With my prior HRIS/HRMS reseller business, we were frequently contacted by clients whom we did not originally sell the system to for support or consulting services. One of the first things I would check for these HR Information Systems clients is which products they were using and which products they were actively paying support on. More often than not, we were able to quickly determine where they could save money on their annual support fees.
Are you paying support for options you are not using?
Many of the HR Management Software companies I have worked with charge a support fee for each product or option. Thus, there may be a fee for a recruiting module, a training module, customization program, or an importing program in addition to the annual support fees charged on the base Employee tracking Software system. In some cases, I have seen the amount of support actually vary based on the number of active employees using the system.
If your HRIS vendor charges support by product or option, double check with them and determine exactly which product or products you are currently paying support on. If you find you are paying support for items you are no longer using, find out about the process for dropping support from those products. Make sure to also determine the process of reactivating the product if you need to use it at some point in the future. You just want to make sure you won’t have to re-purchase the system.
Should you drop support all together?
You may be asked, or already been asked, to reduce your budget. A large annual support fee on a HRIS/HRMS software product that you rarely call for support on may seem the logical choice. Well maybe, maybe not; it all depends.
If you have payroll, I would think of annual support fees as a requirement, as opposed to an option, since these support fees often include tax updates and other important compliance updates. If you are using a stand alone HR product and rarely call support, do you need to pay for it? The same argument we used for payroll does not truly exist with an HR only package. Frankly, there are not that many compliance updates required with an HR only system.
Special Note – If you look at dropping your support from an individual option or all options associated with an Human Resources Management System, make sure to find out what the process is to renew that support if you decide to do so at a later date. I worked with one company that if, for example, you came back two years later to renew your support, the vendor would charge not only the active support fee, but also all back support and a penalty for allowing support to expire. I have seen more than a number of companies become completely surprised by the penalties of allowing a support agreement to expire. Just make sure you know what the process is before deciding to cancel support.
What if you are using a hosted or subscription service?
If you are using a subscription or hosted system, your fees may be based on the number of employees. If you have had a reduction in your work force, you may want to see if the fees can be reduced since your product is now covering a smaller number of employees. You may also be charged a separate fee for each administrator user. So if you have fewer people administrating the product, see if there is room to cut the fees here as well.
I hope this saves you some money. Comment if you have any questions or need any input.
