Why weighted RFPs and business problem clarity matter in HR tech buying

[00:00:00] So the unweighted RFP is a waste of time, in my opinion. So yeah, so I graduated kindergarten in 87 and got into this business, you know, back then, so that's how long I've been in the business. The movie, uh, Talladega Nights, where he's like, don't put that evil on me, Ricky Bobby. I was sitting next to this one lady who was like, we just signed up with this vendor, I think they're gonna be great for us. But then you hear the conversation at the other table and they're like, I can't wait to leave this vendor.

[00:00:29] They're just, they're terrible for us. Hey, what's going on? Welcome to another episode of Joey's HR Lounge, where HR leaders think out loud. I'm your host, Joey Price, founder of Jumpstart HR, and we've got a very special guest with us here at Prism Live, because we are a special guest here at Prism Live.

[00:00:47] So Rick Torrance, Chief Sales Officer. Now, uh, this whole conference is all about Prism and the ecosystem, but I want to start with your hot take, because I ask every guest on the show, what's your HR hot take?

[00:01:03] Yeah, thanks, Joey. And thank you very much for being here. And thanks for letting me share my thoughts. You know, my hot take would be this, is that our, our customer, the Prism customer services, the small business of America, right? That anywhere from the micro company to, you know, companies that are, you know, two, three, four, hundred, right? Oh, thank you. The flavor of our customer is called a P.E.A.

[00:01:28] And not enough small businesses know about Prism Live and the value they bring in the, you know, HR category and how much a burden they can take off the small business by working directly with Prism Live.

[00:01:44] So that would be my hot take is, is that the small business needs to become familiar. And we need to do a much better job of educating the small business on what a P.E.O. is and how the value of a P.E.O. extends to that. Great. Well, I hope we get to cover that during our time today, because one of the reasons why I wanted to do a live podcast here at Prism Make Your Live is because you all are so unique.

[00:02:12] You know, what we see is a strong play for HR buyers to benefit from a partner ecosystem. But at Prism, that's kind of the bread and butter. It's like it's it's the hub. So even with Shay and I walking around and talking to some of the folks who are vendors in the expo hall here, which has been very positive reactions, by the way, from from the expo vendors.

[00:02:43] They're here because they want to talk to the P.E.O. leaders. And so you are like the bridge to the customer or the software to help customers succeed and help the P.E.O.s grow and scale. But for those who are not familiar with your model, what is that? That's a great question. So P.E.O., first of all, the acronym is Professional Employer Organization.

[00:03:11] And it takes advantage of compliance that allows the small business employee to become the employee of record for the P.E.O.

[00:03:23] And in doing that, the small business is able to take advantage of scale and literally purchasing power at scale for things like benefits, things like retirement, things like, you know, all kinds of insurances and services that left alone, if they're trying to consume that at their level, it's very expensive.

[00:03:47] And so the P.E.O. spreads that across their entire customer base and affords them opportunities that otherwise they wouldn't have. And I started a small business many years ago and literally trying to get retirement plans for 10 employees was a huge challenge and a huge expense. The P.E.O. model changes that game completely.

[00:04:14] The other thing it does is it takes the burden of the small employer from understanding all the rules and compliance and regulation. That is risk to them. It removes the risk. And so, you know, when the P.E.O. enters their world, it's a huge benefit to them. And it lets them focus on what they're there to do, which is grow their small business.

[00:04:44] You're worried about paying my people and their benefits and their retirement. It takes away from your ability to focus on building your business. Yeah. So that's what a P.E.O. in nature does. And then, again, Prism supports that P.E.O. through our technology services. Yeah. And, you know, P.E.O.s aren't a new concept, but I think they're a part of this digital transformation that we're all in. So you've been in the business for quite some time. I let you share how long it's been.

[00:05:14] You've seen and you've worked at other companies. What's the red thread of P.E.O.s today and P.E.O.s of yesterday? Like what's stayed the same, but also what's different? Love the question. So, yeah, so I graduated kindergarten in 87 and got into this business back then. So that's how long I've been in the business. Yeah.

[00:05:38] But so first of all, the common thing is literally understanding a P.E.O. People didn't understand it 20 years ago, and they're still trying to understand it today because it is compliance. And there are the federal government and states. And there are the laws that allows for co-employment.

[00:06:07] And co-employment, simply put, is that the same employee can work for, you know, you literally can take that employee that is working for you, but I'm going to employ them and, you know, literally take care of all the HR. And it's misunderstood. It just isn't a well-understood, you know, the laws around the ground are not well-understood. It wasn't well-understood 20 years ago, and it still needs to be better understood today. So that's the commonality. Okay. Okay.

[00:06:38] Anyway, so what? Well, what's new? What's new with AI, with how small businesses are evaluating P.E.O.s and C.P.E.O.s in the market? What would you say is fresh and new? Well, there's so much. So the concept of a P.E.O. and, you know, again, P.E.O. is a segment, one of our segments. It's one of our biggest segments that we search.

[00:07:04] So that segment, for years, the P.E.O. said, I want to do everything for you because that creates the value for the smart business. And so much so that I don't even want to afford you certain technologies because I don't want you to think that the technology is the value. I want you to design with them.

[00:07:26] And in recent years, there's been a transformation in the P.E.O. mindset to leverage technology as the value. Right. And so if you think about all of us today and just even your setup, your setup is amazing. Thank you. You have, you know, you're leveraging technology, you know, and, you know, to its fullest potential. We all have our phones either on us or near us. And we do that every single day of our lives.

[00:07:56] And we have been we have become accustomed to consuming tech as the first level of quality service. I would argue that most of us today don't want to engage with a human being to solve our problem if tech can solve us before we ever engage in anybody. And so the P.E.O. used to shy away from that. They're starting to embrace that.

[00:08:22] And we see that in self-service, like self-service concepts aren't new, but distributing them to the employee level and the employee in the small business level is something that P.E.O. P.E.O. is now moving to at a much, much more rapid pace. AI even makes that even more prevalent. Yep. Right. AI is transformation. It will be. It is already transformational.

[00:08:47] It is going to speed up, you know, what we do with tech and how we leverage technology across whether you're an employee, whether you're the employer or whether you're a service provider, a technology provider. Yeah. Yeah. You can't have a workforce conversation these days without technology. And part of the workforce conversation is buying that technology. Now, we have a framework at Jumpstart HR. It's called Bridge.

[00:09:14] And that's how we help HR technology buyers understand how to evaluate solution providers. Now, the acronym starts with V, which is basically to understand the business problem. Now, you're a chief sales officer. You've probably sat in on a ton of deals. You've heard a ton of opportunities from your team. How often would you say your prospects are starting with the business problem?

[00:09:42] And if they're not, what's the coaching that you give to surface that? Excellent framework. The definition is the business problem. What is the business problem? Right. And in those words, it has to be the business's problem. If not an individual and an individual in some tactical solution to make their job better, the business has to feel the pain.

[00:10:13] And the business leaders have to understand the pain because without that, without a clear definition of that business problem that impacts the business, change won't occur. Yeah. Change isn't going to occur because I can shave 30 minutes off of what I do for a living every day. It will not occur for that. Yeah. Why? Because you're not going to fire me. You're not going to go. So the 30 minutes, if you save it, so what? Yeah. Right?

[00:10:43] So it has to be a problem. And that definition has to be clear and acknowledged by the senior most person in their organization and recognize that we need to change this. And a lot of companies, when they start the buying process, start at the very tactical level. You know, well, we want to fix this. This person's spending more time doing this. You know, we need a little bit better reporting over here. But that's not a definition of the business problem.

[00:11:11] And so I think, you know, for the business to really sit down, get a very clear understanding of what they're trying to solve for that is impactful to the organization is critical. And I, you know, and honestly, as a sales leader, that's the first question I ask my sales team to find why they're going to change. And the minute I hear something tactical, I go, move on to your next deal because that one's not going to sell. Right?

[00:11:41] And so it has to be, as you pointed out, through definition of a business's problem. Yeah. Yeah. Absolutely. And, and so you're whatever you're listening or viewing this, that business problem is not just HR's problem. You can probably speak to what our research shows is that more and more of the HR buying conversations, it's the CEO, CTO, CIO. It's everyone who's involved in making work work.

[00:12:08] And so it's not just gone are the days where CEO tasks HR to go find five vendors and pick the best one and let me sit with the final one and see if I like one. Or, you know, I went golfing with this guy and he gave me his card and he treated me to a nice steak dinner afterwards. I think we're going to go with them sight unseen.

[00:12:34] You really have to be thoughtful from the beginning of the sales journey or the buying journey because that's to your point. You're talking about going on to the next deal if the person hasn't identified what that challenge is. And what I would add to that is it's a holistic conversation that has to happen. Not just within the HR department, but across the organization. I couldn't agree more.

[00:12:59] And I think every part of organizations, whether you're in HR, whether you're finance, whether you're in some piece of the operation of your business, you have challenges you face every day. Oh, right. And when the business changes an HR system, it's because it's impacting all of those people, all of those elements of the business.

[00:13:28] It isn't because it impacts just HR. And I would argue that we probably haven't sold many deals where all it ever did was impact HR. It's got to impact the greater part of the business. That's right. We'll change. That's right. Well, a lot of buying is done through the formal RFP process. Love it or hate it. You know, that's the structured way for us to evaluate the buying process.

[00:13:58] Where do you see buyers struggling to separate must-haves from nice-to-haves? And how does a weak or unweighted set of criteria show up later as a stalled or greater purchase? Yeah. So there's some great insight to that. So the unweighted RFP is a waste of time, in my opinion. Why is that? Because this might be your hot take, by the way. It could be. No, it could be. Because of this, the business doesn't know what its priorities are. Ah, that's good.

[00:14:28] And if you can't wait, like, it's okay to have a hundred criteria in an RFP. I need to have all these boxes checked in order for a change to make sense to me. But nobody does everything perfect. And if I don't weight the importance of each one of those to some degree of weighting, then how do I ever know who fits best?

[00:14:57] What happens then is it becomes a game of who do you like best? Who treated me best? Who? And it doesn't. You could be making a decision that you think is the best decision you've ever made, and you ended up with a solution that never meets your need. Yeah. Right? Because you didn't weight your criteria, you might, you know, you might have a workforce management solution that doesn't meet the core business need,

[00:15:25] but because you didn't weigh it appropriately against other needs, you're willing, and that could trigger you. So it's got to be weighted, in my opinion. And if it's not fully weighted across all criteria, you better have really clear defined selection criteria. Yeah. Right? Which is another way to sort of get to weighted, but I like weighted better. Yeah. But your selection criteria has to be weighted in itself.

[00:15:55] Money falls in here on the selection criteria. Capability falls here on the selection criteria. You know, proof of concept falls here on the selection criteria. And if you can do that, that can also solve that problem. But there's nothing like getting an RFP with that potential customer is rating and weighting.

[00:16:20] Then you know if you become part of that true evaluation process. The way I look at it, Joey, is this. You're not really being evaluated to get past the RFP. Right? And so to get to that. They're being filtered. Yes. 100%. Passing the gate. Yes, sir. That is exactly right. So again, it's hugely important, at least from my view,

[00:16:47] that if you're a buyer, you weight your criteria and you've got clearly defined decision criteria on what solution is going to meet your needs. Yeah. I couldn't have said it better. I mean, you know, I sometimes joke every salesperson wants to make the president's club. Right? So if you're weighing it, if you're weighing a buying decision on the way you were treated, which is always important. Customer service is always important.

[00:17:14] But that can't be the primary, you know, Joe called me back first or Mary sent me, you know, a gift card or I had this, this, I sat in this demo and I got this, this reward. Those things are nice. They're, they're great. They're important. But the success of your deals are going to land on that, that way. Great criteria. A hundred percent. I'll add one thing.

[00:17:41] The success of the future with that customer is impacted by that. Yeah. Because if the customer does a great job of waiting, if the customer really understands its needs, if the customer uses that RFP and that selection criteria to pick the right solution, then they're going to be happy for a long time. Yeah. If they don't, they're going to make a decision that they're either going to have to live with,

[00:18:08] which nobody wants, or they're going to be forced with change way faster than they want, which nobody wants either. Yeah. And depending on the scope of it, you know, you go make a mistake like that when you're responsible for a 10,000 person company, you're probably not there the next day. Yeah. Right. You know, scale down that does, you know, that seriousness of it doesn't, but, but it's important to make those right decisions.

[00:18:33] Rick, what breaks my heart, I was in a, I was in a room of CHROs, HR leaders of a thousand plus employee organizations a few days ago. It was a dinner and it was a dinner sponsored by a vendor, but people were so candid about every other vendor except that one.

[00:18:56] And so what it showed me was HR knows like when they're being lied to, when they're being disappointed. And the part that really broke my heart was I was sitting next to this one lady who was like, we just signed up with this vendor. I think they're going to be great for us. But then you hear the conversation at the other table and they're like, I can't wait to leave this vendor. They're terrible for us.

[00:19:22] And I, and it's, it's, I don't know the buying process that, that, that, that firm went through, but I've got to think that if, uh, if they went through the weighted process, if they maybe, um, had more structure to it, uh, they would have been more successful. But there's also another component too, it's, um, it's the buying process, but it's also the people who are on the table. All right. Are they aligned on, um, priorities and are they aligned on what are really the strategic

[00:19:51] goals, which I think feeds into why you want to have that weighted, uh, ranking. What could you talk about the pressures of different folks in the buying committee? Yeah. So it's interesting. You bring up a very interesting point is that there is a lot of stress in, in, in a buying process, right? And the core of it is getting it right, right? The stress is I got to get it right, but you got to get it right.

[00:20:21] And it, it, it's tough to meet everybody's need in a selection criteria, particularly around something as complex or as large or as impactful as, you know, an HCM. Because an HCM platform touches every single employee. Yep. Right. And so, so you do have to align in it. You have to align on, we'll go back to your first question. You have to align on the, what's the business problem we're solving?

[00:20:49] And then where does it impact each part of the organization? And is that part of the organization aligned on the change? Who is the influencer in that part of the organization, et cetera? So I think it's critical that the organization worked hard to get that, you know, and have an agreement with all those people up front. Yeah.

[00:21:17] And that's where the stress happens is when it's not agreed upon. And I will add that I don't know that a, because a lot of organizations don't go through these buying processes frequently, they don't know how to do this. Because it's a muscle. It is a muscle. It's a muscle. Yeah. If you don't use it, it's, it's, it's, it's weak. And if you're, you know, so there's lots of ways to solve for that, right?

[00:21:42] It's, it's go, go like literally go hire the talent, you know, the external subject matter experts to help you in this process. Right. And it's not, it's not, you know, shifting responsibility. It's just knowing that they're going to help you ask all the right questions and do the alignment. Um, and it's also, you know, it's also rely on some of the parties that you're going to

[00:22:07] evaluate to help you, you know, some of the smartest buyers that have asked some very simple questions. What am I not asking you that I should be? Yeah. Right. It's, if you put thought to that question, if you're the, you know, the, the, the potential vendor, you, if you actually give thought and a thoughtful answer to that question, it's hugely helpful to the buyer, but you have to be thoughtful. You have to be honest about it.

[00:22:37] Um, you know, but it's a, it's a great question of people that you're about. Yeah. Yeah. I would agree. I'd agree. I think we hear that in the, uh, interview process sometimes when folks are drawing a team and they, they want to know about the culture of an organization and they're like, what should I have asked? I didn't ask. 100%. So that practical tip, you know, works everywhere. Well, let's say, let's say that, um, a team has done the due diligence. They're aligned on priorities.

[00:23:05] They, they understand the business problem and they've, they've ranked and weighted, uh, and triage needs. Um, but they struggle with the execution. Where do you think people miss the mark? Organizations miss the mark on evaluating their, uh, ability to execute on the right tool? Cause you don't, there's a, the movie, uh, Talladega Nights where he's like, don't put that evil on me, Ricky Bobby. Right.

[00:23:34] It's a great line. Yeah. Well, if there's execution challenge, it's not always the vendor challenge. Right. So what gems of wisdom could you share to a buyer out there? So why isn't the RP process? Who's like, before we make that decision, let's make sure we've got the right drivers in place to make sure that we, uh, pay the sounds and stuff. Yes.

[00:23:58] I think somebody used some structure that's pretty well known, but is often overlooked that, you know, you have to define resource involvement and all the roles that need to be involved. You have to design, you have to define your time criteria. Right. And you know, what, what do you need done by wrong and how long should this again? Right. You have to look for blockers. A blocker could be, yeah, one of my resource criteria.

[00:24:27] As a, you know, a planned legal basis. Right. Right. And so, so too many buyers focus specifically on the selection. They don't look internally and say, Hey, once we select, are we ready to go? Yeah. Right. And, and being ready to go is a very important aspect. Now again, the, the potential solution provider vendor should be able to create some framework

[00:24:57] around that. You need to have a project manager and they are going to need to dedicate X amount of time on this project. Right. And you need to hear the truth of that. Not, you know, you got to be careful. You don't get what you want to hear. You got to get what is really. And so questions like, tell me what, tell me what the roles that we need to have are. What's the average? If you think about all your customer base and all the implementations you've done, because you've done way more than we have.

[00:25:24] What's the average time that project manager would spend on us, you know, an implementation, including the products that we're purchasing? Right. Get metrics like that. Yeah. So then you can measure those against, you know, what is, what you can ask of your team. And if there's a gap, don't do anything until you figure out how to solve for that gap. Because the gap doesn't go away. Right. And so that's just an example of what, you know, they need to focus on. Sometimes buyers feel like they're bothering the solution provider.

[00:25:54] But I look at it differently. I'm like, if you tell me what questions you have, I understand what your priorities are and how we can position our solution to honestly help you execute on that challenge that you have. So I think that practitioners need to be asking, they need to be asking more questions. They need to be asking more questions.

[00:26:22] And we see this a lot in evaluations. They spend all their time and energy on the tech or the solution itself. They don't ask nearly enough questions on how do we get this thing functional to the degree that solves our business problem? Yes. Right. And the environment that we're in. Yeah. The resources that we have. A hundred percent. Yeah.

[00:26:47] And I tell, you know, in the day when I was selling and I tell our sales reps this today too, but don't tell me we didn't have a full on services conversation with these folks where you engaged our service leaders in the pre-sale conversation. Because first of all, our service leaders, their jobs are to execute. Right. We're not going to say anything at eight o'clock that they can't deliver at five o'clock. Right. So have them involved in the process.

[00:27:16] You know, that ensures that the potential customer is hearing what they need to be involved in and participate in. And that's critical. So, you know, it does none of us. It doesn't do the potential new client and it doesn't do us any good to spend all this energy and selection.

[00:27:37] And then in an implementation and only for it to fail because the company that is selecting us didn't really understand what was part of it. We all fail. We all lose if that happens. Yeah. So it's critical piece of it. Okay. Two quick thoughts, lightning round thoughts.

[00:28:00] What is one key to success for a successful long-term relationship with the vendor? So you've narrowed it down to your three to five choices. And I'm looking for that gem of like, you've made the right call if you ask this question or you hear this from a vendor. And then the last thing, we haven't even talked about AI.

[00:28:29] So in two or three years now. And I think we might have chatted about this stress test. Yeah. You have to. There has to be a form of a stress test. They come in many shapes, many sizes, many ways. But just because you selected somebody, how do you know? How do you absolutely know that it's going to work for you? There's no sense in this absolute. You're never going to absolutely 100% know.

[00:28:57] But there are ways to go find out. And in another segment, we can talk about those ways. But I'll give you one. Okay. If you're going to ask for customer referrals, schedule an hour to an hour and a half with each one of them. Have very thoughtful, planned-up questions that are aligned with what your business objective is once you've implemented this. Does it do this? Does it do this? Will it get me here? What's your experience here?

[00:29:26] Do not go into it. Hey, tell me about them. Do you like what you're doing with them? There's way too much of that to go on. You need... If you're going to stress test with referrals and references, make sure that it's really thoughtfully planned out with really good questions. Share those questions ahead of time. And keep the solution provider out of the middle. Don't let us in the middle of it. Let that happen organically and naturally.

[00:29:55] But go into it very thoughtfully. Yeah.