As organizations scale, the need for HR software continues to become more vital to a company’s growth and success. It can automate repetitive tasks to streamline processes, saving the company a lot of time and money in the long run. When leaders consider their HR tech stack as a whole, the big question is: should I choose an all-in-one or best-of-breed software stack?
Pros and Cons of an All-In-One HR Tech Stack
All-in-one software is an all-encompassing platform that serves multiple purposes. It could include an ATS (applicant tracking system), payroll functionalities, HRIS (human resources information system), and more.
The benefits of having an all-in-one solution means everything will be easily accessible as it’s all in the same place. If it’ll be used by the broader employee body, training on its use will be straightforward and it’ll generally be more familiar to users from a UX standpoint as well.
The drawbacks of using this sort of software include the fact that it’s unlikely all its components will have advanced functionality. Often all-in-one HR tech stacks will still have major limitations compared to software that focuses on one or few areas. This is because the vendor isn’t focused on developing software to solve a particular challenge. Their focus is broad. So, cutting-edge developments are likely to be slower.
Another con committing to one vendor is it’ll be more challenging to change vendors at a later stage. You’re more entrenched with this supplier, which could give you less flexibility and control in future if your business’ needs change. And if this happens, it can be difficult and costly to move to another or multiple vendors.
It might seem cost effective to go with an all-in-one solution at the onset as you’re negotiating one contract with one vendor. But it could actually cost more in resources. If the features you need don’t function as well as a best-of-breed solution, there’s a good chance you’ll spend more time manually doing certain tasks, leading to a decrease in employee productivity and satisfaction overall.
Pros and Cons of a Best-of-Breed HR Software
Best-of-breed software focuses on one specific niche that usually serves a main function. A company with a best-of-breed approach will have a complete HR tech stack incorporating different software products. For example, the software you use for an ATS might be separate to that you use for your HRIS.
Employing this type of HR tech stack means you’ll use software that’s designed specifically to solve the issue you’ve purchased it for. It’s likely there’ll be more frequent and stronger product developments, because the software vendor has a singular focus. A best-of-breed software vendor is usually open to hearing out the specific needs of their clients. So, they can customise features or design new ones in response.
While there are many benefits to having a best-of-breed HR tech stack, there are also potential downsides. Ensure the software you’re considering can easily integrate with other products. If it can’t, then it’s likely to incur additional processes to transfer data between systems, as well as making the overall UX experience of your stack clunky.
Plus, using various software for different purposes means you’ll need to spend more time and resources training staff to use each one. This could decrease the overall uptake of each product. If it isn’t easy for staff to use and is seen as tedious and confusing – then they won’t use it properly or not at all.
The ultimate choice between an all-in-one vs a best-of-breed approach to your tech stack really comes down to the needs of your business. We recommend analyzing your requirements both now and in the mid to long-term. What may seem like a quick win right now could turn into a costly mountain of issues down the road – especially if your business has growth plans.
Ento is a best-of-breed workforce management software for shift-based workforces. Contact us to learn more on how we can help your business.