7 Things HR Professionals Need to Know About Choosing the Best Vendors

By Stewart Gott

It probably doesn’t keep us up every night, but our company vendors are extremely important. They make certain our processes run smoothly, our shelves stay stocked, and we have access to necessities like the internet, copiers, and phone systems.

HR vendor partners are especially important. After all, what’s more critical to organizational success than their human capital?

HR is typically in charge of vendors that include recruiting companies, job boards, Applicant Tracking Software (ATS) systems, background check companies, payroll services, and employee training vendors. This list isn’t exhaustive, but it shows that HR shoulders significant responsibility in choosing vendors that are reputable, dependable, and perform well. Toss in the hundred other projects HR handles and it’s easy to see why thoughtful consideration of every vendor can seem overwhelming. However, if HR makes the wrong vendor decisions, there may be costly and long-term consequences to the company.

HR needs a plan to vet vendors efficiently and effectively. Here are 7 things HR professionals need to know about choosing the best vendors.

#1: First, don’t decide on price alone.

It’s tempting to just go with the vendor that offers the cheapest price, but this sets you up for some undesirable results. They may not offer the training and support your team needs. If you and your staff spend tons of extra time on issues and obstacles, you are not saving money with the lower price. In addition, their products and services may not be as broad as you need and might even be inferior in quality. If the vendor deals with technology, they might not keep up with upgrades and advances that are essential to your department’s success.

Yes, we all have budgets. Price, however, should be only ONE factor when deciding on a vendor.

#2: Do your research.

Going in blindly and choosing the first vendor you speak with sets you up to make the wrong decision. Set aside some time and figure out who the main players are and check out their websites. Look at their size and the products they offer. Do they integrate with systems and processes you already use? Do they offer training? Is there evidence they currently work with companies like yours?

By understanding your vendor options, you will have a better chance of reaching the best decision for your organization.

When you narrow down a list of “finalists” you need to speak with a vendor representative and…

#3: Ask the right questions.

Dig for in-depth information that aids in making the wisest choice. Find out if the vendor offers scalability. For example, if your company opens new branches, will they be able to train and support them? Also, have them explain how their service team supports their clients. Request they tell you about other companies like yours, how long they’ve worked with them, and how they meet their needs. Make sure you understand their total pricing package and any extras that aren’t automatically included. Finally, and maybe most importantly, find out how their team is trained, their qualifications, and how they audit their finished product.

#4: Measure their knowledge.

Don’t set yourself up for unanswered emails and vague explanations. If the representative fails to be communicative, helpful, and forthcoming during the decision process, how can you expect any better treatment after you become their client? Pay close attention to how they answer your questions, and the amount of time it takes them to get back to you with any follow up information.

#5: Review their compliance standards.

HR must maintain a close watch on vendor compliance. After all, a company’s information is only as secure as its vendors’. Ask for written documentation of how they handle compliance standards. How are their staff trained to handle data? Where is their client information stored? Shoddy compliance practices should point you away from that vendor.

Once you determine your top choices…

#6: Engage with their references.

We all know a polished salesperson can talk a good game. That shouldn’t be all you hear about the company. Ask to speak to two or more of their clients, preferably in a related industry and of a comparable size, and conduct a conversation about their satisfaction. Ask how the vendor solves problems, get them to walk you through their communication strategy, and find out how long they have been clients of the vendor. Pose the question of what they could do better.

#7: Finally, compare and decide.

Now that you’re armed with considerable intel about more than one vendor, review the results and compare them to what you expect from your vendor partners. Base your decision on the sum total of the data you’ve gathered, and make your final decision.

It may take a bit more time to vet HR vendors this way, but it’s well worth the extra attention to set up a vendor that will be a strong and productive partner. Making the best vendor decisions is key to keeping HR functioning efficiently and serving the company to the best of its ability.