Your complete HRMS RFP guide and template

An RFP is a clear statement of requirements that lays out what you want from a new HRMS, why you want it, and how vendor proposals will be evaluated as part of a selection process.

As such, your HRMS RFP will form part of the legal bidding and contracting process. In putting your RFP together, you’re laying the foundation of the future contract between you and a future supplier – which is one very good reason to make it a precise expression of your requirements!

The following sections will give you everything you need to get started on your RFP:

 

1. HRMS RFP, RFI or RFQ – understand which acronym to use

As with any area of HR, there’s no end of abbreviations, often used interchangeably. For the sake of clarity, let’s agree the following:

  • RFP – Request for Proposal: the RFP is your detailed HRMS requirements document. It’s what you send to your ‘vendors of interest’ and it tells them the functionalities and features you’re looking for and why. This document ensures all the potential suppliers have the same information and are pitching their wares to you on a level playing field. However, depending on the size of your organization and the complexity of your HRMS requirements, you may choose to split this formal approach to vendors into two separate stages and documents:
  • RFI – Request for Information: this is used for formal information gathering when researching the systems on the market and drawing up a list of suppliers and systems that might be a good fit (in other words, the vendors you’ll be inviting to pitch). Often you’re looking for more information than is available on the vendor’s website. Yes, you could just give them a call and fill in the gaps with a conversation, but an RFI puts things on a more formal (and traceable) footing. In this document, you’re not trying to cover every single detail, just narrow the field by inquiring into issues such as headline features, company values, high-level applications and so on.
  • RFQ – Request for Quote: having used the RFI to fill in the gaps in your information, the RFQ is the document you send to shortlisted vendors asking for a detailed proposal, addressing issues such as technical specifications, deployment, costs, payment terms, maintenance, and service level agreements.

For the remainder of this page, we’ll focus on the combined RFP, or request for proposal…

 

2. Gather your HRMS requirements

You have to know exactly what you want from your new HRMS before you can provide a prioritized list of requirements in an RFP.

You may already have conducted a comprehensive review of your HR processes and systems as part of putting together HRMS project proposal. If you didn’t, do it now. That review will form the basis of your HRMS RFP.

What HRMS functionality do you have already?

Look at your current level of HR automation. Which processes already automated or online? What are the shortcomings or obvious gaps? Research the market and ask, what else is possible?

What new HRMS features do people want?

Tempting as it may be to think so, the HR team does not know what all the various stakeholders might want from an HRMS. Furthermore, not all employees will be HRMS users. From practical, everyday self-service functions for the whole workforce, to the predictive analytics required by strategic c-suite decision-makers, the range of possible requirements is vast.

Map out your stakeholder groups, then talk to each one about what HR automation would be of most benefit to them. Focus groups, surveys, one-to-one interviews… ask widely and gather as much input as possible – anything missed at this stage is unlikely to be easily picked up later.

For more detail on the requirements gathering process and HRMS selection in general, check out our HRMS selection survival guide

 

Our 2016 HRMS Project Report looked at 200+ projects and found that smaller workforces tend to have a higher percentage of active HRMS users. In other words, the smaller your organization, the wider you may have to consults, whereas a larger, enterprise level company might focus more on targeting key individuals.

Be specific when compiling your HRMS requirements document

When gathering requirements, dig into the details. Not only does that ensure you understand what your stakeholders need and why, but the information will also be valuable later in the HRMS selection process (when devising demo scripts, for example).

The last step in gathering your requirements together is to think about what other information might be useful to vendors. After all, the more information they have, the better equipped they are to offer you a package that is perfect for you (and the easier it is for you to dismiss any less-than-perfect packages!)

  • Consider the drawbacks of your current HRMS or ways of working – for example, if you experience any technical problems, find it difficult to integrate with other systems, or receive regular user complaints, use this data to prioritize your needs.
  • Ask yourself what background information would it be helpful to provide in the RFP? What is the wider context of your business: your vision and purpose, key strategic goals, core markets and clients, your workforce size, upcoming expansion projects, and key compliance areas in your industry.

A note of caution: just because everything can be automated and accessed via an online HR portal does not mean it should be. Having gathered all possible requirements, consider what is essential and what is merely desirable. Enthusiasm for the project is great but at this point, you may have to pull back a little and sort the ‘must-haves’ from the ‘nice-to-have’s.

Finally (in this section, at least) here are three classic pitfalls to avoid when gathering your requirements:

1. Incomplete requirements

Ask all your stakeholders about what benefits they could or would like to get from a new HRMS. Think about anybody with an interest in or an influence on your project (Hint: that includes all employees). Naturally, you cannot talk to every person individually, and some stakeholder groups will be represented by one or two people; think about: ‘shop floor’ employees, first line managers and supervisors, mid- and senior level managers, the c-suite, HR management, specialist teams (including payroll, finance, procurement/resourcing, and IT. It is better to ‘over ask’ for input rather than miss a crucial requirement that can derail your implementation later.

2. Allowing vendors in too early

Yes, part of your HRMS requirements gathering involves researching what’s out there in the market, which inevitably means some pre-RFP contact with vendors. However, even the best-intentioned supplier will inevitably talk up their system’s specialties whereas your starting point needs to be more internal, asking for and discussing stakeholder input and using a vendor’s materials as a supplement to your own organization’s already-established needs.

3. Failure to prioritize

As we’ve already mentioned, some requirements will be more important to your business than others.

Also, beware of ‘false importance’ – weight stakeholder input impartially against your strategic business priorities and plans. Just because everybody wants a feature does not mean it’s business-critical; likewise, a stakeholder’s seniority should not necessarily give their HRMS wish list of features more weight. Use some simple HRMS evaluation criteria or ranking system, such as ‘must-have/nice-to-have’ or ‘critical/high/medium/low’ to classify and order your requirements list.

 

3. Compile your HRMS RFP using this template

While you can – and should – use your own internal documents, the following is a useful basic HRMS RFP template to start from. Customize it to suit your organization's needs for maximum effect. 

For more detail on creating a killer RFP try our free RFP Guide – “the ultimate guide to developing RFP documents for your HRMS project”

 

Section What to include
Introduction Briefly state why you’re looking to make this purchase at this time, how an HRMS must support your strategic business goals (this information should be part of the initial HRMS project proposal), and the scope and timing of the HRMS project
Business context

A vendor can offer you a more relevant package or pitch if they understand your business. Without drowning them in unnecessary detail, provide information on your organisation’s:

  • Vision and purpose
  • Core markets
  • Key clients
  • Staff numbers
  • Office and customer locations
  • Relevant expansion projects
  • HR compliance issues
  • Sector trends
  • Previous or legacy experience with HRMS systems
  • Key stakeholder groups for this project
Process requirements

Each requirement in this section should indicate the priority, timing, justification/reason, any integration or configurability requirements and any additional expectations. At a minimum, consider what functionality people need under each of the following HR automation headings and issues:

  • Records management
  • Workforce directory
  • Time and attendance
  • Learning management
  • Recruitment
  • Workload management & scheduling
  • Onboarding
  • Analytics
  • Talent management
  • Payroll
  • Employee self-service
  • Manager self-service
  • Social collaboration

Technical 
requirements

These are the features that are not directly related to a particular HR process, more the detail of how to access those processes. There are two fundamental issues to address: Deployment – cloud or on-premises? Mobile access? (including consideration of downloadable apps, and how the system will impact your BYOD policy).

Vendor instructions

Having laid out your wants and wishes, you need to be crystal-clear about you want vendors to respond to your HRMS RFP. Not least because the more specific you are, the more uniform in format, layout and detail the responses will be. Therefore making them easier to compare and evaluate. Include the following headings in this section:

  • Timing and schedule: clear deadlines for clarification questions and responses that vendors must follow in order to have their product considered.
  • Personnel: full details of the people that the vendor would deploy as part of your HRMS project. You need to know details of their experience, skills, specialist expertise and availability.
  • Cost: a full breakdown of the full cost, including license fees, monthly payments, support and service options, any customisation/integration costs, maintenance and any consultancy fees.
  • Viability: some proof of the vendor’s financial stability (in other words, will they be around for as long as you intend to use their system).
  • References: contact details for existing satisfied customers whose requirements are comparable with your own.

Our customizable HRMS RFP template


HRMS RFP response format

Having provided all this information in as clear a manner as possible, you need to give strict guidance on the format of vendors’ responses.

First, this helps them provide you with the information you need.

Second, consistent format helps you compare and contrast the responses from multiple vendors, making it easier to compare very different systems.

 

4. Create and follow a set of HRMS evaluation criteria

You know your requirements, you have provided that information to vendors in a clear format, and you’ve told them the required format for responses. You should also be clear about the relative importance of each of your requirements and how you have prioritized them (simply put, it’s only fair to be up front about which features and factors are most important to you).

When it comes to assessing each response, you can then grade vendor’s offerings against individual requirements, using a simple rating scale such as the following:

0 = does not meet requirements

1 = partially meets requirements

2 = fully meets requirements

3 = exceeds requirements

This is not about being ‘mechanical’ in your assessment process but by using some form of HRMS evaluation template like this, you can more quickly identify the front runners and then apply more subjective discussion to those offerings, if necessary.

A final thought…

Of course, if you prefer, you can go an alternate route to the classic RFP. The abovementioned RFI and RFQ combo is one option. Another is to go straight in at the deep end with a series of software demos. Or you could ask vendors for a written narrative focused on how they will meet your HRMS needs (less technical but it becomes clear which suppliers understand your business, and which do not).

While it may seem a significant amount of work, putting together a well-researched, comprehensive RFP, detailing all your HRMS requirements, will save you time later in the selection and implementation process. Clear detail at this stage prevents misunderstandings later on and – worst case scenario – purchasing the wrong system for your business.

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Dave Foxall

About the author…

Dave has worked as HR Manager for the Ministry of Justice for a number of years, he now writes on a broad range of topics including jazz music, and, of course, the HRMS software market.

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Dave Foxall