hr painpoints

8/3/2019 HR Painpoints

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Trends in HR Marketing:HR Buyers Behavior 2007


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Abstract

This research report, conducted by HRmarketer.com, covers the latest trends andbest practices for marketing to human resource (HR) and employee benefitsexecutives and professionals. The data in this report is based on responses fromhuman resource and employee benefits buyers, hereafter referred to collectively as

HR buyers, collected during Q1 and Q2 of 2007. The key trends outlined in thisreport tell us the following about HR buyers and their buying process:

! HR buyers increasingly rely on the Internet as a trusted source of informationwhen making purchasing decisions;

! HR buyers dont value traditional print media as a primary source ofinformation compared to other online sources and even less so than inprevious years;

! HR buyers are participating in the growing popularity of blogs, podcasts andwebcasts as sources of information;

! Other departments (IT, Finance, etc.) continue to influence the purchasing of

HR products and services;! HR buyers place increasing importance on a vendors online visibility,

including the vendors own web site and their search-engine rankings.

This report also includes information on which search engines HR buyers most oftenuse, how likely they are to click sponsored pay per click ads, what popular keywordsHR buyers use when searching for various HR products and services, how oftencompanies go out to bid for various HR products and services, the popularity of HRtrade shows, and which functional areas represent the biggest challenge in thecoming year.

Lastly, this report includes recommendations for human resource and employee

benefit suppliers based upon what we have learned about the needs and informationusage characteristics of HR buyers.

Introduction

This report provides information on trends and best practices for marketing to thehuman resource and benefits marketplace, and more specifically on the purchasingbehavior of the typical HR buyer. It includes an analysis of trends and the progressof the HR buyer through the purchasing cycle as well as the tools they use toprogress through each stage. This analysis, combined with an understanding of howimportant online visibility has become for HR suppliers, provides readers with a

better understanding of their target market and the best marketing tools with whichto reach them.

Methodology

The research data referenced in this report is based on responses from humanresource and employee benefits professionals and executives. The data wascollected during the first and second quarter of 2007.


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Survey participants represent diverse industries including education (7%), financialservices (8%), manufacturing (13%), professional services (13%), healthcare (9%)and technology/software (11%). The titles of the survey participants included CEO /president / business owner (3%), Executive (4%), Director (38%), and Manager(18%). A variety of company sizes were also represented in the survey, from under$5 million (6%) to over $250 million (31%) in annual revenue.

What is your role?

9.3%

17.5%

38.1%

27.8%

4.1%

3.1%

0% 20% 40% 60% 80% 100%

Staff

Manager

Director

VP

Executive

CEO/President/Owner

What is your Industry?

21.6%

11.3%

0.0%

1.0%

13.4%

3.1%

13.4%

3.1%

1.0%

9.3%

0.0%

8.2%

1.0%

3.1%

7.2%

0.0%

3.1%

0% 20% 40% 60% 80% 100%

Other (please specify)

Technology and software

Staffing

Retail

Professional services

Media and entertainment

Manufacturing

Insurance

Hospitality

Healthcare

Food services

Financial services

Government

Energy and utilities

Education

Consumer Goods

Construction and Trades


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I Need an HR Solution. Where do I Start?

When HR buyers were asked how they begin their search to identify vendors for anHR product/service, 43% said they ask a peer and 39% said they went to theInternet first. For those going to the Internet first, 25% started with a searchengine. Less than 5% relied on a print trade magazine or buyer guide as a first stop

for information. And less than 2% called an HR consultant.

How do you typically begin your search to identify vendors for an HRproduct/service you may be interested in purchasing? (Choose one.)

2.5%

14.3%

5.0%

0.8%

1.7%

5.9%

26.1%

0.8%

42.9%

0% 20% 40% 60% 80% 100%

Other (please specify)

Favorite HR informational website

Industry print publication/trade magazine

Refer to an online buyer's guide or vendor

directory

Refer to a print buyer's guide or vendor

directory

Refer to a vendor's brochure or other marketing

collateral that you previously received and saved

for future reference

Internet search engine (e.g. Google)

Call a consultant

Ask a peer

Not surprisingly, Google was by far the most often usedsearch engine of HR buyers who search for HR information

online. A distant second and third were Yahoo! and MSN,

respectively. Less than 5% used Ask.com and less than 1%used AOL. This is consistent with national trends showing

Google, Yahoo! and MSN capturing over 95% of Internetsearch volume. However, in the corporate world of human

resources, MSN and AOL get very little use.

When asked how oftenthey use an Internetsearch engine to searchfor HR information,nearly 50% said dailywhile 80% said one ormore times per week.


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How often do you use an Internet search engine to search for informationrelated to human resources?

0.0%

2.5%

3.4%

12.6%

35.3%

46.2%

0% 20% 40% 60% 80% 100%

Never

A few times a year

Once or twice a quarter

Once or twice a month

Once or twice a week

Daily

Fifty-seven percent of HR buyers who use an Internet searchengine rarely click a vendors sponsored ad, while 23% are

somewhat likely to click a sponsored ad. Only 6% said theywere highly likely to click a sponsored ad. Interestingly, only13% of HR buyers said they never click sponsored ads,which is encouraging to HR suppliers who invest in pay perclick.

This is fairly consistent with national search trends, whereresearch shows that about 70% of Internet users click onorganic listings, versus 30% on paid listings. Organic searchresults are usually perceived as unbiased and thereforemore credible than paid results.

This is why marketers are well-advised to invest in SEO to

boost their natural rankings. A major component to SEO iskeyword selection the keywords and phrases that yourbuyers are likely to enter into a search engine whensearching for products and services. Keyword selection isthe single most important stage when beginning the searchoptimization process and the most important to monitor and refine over time.Knowing what keywords your buyers use when searching for products and servicesthat you sell will serve as the foundation for your SEO initiatives youll want toinclude these keywords in your META tags and your site body copy, and as keywordhyperlinks in your search-optimized press releases.

In our research, we asked HR buyers to list keywords/phrases they would likely usein an Internet search engine to find information on various human resource productcategories. Some of the responses included:

Only 23% of HR Buyersare somewhat likely toclick a sponsored ad likethese on Google.


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HR ProductCategory

Keywords and Phrases

Assessments Skill testing, candidate assessments, testing, measurement,analysis, profiles, performance management, assessment,leadership, psychometric

Compensation /Incentive Programs Pay programs, rewards, salary, wages, distribution, earnings,total compensation, compensation, executive compensation,salary surveys

Compliance HR Compliance, compliance, legal, laws, regulation, and byspecific compliance issue

Employee Benefits Benefits, benefits package, core benefits, health coverage, andby specific benefits question

HR Consulting HR consultants, human capital consulting, expert, partner,specialist, consulting, coaching, organization development,outplacement

HRIS and / or ERPSolution

HR technology solutions, HR systems, database, tracking,people, data, hris

Payroll Services Payroll, value, chain, pay, wages, salary HRISRecruiting andStaffing

Recruiting, recruitment, talent acquisition, sourcing, hiring,recruiting tools, retention, hiring, staffing

Screening Background screening, background check, background checks,DOL checks, profile, review, screening, interviewing, candidatescreening

Talent Management /Employee Relations

Employee relations, generalist, talent, growth, people,performance management, talent management, retention

HR and Web 2.0

When it comes to webinars, podcasts andblogs, HR buyers are catching on. Ninety-four percent of HR buyers participated ina webinar in 2006, 43% listened to apodcast and 52% visited a blog. Twenty-six percent of HR buyers visit a blog oneor more times per quarter, while 19%listen to a podcast more than once aquarter.

According to research by Pew Internet,about 12% of Internet users in Americasay that they have downloaded a podcast

so that they can listen to it or view it at a later time. Pew Research also points tothe fact that on Podcast Alley, a website directory of podcasts, there were fewerthan 1,000 podcasts in 2004 whereas in 2006 there were over 26,000. Blogpopularity also continues to grow rapidly. According to research by comScore, blogvisitations rose 56% from 2005 to 2006 to 58.7 million visitors, representing 34% ofthe total Internet audience.

Joel Cheesman, popularHR recruiting blogger


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The key takeaway for HR suppliers is that if you are not blogging and podcasting,consider doing so. If you dont, you could be left behind as more HR buyers seek outuseful blog and podcast content for their organizations.

Blogs and podcasts are yet further opportunities to take your message direct to yourbuyer, bypassing the traditional media where placements are more difficult andexpensive to secure.

Having a popular HR blog and doing regular podcasts increase your online visibilityand reach. This is important considering how many HR buyers use the Internet tosearch for HR and vendor information. But remember, whatever content you put outthere (webcast, white paper, blog, podcast) be sure to keep it non-promotional,educational and informative.

How Important is Exhibiting?

Fourteen percent of HR suppliers do not attend any HR conference or trade showand 72% attend three or fewer events per year. HR professionals working at

companies with less than $5 million in annual revenue per year are likely to attendonly one event per year, whereas those working at companies with revenues of$250 million or more will likely attend four ormore events per year.

HR events have always presented a conundrumfor HR suppliers. Logic dictates that if you dontexhibit at key industry events, HR buyers mayview you as less credible. If you do exhibit, youmay find it difficult to quantify any ROI. Ormaybe this year, youll score heaps of greatleads! So should you exhibit or not?

In our experience, regardless of the type of HRproduct or service you market, HR suppliersshould attend at least one or two key events peryear in order to maintain an industry presenceand credibility. We also highly recommend thatsenior marketing and/or company executives attend HR events. While salesprofessionals, not marketing, should always staff the exhibit (this is a sales function,not a marketing function), marketing executives should attend HR events in order totalk to buyers and understand their pain points, study competitors, and attendsessions to keep current with the discourse of the industry.

However, when deciding how to allocate your marketing and PR budget, realize that

a relatively small percentage of HR buyers attend any given trade show and evenfewer will come into contact with you at the event. So, if your annual marketingbudget is $100,000, think twice before spending $20,000 (exhibit space, travel,food, hotel, shipping, promotions, etc.) on an event where you may reach 50qualified buyers (cost of $400 per qualified lead). You may be better served byinvesting in a few white paper download campaigns that include some search-optimized press releases and a direct e-mail marketing campaign.

HR suppliers should attend at leastone or two key HR events each year,like the HR Technology event(above) where HRmarketer.comexhibits each year.


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We recommend that HR vendors spend no more than 10% of their marketingbudget on trade shows, because trade show marketing just doesnt usually pay foritself.

How Secure Are You?

HRIS and/or ERP solutions providers enjoy the greateststaying power, as 52% of HR buyers said they go out to bidfor these products only once every five or more years. Thisis not surprising considering their high cost,implementation time and switching costs. Payroll vendorsalso enjoy high staying power, as 50% of buyers said theygo out to bid only once every five or more years. For thesereasons, vendors of high-end HR information systems andsoftware should not be afraid to spend a higher amount on marketing and PRrelative to other vendors. Previous HRmarketer research shows leading vendorsacross all HR product categories spend an average of 20% of revenue on marketingand PR.

The majority of HR products and services were likely to be put out to bid every2-5 years.

How Often Does Your Company Go Out to Bid For the FollowingHR Products and Services?

0% 20% 40% 60% 80% 100%

Compensation / Incentive programs

Compliance

Employee benefits

HR consulting

HRIS and / or ERP solutions

Outsourcing

Payroll provider

PEO

Recruiting and staffing

Screening

Talent management / Employee relations

Training and development

Once Per Year Once Every2-5 years

Once Every5+ years

The reasons companies go out for bid vary considerably across HR productcategories. For example, the number one reason companies go out to bid for

HR buyers said theywere most likely to goout for bid (annually) foremployee benefits;training & development;and recruitment andstaffing services.


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employee benefits (e.g., EAP, work-life or healthcare benefits) is to get a lowerprice, while price is rarely a motivating factor when going out to bid for PEO ortalent management solutions. Other HR services where price is a motivating factorfor going out to bid include background screening services and recruitment &staffing services. Understanding how often and why companies put your product outto bid is critical information for marketers because it impacts how you position yourproducts.

For example, marketers of employee benefit services (especially employeeassistance programs and work/life vendors) must realize the commodity-like natureof their offerings and spend marketing dollars on differentiators like service,reporting or unique payment plans tied to participation. Trying to differentiate basedon services or quality is often ineffective.

What is the primary reason your company goes out for bid foreach of the following?

0% 20% 40% 60% 80% 100%

Compensation / Incentive programs

Compliance

Employee benefits

HR consulting

HRIS and / or ERP solutions

Outsourcing

Payroll provider

PEO

Recruiting and staffing

Screening

Talent management / Employee relations

Training and development

Decrease Operating Costs Solve Business ProblemPrice Negotiation Required

Learn About New Products Stay Ahead of CompetitionOther

About half of HR professionals said their company requires a formal RFP when

purchasing HRIS/ERP and employee benefit solutions while only 20% of HR buyerssaid a formal RFP process is required for recruitment and staffing services.


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HR Pain Points

Which functional areas represent your biggest challenge in thecoming year? (Top 5 responses)

10.0%

11.0%

13.0%

16.0%

30.0%

0% 20% 40% 60% 80% 100%

Training and Development

Talent Management/Employee Relations

Compensation/Incentive Programs

Employee Benefits

Recruiting and Staffing

Some pain points are more specific to larger companies. For example, talentmanagement / employee relations is a bigger concern for larger companies thansmaller ones, whereas companies of all sizes listed employee benefits andrecruitment and staffing as a major concern.

Which HR products and services are you likely to purchase solutions for inthe next six months? (Top 5 responses)

17.0%

21.0%

23.0%

25.0%

27.0%

0% 20% 40% 60% 80% 100%

Compensation/Incentive Programs

HRIS and/or ERP Solution

Training and Development

Employee Benefits

Recruiting and Staffing

Marketing to HR Buyers

Not surprisingly, HR professionals are more likely to respond to an HR vendors e-mail than a phone call. When asked what their preferred method of communicationwith HR vendors is, e-mail ranked number one followed by webinars, telephone andHR conferences or trade shows. A reclusive 9% said no communication is preferred!

Thirty-seven percent of HR buyers are somewhat or highly likely to respond to asuppliers direct marketing e-mail. This is significantly higher than national normsshowing standard response rates of only about 2-5%. This wide gap is most likelyattributed to the fact that HR buyers prefer e-mail over phone when communicatingwith those HR suppliers whose products and services theyre interested in.


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Once HR buyers found vendors to evaluate, 66% relied on peers when decidingwhich vendors to enter into a sales discussion with. White papers were the thirdmost-often cited source at 45% and the fourth most-often cited source was avendors website content. Surprisingly, HR buyers put equal weight on analystreports and Internet user groups/online forums both around 21%.1

29.0%

34.0%

37.0%

60.0%

61.0%

0% 20% 40% 60% 80% 100%

Broker or Consultant

Vendor Website

Vendor Salesperson

Vendor's Brand Name or Credibility

Industry Peers

Top five purchase influencers of HR buyers

The message here is for vendors to actively engage in ongoing marketing and PRactivities that lead to high visibility amongst HR buyers. In other words, if the buyerdoesnt know who you are, they are less likely to consider you a credible brand.

Which departments are involved in the purchasing of HR productsor services?

32.0%

37.0%

53.0%

0% 20% 40% 60% 80% 100%

CEO or Business Owner

IT

Finance/Accounting

However, purchase influencers differ depending on the size of company and the typeof HR product. For example, the CEO of a smaller firm is likely to be involved in thepurchasing of almost any HR product or service whereas at larger companies theymay only be involved in major purchases like HRIS.

Regardless of the above research, HR suppliers must be able to answer some basicquestions about their target buyers:

1. Who are they (by title)?2. What are the typical demographics of your buyer?

3. Who are the influencers?4. What are your buyers major pain points?5. What events do your buyers attend?6. What HR web sites and blogs do your buyers visit?7. What print trade publications do they read?8. And most importantly, how do these questions differ by target company size

or sales channel?

1The Wisdom of Crowds


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Where Should HR Vendors Spend TheirMarketing and PR Dollars?

A lot of factors influence your marketing budget allocation, like type of productand/or service you sell, your total available market and current market share, yourchannel strategy, your selling price, the average lifetime value of a customer andmore.

However, far too many vendors dont carefully consider how much they shouldspend on marketing and where to spend it. As a general rule, you should allocate20% of your operating budget for marketing activities. But regardless of how muchyou spend, marketers must be ready to accommodate prospects needs and meetthem where they are whether that be online or via more traditional routes.

Traditional methods of generating demand, such as print advertising, publicrelations and print-based direct marketing, are still perceived to be the mostvaluable tools for marketers. But broad-based brand advertising has provenineffective as a strategy for marketing HR products and services, especially when

used exclusively, because:

! No single medium exists that can effectively deliver your message to themarketplace. For example, SHRM has 200,000 members, yet there aremillions of potential HR buyers; so advertising through SHRM will miss mostof your prospects.

! It is not targeted, and a generalized message is always less effective than atargeted one.

The flood of marketers who still rely on conventional tactics will likely get swept upand lost in the flood of competitive marketing messages. Prospects are searchingonline for information and assistance in determining what they need and who to buy

from. To reach these buyers, you must have a significant online presence so thatthey can find you as they search for data, best practices, news and productinformation. Achieving greater online visibility requires use of multiple online tools,including a website optimized for search engines, use of online media outletssupplying relevant online content, blogging, and podcasting.

Marketing 2.0 creates more opportunities for reaching prospective clients with amore relevant message and provides better metrics for measuring ROI. Withoutprinting costs, online marketing lets you segment your prospects and tailor yourmessage to the segments, which is proven to increase response. Additionally, onlinemetrics such as website traffic, search engine rankings and qualified leadsgenerated are easier to track and more significant evaluators of ROI than traditionalbranding metrics.

Conclusion

For more information about marketing and PR in the HR marketplace, look for morefrom the Trends in HR Marketing series. Each installment will include valuableresearch results from surveys sent to thousands of HR suppliers and HR buyers, as


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well as analysis from HRmarketer.coms leading experts on marketing and mediavisibility.

About HRmarketer.com

HRmarketer.com is a service of Fisher Vista LLC, a marketing and informationservices firm focusing exclusively on the human capital industry. Through itsMarketing PR services, the company has serviced nearly 500 human resource andemployee benefit service providers, helping them generate publicity, website traffic,sales leads and improved SEO.

HRmarketer.com No other marketing or PR firmunderstands the HR industry better than we do.

PO Box 10, Capitola, CA 95010831-685-9700

[email protected]

2007 HRmarketer.com. All rights reserved.HRmarketer.com and Fisher Vista are registered trademarks.

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