The HR software landscape in 2016

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hr-software-landscapeHi, I’m Simon,

If you’re not aware, I founded Staff Squared back in 2012. Since then I’ve been fortunate enough to interact with 100s of business owners and managers. The daily struggles that many of our customers recount to me are the same that I faced whilst growing my software business Atlas. Ultimately my struggles are what drove me to create Staff Squared, and now drive our customers to use the app too!

To date the vast majority of the posts on this blog have been created by my team with quite a specific HR focus. I’d like to contribute to their hard work by writing on the subject of the pain leaders and managers feel when growing a business. My ten years growing a bunch of businesses means I’ve got plenty of grey hair and experience to share and help others.

Before all that good stuff, let’s kick off 2016 with a candid review about the state of the HR software industry shall we? The pace of the industry has increased since we launched Staff Squared. It’s a good idea to set the scene for what has happened, and where I see the industry heading.

Unlike accounting software, which has been around since forever, HR software is a relatively new concept. Online HR software is an even more recent development, with big VC backed companies like Zenefits only appearing in this space in 2013. The majority of the HR software businesses that have popped up, especially those in the UK, are privately funded SMEs. Most are growing organically (aka bootstrapped) using funds from an existing HR consultancy business or having taken on a relatively small amount of investment.

With so many new HR software businesses hitting the scene, there’s what I would describe as a “customer land grab” taking place. Some of our competitors make wild claims about what their software is capable of. Other competitors take a one size fits all strategy, assuring their trial customers that their 1,000 employee strong business will love their software even though their largest account to date is a team of 100 staff.

As a result a range of HR software attempts to be all things to all men, and offers the promise of modules for recruitment, expenses, training time management and much much more. They convince customers to sign up on the promise of a new feature or module going live “any day now!” and put their development teams under immense pressure to deliver a huge amount of functionality in a short space of time.

As an example, and I kid you not, I recently saw a new competitor (from a large established company that should know better) launch their app to massive fanfare. So of course I created an account to check it out. I attempted to fire up a report on absence, and was hit with a COMING SOON message delivered by some smiling (grimacing?) character they’ve used as their brand ambassador. Somebody in their team made a decision to release and market a half-baked application plastered with COMING SOON placeholders. I get it, I know we shouldn’t polish an app to completion before getting customer feedback but this was shoddy.

This approach bothers me. It is damaging not just for their reputation, but for the HR software industry as a whole, and it needs to stop. First impressions and all that.

We too have been guilty of trying to keep up with competitors in this way until I decided to stop the madness in early 2015 and told my team to tell potential customers of Staff Squared that they should “buy Staff Squared for the features and benefits it provides today and not those that might be added in future”. Hat tip to Duane Jackson for sharing this gem with me during one of our conversations about starting and growing a SaaS business.

Since then we’ve been able to double down our efforts to ensure that every release is a solid and positive step forward.  Our customers have never been happier.  You’ll note for this very reason we don’t have a recruitment module in Staff Squared, nor do we have any immediate plans to add one! I want Staff Squared to do a small number of jobs incredibly well, rather than lots of jobs poorly. I should probably admit that I’m obsessive about software quality. It’s a problem I will one day seek appropriate counselling for.

Putting aside specific features and functionality, I feel that the market for HR software continues to be buoyant and is therefore incredibly exciting. I’d hazard a guess that 90%+ of SMEs in the UK don’t even know that HR software is a thing! How crazy is that?

Like all industries, HR and HR software in particular are an echo chamber of best practices, staff management techniques, policies, processes and a bunch of other crap that busy business owners and managers simply don’t have time for.

Let’s look at the data; there are in excess of 200,000 businesses with between 10 and 49 employees in the UK. The vast majority of those businesses are far too busy to have checked online for a software app that will help them to better manage their staff.

So what do we do in 2016? We know that HR software genuinely helps teams work more efficiently. I couldn’t make that statement when we first launched Staff Squared but 3 years in and I’ve got reams of customer feedback and raw data on how much more efficient their businesses are using a HR app. That’s powerful, because HR software isn’t (and shouldn’t be) a hard sell. We simply put information out to the right people about how HR software makes a difference and benefits business.

Doing this whilst ensuring that the software we deliver is of a high quality will ensure the HR software industry continues to grow from strength to strength.

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