When HR Technology Loses Focus
Developing a successful technology product is hard. One of the most difficult things along the way is balancing the pull from new, and possibly bigger customers, to extend your product in […]

Developing a successful technology product is hard. One of the most difficult things along the way is balancing the pull from new, and possibly bigger customers, to extend your product in ways that distract you from your original brand promise to early customers.

I see it again and again. Talent acquisition offers a good example – and warning – for vendors and buyers alike. There are an incredible number of point solutions entering the market for talent acquisition on an ongoing basis. Recruiting is a universal business challenge. It’s a challenge that can be solved in many ways. It’s a challenge where the customer benefits from leveraging a new approach to differentiate themselves before “everyone starts doing it”. You don’t need to have years of HR or recruiting experience to have experienced the issue, or have an idea to address it. It’s an HR technology segment ripe for entrepreneurs in, and outside of, the world of recruiting and HR.

A talent acquisition product can enter the market, fueled by the passion of it’s founders and the excitement of early adopters and industry influencers for a new approach. They can pick up buzz and early momentum. Early sales traction begins. A few high growth brands that look good on the website and in the investor pitch deck might sign on and provide incredible customer advocacy along the way.

Then something happens.

Maybe the simple, easy to use, easy to implement, and easy to understand its value, talent acquisition product catches the eye of a few large enterprises. Good news, right?

Maybe. Maybe not.

If the HR technology was always promising to grow into a product for large enterprise environments it’s great news. However, if the technology was always promising to be the best solution, easy to use, and adding value quickly, it could be the news that stalls the vendor’s growth while simultaneously moving the product’s value further from the early customer’s definition of success.

Large enterprises in any HR function have issues that are driven by compliance and risk more so than smaller, high growth companies. It’s not that compliance is not a factor for a high growth environment, it’s just that high growth, or emerging, companies tend to put the responsibility of compliance on their managers and processes. Not in a technology RFP or requirements doc.

The result if vendors lose focus? One result is that you end up with 10 pounds of user interface in a five pound bag. User experience goes on the decline. And worse, the market starts to confuse the product’s value. It starts to look more like everyone else. Vendors and customers both start to struggle with feature creep in ways never expected.

And what of those early customers? They take the brunt. They signed on for a vision. A promise. They go from brand advocates to concerned users and then possibly to brand detractors.

I’m seeing it happen now with some of the crop of ATS, recruitment marketing, and sourcing tools that entered the market in the 2000s. For some it’s the draw of displacing Oracle (Taleo) or IBM (Kenexa/BrassRing) or SAP (SuccessFactors). For some it’s the feeling that offering more features expands their addressable market or somehow makes them more marketable, and they move their products in directions that don’t make sense to customers. For some it’s not knowing when to say “no” to a feature request.

What’s a vendor to do?

Keep your focus. Be clear on who your customer is from day one. Be sure that your message to the market and your product roadmap align with this future. Don’t confuse being under-resourced in your go to market efforts with your need to build new features.

What’s an HR technology customer to do?

The subscription model, that recurring revenue the vendors all want is also your biggest ally in this regard. If you’re working with start-ups to stay on the edge of innovation, don’t sign multi-year deals. If you do sign multi-year deals to get a break on pricing, then make sure you have an out-clause with a reasonable notice period. Demand “termination for convenience”.  You’re buying the right to keep your data in the cloud and use an application. You’re also paying for the “ease of switching” solutions that is finally paying off with the newer vendors. It’s not scary to leave your HR tech if you need to any more. Data migration doesn’t have to be the longest pole in the tent any more. Make sure you have access to clean data if and when you decide to leave – when you want it – on demand.

What do you think? Why do so many vendors/products lose focus? What should a customer do when that happens? Let me know in the comments, or Get in touch. I’d love to hear your thoughts!

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