TA Execs Should ‘Rent’ SaaS, Not Buy

By Mark Knowlton

TA executives often need more solutions than their budgets can cover.

They must balance the need for using technology to meet business demand with picking the right blend of tools that don’t break their budget. If it were ONLY that simple.

There are almost too many choices among HR Tech tools, but picking the right solution is far from a binary choice. Choosing the ideal SaaS tool that executes critical tasks may be only solving a temporary or intermittent problem, but you are asked to pay for it for the entire year in almost every case.

SaaS is a great rent vs. buy business case, but the way it is being sold undermines its own argument. Go to the pricing page of any leading SaaS tool and they show a monthly rate, but that is only when it gets jammed into your budget at an annualized lump sum.

Why pay for an annual subscription for a SaaS tool that is not being used to perform or automate daily or even weekly business tasks and functions? This premise is validated by the existence of things like Uber and Airbnb: Don’t ‘own’ a car or vacation property, but pay for them as you make use of them. Why should SaaS be any different?

TA executives should consider their business needs and then overlay the potential solutions against a quarterly or annual timeline. Companies frequently will outsource a complex development project to a consulting firm because it is a more prudent use of budget: Hire an expert team to build a BI solution if you don’t have the internal resources and you just need a working instance to harvest the data it produces. Hiring a bunch of new FTEs to build a solution makes no sense if you just need an instance of a point solution.

SaaS is becoming a much more mature space and vendors know they can’t solve every problem for every client. Why not target tools or service offerings which come with functionality that leverage multiple third-party products that individually solve very specific types of problems? In the old days, a TA leader had to buy subscriptions to resume databases like Monster and Dice even if their hiring needs spiked and ebbed over the course of the year.

Sourcing tools are white-hot tools these days, but hiring spikes and dips have the same business-driven cycles as when Monster was in every TA department two decades ago. A company’s need to hire on a large scale will follow its revenue growth, so owning annual licenses for tools that support cyclical business needs makes no sense.

Ask an avid Uber user if they have one sitting in front of their house every day in case they suddenly need a ride. Why should leveraging the capabilities of very specific SaaS tools be any different? TA executives should consider the acquisition of application output exclusively in an on-demand basis.

It would be easy to get dizzy or go blind in surfing through the hundreds of different tools you have at your fingertips to solve a wide array of problems. You are always one click away from agreeing to some vendor’s EULA, which comes with an invoice covering the next 365 days.

Products or hybrid service offerings that let you tap into solving temporary, on-demand problems are going to be one of the emerging SaaS trends as we roll into a new decade. It was actually one of the Top 1o trends highlighted in this recent blog article from German Data Analytics firm Datapine.

You are not likely to have an Uber sitting outside your house tomorrow as you consider when you may need a ride. Don’t buy annual seats for tools that get heavy use 2–4 times a year, unless getting poor ROI on your tools stack is part of your MBO.

Mark Knowlton is the CEO and Founder of TechScreen, a SaaS tool that helps recruiters more effectively engage with managers and candidates in the hiring process.