and Oracle HCM Cloud. These systems have nearly infinite ability to configure to an organization’s needs, which allows them to serve a business no matter what shape their future organization takes.
However, these systems are generally expensive on both a subscription basis and in terms of the implementation and admin process. Most companies will leverage a 3rd party implementation firm to get one of these systems off the ground and most companies will also require a full-time HRIS manager.
Talent Management Systems: If a company is not satisfied with the talent management offerings in their enterprise HRIS system, they may look to an all-in-one talent management system, such as Cornerstone, PageUp, or PeopleFluent which are capable of bundling performance, comp, succession, learning and (sometimes) recruiting into a single solution.
Recruiting Tools: As recruiting operations scale up, companies will often need to invest in a Candidate Relationship Management (CRM) platform that is capable of organizing their vast candidate pools. Systems such as Eightfold or Phenom are popular choices to layer over an existing ATS system, providing more data, better operational efficiency and even AI to produce better recommendations.
Companies typically progress through stages based on their size and maturity, from startup mode to full-blown enterprise. At each stage, the demands on HR tech evolve, requiring different functionalities and capabilities to support growth effectively.
Priorities shift depending on the company's size and stage. For instance, in early stages, priorities might include compliance, hiring/onboarding, and payroll, while in later stages, strategic planning, data analytics, and specialized HR functions become more prominent.
For startups, leveraging platforms like Startup Stack for access to a marketplace of tech tools with perks and discounts can be beneficial. Additionally, lightweight Core HR systems such as Gusto or Rippling are commonly used to manage compliance, hiring, and payroll.
As companies scale, HR tech tools should focus on improving efficiency, implementing talent management processes, and enhancing employee self-service capabilities. Platforms like Rippling, Namely, or BambooHR are often utilized for core HR functions.
At this stage, companies often consolidate their HR tech stack for better reporting and efficiency. Mid-enterprise HRIS systems like UKG Pro or Ceridian offer more control and configurability, while point solutions like Docebo or Greenhouse cater to specific needs like learning management or recruiting.
