HRIS Software Industry – How Will We Be Impacted by a Recession?
- Author Clay Scroggin
- Published November 8, 2011
- Word count 727
I have put a great deal of thought into how the HRIS Software Industry will be impacted by a recession. It’s the kind of question that keeps owners of start up companies up at nights.
Anyone who has worked in the HRIS software industry for any amount of time knows they will sell fewer HRIS systems in a weak economy than a strong one. I sold my HRIS Software value added reseller business a month ago. But, over the last year, we lost several deals directly tied to the housing crisis here in Florida and across the United States. I am sure all of our HRIS software vendors, or the sales reps for them, could offer similar examples.
Different HRIS software companies face different risks while the HRIS industry, on the whole, may be extremely vulnerable to a recession although there are HRIS companies within the industry that may be more or less vulnerable to a recession based on their unique product and purchase options.
Businesses, especially those in the less than 500 employee market, may perceive HRIS or HRMS applications as a luxury as opposed to a necessity. So it stands to reason, that fewer HR stand alone applications will be sold during a recession. Payroll and time collection will be viewed as necessities that can be easily cost justified during a slowing economy. It does not matter how slow the economy is, employees still have to be paid. Therefore, I would think, HRIS software systems offering payroll or time collection are going to be more recession proof than those solutions only offering stand alone HR Software Solution. This may include not only employee database applications but also stand alone recruiting, training management and performance management software companies.
It’s understandable why many in the HRIS software industry have gone to software as a service or hosted sales model. And I would think these companies would be more immune to the current trends within the economy than the license purchase solutions.
With HRIS software purchase solutions, the majority of the profit is earned at the time of the initial sale through the software and consulting costs. Recurring revenue is limited to support renewals which are a small fraction of the original cost. These HRIS software companies may see sales of add-on products but still the bulk of their income is made on the initial sale. These companies have to continue to sell new systems to show any type of growth and, in some cases, to survive. As we have already established above, fewer companies purchase HRIS software systems in a failing economy. As I pointed out, if these companies offer payroll or time collection, they may offset at least a portion of the sales lost for stand alone HRIS.
HRIS software hosted solutions spread the cost to the prospect over the lifetime of the contract. Thus, their revenue is more heavily acquired from current customers through recurring revenue than being required to make new sales to survive. As long as the majority of clients continue to pay for the service or hosting, these HRIS software companies should not see as much of a reduction in income as those companies being required to make new sales.
There are two ways of driving traffic to a site: you pay for it or you get it for free. Paying for it adds tremendously to overhead and to fees that must be charged to participating vendors. While we currently pay for a portion of our traffic, we see the majority of our visits arriving from our search engine optimization efforts which, of course, is free. Numerous studies have indicated that business professionals are far more likely to click on those websites under the free organic listing than the paid sponsored ads.
If companies invest most of their efforts into free traffic I think that they will ride out this recession. We have done this by syndicating hundreds of HRIS software articles like this one and constantly working on valuable back links to our site. Generating free traffic is time consuming and often tedious. But, in the long run, the result is greater traffic from a wider range of keywords with less overhead; all important benefits during a slowing economy. This is important to survive the recession.
Upon reflection, I feel far more comfortable about our recession risk with the business.
About the Author
Clay C. Scroggin has over fifteen years of experience in the human resources software industry. Clay founded CompareHRIS.com, a web site dedicated to assisting HR professionals with their search, selection, implementation and use of HR software. If you are looking for HRIS or HRMS software, make sure to try our free HRIS Software Selection Tool.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- The Transformative Power of Yamaigel’s Certified Gel Eye Masks
- Checking account with cell phone protection!
- Keeping Cool This Summer: Air Conditioning Installation Services in Milwaukee
- A DIY Guide to Fixing Your Garage Door (with a Call to Garage Door Magnolia When All Else Fails!)
- Can a Bent Garage Door Be Bent Back into Shape? Don't Panic, Call Kiki Garage Door!
- How Can I Tell If My Garage Door Opener Sensor Is Bad?
- Maximizing Profitability: The Economics Behind Customizable Design Assets
- Exploring the Hidden Gems of Si Racha, Thailand
- DIY vs. Professional Movers: Pros and Cons in 2024
- MK Web Celebrates Top Position in Bourne's Premier Web Design Rankings
- The Road to Sobriety: Understanding Substance Use Disorders
- MotorKote Ultimate 40/60 Synthetic Hyper Mix 5W-30
- Exploring Denver on a Dime: A Frugal Travel Guide
- Top 10 Ways Production Scheduling in Business Central Transforms Manufacturing
- Strength Training and it's Incredible Benefits for Fat Burning
- Enhancing Home Security with Aluminum Shutters: A Focus on Weatherwell Elite
- 5 Easy Ways to Make Oral Hygiene Fun for the Whole Family
- Transforming Plastic Extrusion Machines into Recycling Powerhouses
- Unraveling the Potential of Plastic Extrusion Machines
- The Rise of Plastic Recycling Machines: A Step Towards Sustainability
- Strawberry Cheesecake Ice Cream: OMG! Unreal!
- The Advantages of Using Professional Home Cleaners in Ilford
- 8 Compelling Reasons to Hire Professional Home Cleaners
- The 12 Steps Narcotics Anonymous Program To Recovery
- Send Money to Tanzania: Effortless Transfers with SafariRemit
- Stylish Savings: 10 Frugal Ways to Stay Fashionable in 2024
- Fly Cheap With FlightPapa To Any City
- How Collaborating with a Software Development Company Can Propel Your Business Forward
- A Comprehensive Guide to Choosing the Best Hair Transplant Method
- 15 Frugal Tips for a Memorable Wedding Day