Managing Vendor Relationships

I met with a colleague recently, and over coffee we chatted about the job. Somehow, we started swapping open enrollment stories, and I was struck by how much the success or failure of an open enrollment experience is dependent on the insurance broker we were working with at the time. For an HR department of one, or any small HR team, vendors can make or break the success of the operation.

A small HR department means that we represent smaller organizations. We’ll never be a big client or bring our vendors high sales numbers. There are some great boutique vendors that serve smaller companies, but they also tend to be smaller themselves and can be stretched thin. How can we ensure that our vendor relationships fully support our work? By managing expectations, both our own and our vendors.

When looking for a vendor, whether a health insurance broker, HRIS or payroll system, outside anti-harassment training, or any other of the many functions a small company may outsource, it’s important to know what is reasonable to expect. Read up on some of the ATS functions available, and you can be star struck by the options out there. However, some of the more advances technologies are really expensive. It might be cost effective when you have thousands or tens of thousands of employees, but when your employee count numbers in the hundreds or even smaller, those options might not be reasonable for you. Educate yourself and know what services and technologies make sense for a company of your size.

Once you know what you can and cannot expect, it’s time to manage your vendor’s expectation. Know what is important to you. Do you want a dedicated service representative that will know you and your company personally? Or is 24/7 call-in support more important? Do you need a company that offers to go over your needs and suggest additional services that you might not be aware of? Or do you dislike the upsell and want to control exactly what you are going to see? There are many right ways to work with a vendor and knowing what works for you is critical. Communicating those preferences to your vendor is critical.

Finally, be a good customer. Make sure you’ve read your vendor contracts thoroughly and you know exactly what they have promised to provide. Don’t ask for things outside the scope – or be prepared to pay for it if you do. Communicate your needs to your vendor; don’t just wait for your vendor to contact you. If the makeup of your workforce changes significantly, don’t wait until your broker brings you renewal rates for the year – reach out and talk through how your insurance needs might be changing.

Part of being a small HR department means partnering with vendors in order to provide our employees the full range of services they deserve. Knowing how to manage those vendor relationships can make our lives easier, and our departments a success.

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