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November 30, 2018

The HCM System Buying Guide for Contractor Companies

The HCM System Buying Guide for Contractor Companies

By Kit Dickinson on November 30, 2018

IDI Contractor HCM System

Need to purchase a new human capital management solution for your construction business? An HCM system is a major investment, and it has implications that contractors need to be aware of. The right purchase will boost your business and help you stay in compliance with changing labor laws. But the wrong HCM system could create more headaches for your company.

A successful HCM purchase depends on considering all the factors and asking vendors the right questions early on. To make the buying process easier, we’ve compiled a list of the top considerations every construction company should be aware of. Bookmark this page, or print it out and keep it close by.

Know Your Gaps

Construction companies have unique payroll scenarios, and not every HCM solution is built to handle those issues. Before you look for a replacement system, be sure you understand what isn't working with your current solution. 

Start at the system level and identify how your current software is holding you back. What isn’t working, where are the process breakdowns and what are the gaps in your current system? For example, have you cobbled together workaround solutions for fringe benefits or prevailing wages? How does it handle complex union pay rules? What kinds of manual calculations or data entry are you forced to do? 

Also consider what's working well that you don't want to lose with a new system. If you’re happy with your HR system, but payroll or time-and-attendance is lacking, focus on those two systems rather than an all-in-one solution.

Also think about the gaps within each module:

  • What specific features and capabilities are missing?
  • What tasks are too clunky? What steps are slowing you down?
  • What do you have to do manually that you’d like to automate?
  • Is there anything that isn’t reliable?
  • Is there anything that doesn’t play well with the rest of your system?
  • Does the payroll integrate with your ERP (Job Costing) system?

Consult Your Stakeholders

Your payroll personnel aren't the only people who care about your HCM system. Human Resources, Finance, Accounting, IT and others will have their own questions, priorities and requirements.

Identify all the stakeholders in your organization early on, and meet with them to get agreement on the necessary features and benefits – as well as the wish-list items. This will give you a specific list of requirements to objectively evaluate HCM companies. It will also help keep you from getting distracted by shiny-object syndrome.

Discover how Time Bank helps construction companies get more out of their HCM systems – download the Time Bank Overview.

Disclose Your Budget

Of course, you’ll decide early on what your price range is. The key is to be open with HCM companies about your budget. This doesn't come easily for some construction companies, but it's an important factor that determines whether your purchase is a successful one. The more information they have about your requirements and constraints, the better they can tailor their offering to fit your needs – and that includes your financial needs.

Insist on Industry Expertise

Construction companies have specific payroll needs. If your HCM vendor doesn't understand the challenges of the industry, you could end up with a new system that's just as frustrating as your current one. Vet your vendors early and thoroughly. Companies that understand the contractor world will be able to speak to your unique challenges and address all of your questions with reliable expertise.

Consider Tech Needs

Consider whether you need a cloud-based system, or on-premise data storage. Most companies are moving to the cloud, because it keeps your data safer. However, you might have control or cost concerns that warrant hosting the solution on your premises.

Also consider your other systems and find out how well the vendor’s software will integrate with third-party applications.

Look for Flexibility

Get an understanding of how flexible and scalable their solution is. Make sure the HCM system can scale with your business – and that it can be modified to meet unforeseen hurdles during implementation. If they can't meet your unique needs (e.g., prevailing wage decisions, union wage scales), see what partners they have that complement their solutions to automate your critical business needs.

Know What Happens After the Purchase

Your relationship with an HCM company doesn't end with the installation, so your purchasing decision should also consider what happens after the purchase. Make sure you know what their service and support models are, and what kind of long-term support you'll need.

  • Do you want on-site or virtual implementation?
  • What are the vendor’s support hours?
  • How quickly will they respond to support requests?
  • Will you have dedicated resources assigned to your account for the life of the relationship?

Don’t Drop HCM Vendors Too Quickly

You may have had a negative experience with an HCM vendor in the past, or heard things from other contractors. Don't let that automatically eliminate a company from your vendor list. Technologies and service models change, and many HCM companies are becoming better equipped to handle the unique needs of the construction company. Your experience from a decade ago may not reflect the vendor today. Give an equal shot to anyone who fits your profile.

Purchasing an HCM system for your construction company doesn’t have to be a shot in the dark. Keep these considerations in mind from early on in the process, and you’ll make a buying decision you can be confident about.

Find out how Time Bank helps HCM companies solve construction payroll problems.