How Weighted RFPs Can Help Guide the HR Tech Buying Process

Not understanding the real problem can be a huge problem for companies looking to bring in HR and payroll solutions.

After all, choosing HR technology solutions has never been more important or more complex for small and medium-sized businesses (SMBs). Yet, many buyers begin evaluating vendors, going through product demonstrations and comparing features before they’ve fully defined the business problem they’re trying to solve.

According to Rick Torrence, chief sales officer at PrismHR, one of the biggest mistakes organizations make is beginning to evaluate HR technology vendors before establishing what success really looks like. For HR outsourcers (HROs), that type of approach means spending their time focusing on prospects who aren’t actually ready to buy. And for those prospects that do move forward, it could also mean misaligned priorities that surface after the contract is signed, which could lead to churn because the solution never matched the problem the client needed to solve.

That’s why weighted Requests for Proposals (RFPs)—basically a scoring system where different levels of importance are assigned to various selection criteria—have become such an important tool for workforce technology buyers and for the HROs guiding them through the process.

Hear PrismHR Chief Sales Officer Rick Torrence’s thoughts on RFPs for HRO tech on WRKdefined’s Joey’s HR Lounge podcast hosted by Joey Price.

Weighted RFPs

Being an HRO in today’s business world means understanding the industries you work with, whether it’s healthcare, technology, hospitality or something else, and the ones you’d like to work with. There’s no shortage of HR, payroll, workforce management and HCM solutions available in the marketplace, so HROs need to understand not just those industries but their clients’ actual business challenges. Often, clients are not even sure how best to articulate what those challenges are.

Many potential customers focus on product features, demonstrations and tactical frustrations while overlooking the organizational issues that actually drive meaningful change. As a Professional Employer Organization (PEO), Administrative Services Organization (ASO) or payroll service bureau, it’s your job to help them see past that, identifying their real business challenges, aligning stakeholders, and showing how the tech and services you provide solve them. That’s also where the deeper business relationship gets built.

This is why weighted RFPs can play a key role in the process. They help set both the HRO and the client up for long-term success rather than deliver outcomes that the buyer did not expect.

According to Rick Torrence, PrismHR’s chief sales officer, an unweighted RFP often signals that an organization hasn’t fully defined its priorities.

Most buyers create extensive lists of requirements. The problem is that no solution delivers everything perfectly. Without ranking priorities, every feature appears equally important, which can make objective evaluation nearly impossible. When criteria aren’t weighted, something predictable happens: decision-making shifts from business needs toward subjective preferences.

In that scenario, vendors are selected because they provided the best demonstration or just responded the fastest. Buyers may leave a meeting believing they made a great decision only to discover later that the chosen solution doesn’t address their core business challenge.

Are You Solving a Business Problem or Just a Process Annoyance?

Torrence argues that just being able to save an organization 30 minutes a day of their individual or collective time is rarely enough to drive successful transformation.

One of the most common HR technology buyer mistakes is confusing a tactical frustration with a strategic business challenge, he adds.

An HR manager may want to eliminate manual work. A payroll administrator might want faster reporting. A department leader may want to save time on administrative tasks.

Those improvements matter, but they don’t always justify organizational change.

“You have to focus on the business’ problem and not an individual’s,” Torrence said.

In other words, you and they should be thinking about challenges holistically. The business has to feel the pain, and the business leaders need to understand the pain. Without a clear definition of that business problem, changes won’t occur regardless of which HRO they choose.

This is where advisory-oriented HROs can create tremendous value. Rather than immediately recommending a platform, they can help clients uncover root causes by asking questions such as:

• What business objective is being impacted?
• Who experiences the consequences?
• What happens if nothing changes?
• How will leadership measure success?

These conversations often reveal challenges that technology alone cannot solve and create a stronger foundation for evaluating solutions.

HR Technology Decisions Are No Longer HR Decisions

Another thing to keep in mind is that HR no longer owns workforce-related technology purchases alone.

A modern PEO or HCM platform affects nearly every department within an organization. Finance depends on payroll data. Operations relies on workforce visibility. IT must consider security, integrations and governance. Executive leadership needs measurable business outcomes.

As a result, successful technology evaluations increasingly require alignment across multiple stakeholders, which means successful sales techniques require a holistic approach.

Since organizations that approach HR technology implementation as a companywide initiative tend to make stronger decisions, you must be able to show the value to the full organization and how key challenges will be met through the platform. Conversely, it’s also important to recognize when prospects have different priorities or disagree on the problem that they’re trying to solve.

For HROs supporting prospects through workforce technology decisions, stakeholder alignment should be treated as a prerequisite and not as an afterthought.

Today’s HR Buyers Need More Than Technology

Small businesses continue to struggle with understanding the full range of workforce solutions available to them, including the role an HRO can play in reducing administrative burden and helping them grow.

They also are likely confused by the differences between the PEO and HCM models in general. Do they need the co-employment model (PEO) to help them get better benefits for their employees or is their business growing to the point where they can start thinking about more of a self-service model with payroll and benefits through technology (HCM) that includes as little or as much support as they need?

Torrence explained that many business owners are still unfamiliar with how a PEO model helps organizations gain access to benefits, retirement programs, compliance support and workforce services that might otherwise be difficult or prohibitively expensive to obtain independently.

Technology, he added, has fundamentally changed the conversation.

Years ago, software solutions were often viewed as a support component of HR services. Today, as you’re aware, technology is a key part of the value proposition. SMBs have long sought an even playing field with larger organizations when it comes to competing for talent, so the services and technology you provide helps them do just that.

Today, SMBs expect to be able to enjoy consumer-grade experiences, automation, self-service capabilities and AI-powered tools to help them make better decisions and generate content—such as drafting email messages to employees—faster than ever.

Provide the Service

HROs that are best positioned to help clients navigate today’s business challenges and expectations are often those already serving as workforce advisers. PEOs, ASOs and payroll service bureaus like you sit at the intersection of technology, compliance, HR, payroll and business operations, which makes you uniquely qualified to guide smarter workforce technology decisions for employee-related functions.

That’s why Torrence recommends including your services team in the RFP process to give prospects insights into how the team will work with them to troubleshoot issues and provide support and recommendations on ways that would help create a better overall tech experience for the prospect should they choose your company.

Building a Weighted RFP

To set your prospects up for success, let them know that the most effective approach for businesses evaluating tech providers is to rank evaluation categories before comparisons begin, which might look something like this:

The specific rankings will vary, of course, but the principle remains the same: priorities should be established before evaluating vendors.

Questions You Should Be Prepared to Answer

Buying any type of technology can be stressful for any SMB, so it’s best to be prepared to answer common questions. Yes, there could be curveballs you’re not expecting along the way, but here are a few that you should be prepared to answer:

• What does implementation look like, and what resources will we need to commit internally?
• How does the solution help us stay compliant with employment laws and regulations?
• Can the system scale with future growth?
• What reporting analytics are available?
• What AI tech is included?

Checking Those References

After you’ve talked with the business about your tech and capabilities and the prospect is interested in potentially moving forward, a call with a strong reference can help seal the deal. References are extremely important as long as they are used for more than to just check a box.

They should be designed as discovery exercises rather a simple validation, Torrence says. Instead of asking whether a customer likes a vendor, buyers should explore whether the solution achieved specific business outcomes.

As an HRO, you need to choose references that are willing to give prospects the time they need to discuss everything they want to address. For your prospects looking to speak with references, encourage them to prepare thoughtful questions aligned to business objectives. And give them the space they need to discuss with the reference.

You can help them focus by recommending they concentrate on areas such as:

• Implementation realities
• Resource requirements
• Change management challenges
• Achievement of desired outcomes
• Long-term satisfaction

Reference checks become far more valuable when they stress-test assumptions rather than confirm them.

Closing the Deal

Technology alone rarely determines success.

The organizations that achieve lasting workforce transformation are the ones that clearly define the business problem, align key stakeholders, prioritize requirements, and prepare for implementation before a contract is signed.

For HROs, helping clients navigate that buyer journey is critical.

With that, it might be time to rethink RFPs as Requests for Prosperity instead of simply Requests for Proposals as you help prospects focus their efforts on creating a weighted RFP designed to evaluate your HRO and the role you will serve as a long-term tech partner.

If you have further questions about how to help buyers navigate the RFP process, schedule time with an experienced sales engineer.