This is Absolutely Nuts: How Companies Waste 1.3 Billion Dollars a Year on Workforce Software
This article is another in a series where we give an insider's look at what actually goes on in the field of workforce software. So you can make a better decision in regards what provider to choose. At PARiM, we are not ashamed to be biased here.
Pulling back the curtain is not always pretty but it can lead to better choices and we hope you will consider our cost-effective pricing and extensive feature-set over other offerings in the marketplace.
The hidden vicious cycle
Let us get straight to the point: the trend in workforce software is clear: as the sector's growth curve matures more and more companies that provide workforce software are faced with investor expectations of increased profitability and substantially higher margins. That needs to come out of someone' pocket and that someone is your organisation.
The cycle is common across all sectors of the software as a service (the industry shorthand is SaaS) marketplace.
Offer as much stuff for free up front as possible. Make it sound almost impossibly too good to pass.
Attract as many organisations as possible with heavily focusing on the short-term benefits. Encourage short-term thinking.
Subtly start hiding more basic features behind a paywall. Relying on the assumption that those affected by decreased access to technology you need to succeed that are not the ones who made the purchasing decision
Enter dramatic price hikes (5x-6x): Once firms start to prepare for an IPO or the insitutional investors start demanding a return on their investment in the workforce software provider You will be lucky to negotiate a delay for a quarter or two.
This is a pattern that more and more of us will be affected by as we rely on subscription software more in our private and professional lives. Unless you find a partner like PARiM - dedicated to being different, being better.
Proof that the cycle is real
Don't believe us? You can't afford to ignore what has happened in other sectors: Optimizely offers a good example. Near instant price hikes that exceed 10x the initial cost with heart-attack inducing communication for SME customers as the company prepares for an IPO by focusing on enterprise customers to show higher profit margins.
This could be your next message from your workforce software provider (source: convert.com):
Nobody wants to be on a receiving end of a call like this.
Boiling the frog
Don't be this guy: waiting to be boiled (above)
You have to get out of the vicious cycle while your company is still growing and flexible enough to change to a better provider with limited hassle. The cycle is a form of a value trap: you get good value to begin with but the expectation is to lock your company into the cycle, when your focus turns from workforce software elsewhere and to "boil the frog".
PARiM offers a better way
We are a challenger to the status quo: from day one we have focused on being cost-effective rather than being deceptively "free". Our pricing is based on how much you use our solution - the more you do the more we earn.
While we may not have all the features right now: this is a win-win relationship where we hope you stay with us long-term and we have an incentive to keep adding features that you want. It also follows that any price hike has to be connected to substantial increases to our offering.
In the next part of this series we will go through how aggressive providers seek to extract the 1.3 billion from organisations just like yours. Meanwhile we encourage you to share this story and PARiM with your friends and colleagues.