July 27, 2016
By Pete Lamson
SMB software spend continues to climb, and it’s predicted to continue to do so through 2019, according to IDC’s Worldwide Small and Medium-Sized Business Forecast. A large reason for this: SMBs are working to streamline internal processes for competitive advantage and to drive growth. In particular, they’re looking to gain the efficiency software brings to the time-intensive, internal grind of running a business. One area where this is particularly true is human resources and hiring.
At many companies, talent management and acquisition gets plenty of lip service. Executives wax poetic on how they put their people first, and how employees are their most important asset. Yet HR has long been the redheaded stepchild of corporate America – often the first department hit by cuts and the last to get budget back. But over the past few years, HR has finally been getting its technology stack, and it’s trickling down from enterprises to SMBs and verticals.
Your customers’ HR leaders are getting budget, and more important, a “seat at the table” as they gain more strategic responsibility and technology provides better insight for data-driven decisions. It’s sort of a chicken-and-egg scenario; it’s not 100-percent clear which came first. What is clear is that both are happening, and there’s an opportunity for resellers and channel partners to get involved early.
IT’s Budget Is Getting More Diffused
Investment and growth in HR technology adoption parallels what happened in the marketing technology sector a few years back. In 2012, Gartner predicted that by 2017, CMOs would spend more than IT/CIOs. Investments in marketing systems increased tremendously, ranging from core marketing automation systems, to social listening tools, to predictive lead-generation tools and beyond.
We’ve seen this happen in other functions, too, especially as cloud technology has led to business units having more decision-making power and budget to purchase their own point solutions.
Similar to marketing, HR software is an area of growth. And there are many workflows within HR that can be transformed through digitization, from recruiting and hiring to onboarding and training — which leads me to my next point.
HR Tech Has Advanced
According to KPMG’s 2016 Global HR Transformation Survey, 42 percent of organizations plan to replace existing on-premises HR systems with cloud-based ones. Advances in HR technology have really created new opportunities for solutions providers and their customer organizations, which can benefit from these systems, particularly in the SMB space.
One of the reasons for the aforementioned lack of budget and investment in HR technology to date is that systems have been inefficient, resource-intensive and difficult to justify. But this has changed over the past few years. New alternatives to first-generation HR systems have entered the market; cloud technology has become more commonly adopted and lowered costs; and point systems have become more user-friendly and easier to integrate.
Despite this, many small business still use spreadsheets and email. We estimate that 80 percent of companies with 50 to 500 employees have no solution for hiring at all. Clearly, SMBs have a lot of efficiency to gain in this critical and time-intensive process. It really is a greenfield opportunity for channel partners, resellers and consultants.
Finally, your customers need the competitive advantage of a streamlined recruiting and hiring process, because attracting top talent remains a challenge. SMBs – and companies in general – are not armed in the war for talent. Recruiting and hiring, rarely a competency for SMBs, needs to become one as the market improves and jobseekers regain the upper hand.
Think of it this way: A typical company loses ~10 percent of its workforce yearly. For a 100 person company, that’s ~1 person per month. For a 50-person startup, that’s still five per year and doesn’t even include growth hires. This puts an already small and busy team of managers and execs in a never-ending hiring cycle. Finding, interviewing and onboarding the right person is a resource-heavy process.
SMBs are seeking ways to spend less time on back-office processes. Whether they know it or not, HR technology should be one of the core processes they automate — for both efficiency and to create a system of record for more data-driven decision making.
Resellers, channel partners, IT service companies and consultants have an opportunity to expand their businesses by consulting on this area, which many SMBs and HR leaders are still questioning how to approach. Consider SaaS-based HR solutions, but whatever you do, get involved.
Pete Lamson is the CEO of Jazz. He has 25 years of experience in leadership roles with high growth companies, spending the majority of his career with technology solutions designed for the global small business community. Prior to joining Jazz, Pete was Senior Vice President of Global Sales at Carbonite, where he was responsible for all revenue and led the company’s expansion into the SMB market, which grew to exceed 100,000 paid small business customers. Pete was a member of the Carbonite IPO leadership team. As CEO of ATS and recruiting software provider Jazz, Pete recently launched Jazz’s Channel Program, which enables SMB HR service providers to offer Jazz’s performance recruiting tools to their valued customers.
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