If your business needs a human capital management (HCM) solution and you’re basing the decision solely on price, you may end up with a system that doesn’t meet expectations. A more effective approach is to carefully consider not just your budget, but also your requirements and the functionality included in the product.
Running payroll efficiently, for instance, sometimes takes more than just accurate calculations. You may need direct deposit, garnishment processing, mobile self-service, general ledger integrations and pay cards. Many inexpensive HCM systems don’t include these features in their base cost and adding them will typically incur additional fees. For this reason, you may want to invest in an HCM bundle if you need more than just basic payroll.
HCM bundles can include time tracking, benefits administration, talent management and other services. This option is sometimes more cost-effective than purchasing features piece meal, but the total price will depend on the quality of the individual components and how many employees you have. In one payment model, known as per employee per processing (PEPP), your annual fee is a product of the number of payment transactions per payroll times the number of payrolls in a given year.
Another common HCM pricing model is per employee per month (PEPM). As the name implies, you’re charged by the number of employees monthly. In some cases, you may pay for certain services on a PEPP basis and others on a PEPM basis.
For more information on how to find an HCM solution that best fits both your budget and your goals, download our guide, Finding the Right Human Capital Management Solution at the Right Cost. In addition to pricing models and the advantages of HCM bundles, we cover implementation fees and other costs you may not have considered.