'Monumental': Businesses reveal impact of buying wrong HR software

New report also reveals factors contributing to regret

BY Dexter Tilo 27 Nov 2024

More than three in five businesses across the world say the financial impact of choosing the wrong HR software is "significant or monumental," according to a new report.

Capterra's 2025 Tech Trends Survey, which surveyed 3,500 respondents in nine countries, found that 28% of regretful software buyers point to an HR software purchase as the cause.

Among them, 62% said the financial impact of the regretful purchase was "significant or monumental," with the top business impact being increased costs (54%).

The report indicated that the top cause for regretful purchases is relying solely on vendor-provided information, a practice admitted to by 90% of regretful businesses.

"Vendors are important sources to learn about product facts such as price and features. Buyers shouldn't dismiss them outright," the report read.

"But successful buyers go a step further and round out their product research by counterbalancing vendor information with what they learn from reputable third-party sources."

Other mistakes that regretful HR software buyers make also include:

Regretful buyers are the sole decision-makers: This means only one person was responsible for purchase decisions, instead of having a mix of IT specialists, management stakeholders, and prospective users.
Regretful buyers don't make a plan: Regretful businesses fall into the external pressure of buying new software with the latest functionality without a plan.
Regretful buyers are hesitant to change their list of options: Regretful buyers tend not to change their initial list of software options for simplicity's sake or to save time.
Regretful buyers rely too much on Google and ChatGPT: Regretful HR software buyers are far too influenced by Google Search and generative AI, as much as they're influenced by customer reviews.
Regretful buyers don't understand the total cost of HR software ownership: Regretful buyers are likely to miss the fact that the subscription licence is not the only cost with B2B software, as it may include expenses associated with setup, data migration, customisation, user training, or customer support.

Impact of HR software

The HR software market is one of the largest B2B software categories, with almost 2,000 products listed in Capterra alone.

Brian Westfall, principal HR analyst at Capterra, said the function of such software covers not only the HR department, but also other employees, even job candidates.

"This raises the stakes for businesses to invest in the right HR software. Beyond the financial impact, poor purchase decisions can also lead to operational and reputational consequences, since the efficacy of these HR platforms can have downstream impacts on the employee and hiring experience," Westfall said in a statement.

According to Capterra's regretful HR software buyers, the top change that they will make to avoid future regret is to clarify goals and desired outcomes (41%).