8 Lessons From HR Technology Investment Regrets
Many organizations invest heavily in HR technology only to face buyer's remorse when systems fail to deliver expected results. This article examines eight critical lessons learned from companies that struggled with their HR tech purchases, drawing on insights from industry experts and practitioners who have experienced these challenges firsthand. Understanding these common pitfalls can help HR leaders make smarter investment decisions and avoid costly mistakes.
Prepare Managers Before Performance Tools
One of the investment decisions I would have made differently in the field of HR technology is the investment in an effective technology for managing performance before our managers were ready to effectively use it. I have learned technology is not the solution.
Prioritize Human Review Over Resume Filters
We treated recruitment as a data processing problem, assuming that maximizing funnel throughput would statistically yield better teams. That was a fundamental architectural error. My significant regret lies in a heavy early investment in automated resume parsing and AI-driven keyword filters. We optimized for velocity, but in doing so, we introduced a fatal systemic bias: conformity.
Algorithms optimize for the mean; they seek patterns that match historical data. However, in engineering, value is generated at the edges. The most lethal engineers often have non-linear trajectories, the self-taught scripter, the career-switching academic, or the failed founder. These outliers possess the "messy" data that algorithms are trained to reject as noise. By relying on deterministic parsing, we were effectively filtering out high-potential variance to secure "safe" hires. We were building a monoculture of people who fit the job description perfectly but lacked the chaotic creativity required to solve unprecedented system failures.
I have since recalibrated the stack to prioritize human review for these "edge case" profiles. When we stopped optimizing for the "perfect match" and started looking for the "interesting anomaly," the team's problem-solving density increased dramatically. You cannot automate the detection of grit. In high-stakes team building, efficiency at the cost of nuance is just an accelerated path to mediocrity.
Right-Size Platforms for Growth
One HR technology investment I would approach very differently now was implementing a heavy, all-in-one HRIS too early in our growth.
At the time, the promise was attractive: one system for HR, payroll workflows, performance, and reporting. In reality, the platform was built for larger, more static organizations. It required significant customization, slowed down simple processes, and forced our team to adapt to the tool instead of the tool supporting how we actually operated.
The biggest cost wasn't the license fee; it was the hidden operational drag. Workarounds became normal, adoption stayed shallow, and the ops team spent too much time managing the system instead of solving real employee or customer problems.
The lesson was clear: stage matters more than feature depth. Early on, flexibility, clarity, and ease of use matter far more than completeness. Today, I evaluate HR tech based on how quickly it can be adopted, how well it fits current workflows, and how easily it can be swapped out later.
If I were doing it again, I would choose simpler, modular tools and accept a bit of manual work in exchange for speed and adaptability. Complexity can always be added later; removing it is much harder.
Run Cross-Functional Pilots With Clear Metrics
Small pilots lower risk and reveal real world gaps. A mixed group from HR, IT, and finance can show how the tool works across teams. Set simple goals like faster hiring or fewer errors and track them.
Watch support speed, data quality, and admin work during the trial. Use what you learn to improve the setup or stop the buy. Run a time boxed pilot with clear success rules before you scale.
Model Total Costs Across Five Years
Sticker price can look small while long term costs pile up. The real cost includes setup, data moves, training, add-ons, support, and time lost during changes. Some tools also drive hidden costs in security checks and compliance.
Discounted pricing can jump after year one when usage grows. A clear view of upgrades and integration work often changes the math. Build a complete five year cost model before you pick a vendor.
Insist on Open Interfaces
Open standards make change easier and keep data free to move. Tools with well known APIs and common data formats plug into other systems faster. Standard login methods also cut risk and reduce user pain.
When parts follow open rules, features from new vendors can join without big rebuilds. Ask for proof through a demo that connects to your stack with no custom code. Demand open, well documented interfaces before you commit.
Favor Configuration Instead of Custom Code
Heavy custom code can turn small fixes into long delays. Each change can break at the next upgrade and force costly tests. Using built in settings is simpler and keeps the path to new versions smooth.
Often the better move is to adjust the process to match the tool, not bend the tool to match the past. If a gap is critical, handle it outside the core app so upgrades still land cleanly. Choose software that meets most needs out of the box and cap custom work with firm rules.
Secure Strong Portability and Exit Terms
A clear exit plan avoids pain when needs change or a vendor fails. Good terms define data formats, audit trails, files, and how fast exports will be ready. They also set fair fees, support duties, and service levels during the move.
Rights to keep integrations and documentation matter once the contract ends. Annual tests of data export prove the plan works before trouble hits. Write strong exit and portability terms into the deal before any signatures.