Understanding “Price” versus “True Cost of Ownership”
Recruitment needs to look beyond the surface level. This applies not only to your candidates, your contracts, or your business plans, but also to your technology.
We’re talking about your “tech stack”: the collection of technology tools and systems you use. They’re added to meet a business goal, enhance proactive recruitment or address a pain point.
There’s more than meets the eye in any tech stack. This is especially true for recruitment businesses, where you might be using five or more tools: a CRM, website, analytics dashboards, timesheets, invoicing, and others.
You might look at it as a beautiful structure - like the fraction of an iceberg jutting out of the ocean. But the underside of that same structure has some lurking threats that could sink you. You don’t want your rec firm to go the way of the Titanic.
The problem is that tech stacks grow over time.
With the explosion of SaaS tech, plus short-sighted planning, it’s a little too easy to add on more and more. Eventually, what helped the business starts to hurt the business.
It’s time to take an honest look at your tech stack. Here’s a deep dive touring some of the dangers lurking below.
The first facet to examine: your TCO.
True Cost of Ownership
There’s the price of a tech stack, and then there’s the True Cost of Ownership (TCO).
It’s not just the price you paid when you signed the dotted line on your contract. The TCO comprises all ongoing and associated system expenses.
This covers a lot of territory: from implementation to management to add-on costs. All that, plus salary costs for your staff, plus the need to ‘babysit’ it, and then any costs for downtime, maintenance, and upgrades.
Over the tech’s lifecycle, it adds up to more than just a bit of money.
Integration & Customization Nightmares
“Customizing” your tech stack is great, but it’s all on you.
First you have to assign people to implement any integrations. These projects can drag on, stealing time and money from other priorities.
Then your “customized” tech stack is off the product roadmap. Your system will be excluded from further upgrades and development.
Compliance Timebombs
Data privacy is non-negotiable, especially when you’re dealing with thousands of candidates’ personal information daily.
With every new tool added to your tech stack, you have more hidden places for data to collect.
Each is one more “drawer” to clear out when it comes to any GDPR or data privacy requests.
For example, an old candidate might put in a “right to be forgotten” request. Your admin team might think they’ve cleared it up by removing this candidate’s info from the CRM/ATS. But what if they miss the same data hidden in your candidate portal? Or your video interviewing platform? Or your website?
Clearing up this clutter isn’t just an admin headache: it’s a danger for compliance.
Misaligned Contract Dates
Maybe you signed up for a recruitment CRM two years ago. Then you got some integrations: an online timesheets tool a year ago, and an analytics dashboard six months ago.
What if you want to change vendors?
You can’t. Once the contracts are signed, you’re locked in. With mismatched contract end dates, you’ll have a hard time escaping this mess. Watch out for the danger of paying for what you don’t need.
Separate Training & Support
Multiple vendors also means multiple training & onboarding processes.
And it doesn’t stop there: now you’re worried about a number of overlapping release cycles and keeping track of different customer support portals.
When it comes to integrations, the “vendor blame game” is real. Careful that you don’t run into a vendor who’s quick to sell, but slow to support.
Ever-Growing Admin Team
Tech relies on people. Much as you might try to automate, you’ll need admin and IT support to keep the system running.
Consider the personnel costs involved in propping up your growing tech stack.
Siloed Data & Reporting
With different tech tools, data gets trapped in isolated pockets across the system. It won’t be long before you’re resorting to manual data entry and spreadsheet wrangling.
For example, maybe you run a Temp desk. You want to know how many Temps are starting or finishing in a given time, and check up on redeployment analytics. It will take ages for your back office to pull these stats just by using spreadsheets.
If it gets to that point, can you even trust your data? No matter how reliable your team is, human error will compound on itself until your reports are next to useless.
The end result? Excel Hell.
Conclusion
All of the points above - from integration nightmares to deadly data - add to your tech stack’s TCO. Together they create an unnavigable “iceberg” tech stack that only gets in the way of business progress.
It’s not just the money that’s at stake, but the time, energy, and uncertainty involved in trying to work with disparate systems.
When’s the last time you took an honest look at your tech stack? You might be afraid to - it’s dark and deep down there.
Dealing with tech stacks can be intimidating. But where there are dangers, there are also opportunities.
Not sure how your recruitment tech stacks up? Take our 90-second audit.