Why Price Wars Are Killing HR Tech Companies and How Prajjo is Changing the Game
Few customers pay for the utility, most for the perceived value.
HR Tech solutions, for whatever
reasons, fall in the first category. Utility
buyers focus on functionality and cost; they pay for what the product does.
On the other hand, Value buyers focus on outcomes, experience, and perception, they
pay for what the product means to them.
HR solutions do not mean much to the Business Fraternity!
Despite HR reaching a strategic
position, occupying a chair on the board, the impression it still conveys is mere
of Utility.
Businesses often compete more on perceived value than on utility because perception drives pricing power and loyalty. Lower the perceived value, lower the price.
Despite so many years being in
the market, HR Tech companies have miserably failed to elevate their value
proposition in the eyes of the customers. Who is responsible for it?
Of course, HR Tech Companies.
HR Tech
companies failed to increase the Perceived Value
Technology is far away from
imitating the human brain. Efforts are going on, results are limited.
With this constraint, companies with their experience in the automation of 'Pure Mechanical' processes of Business Functions, picked up for automation likewise all those HR processes that are mechanical or in other terms, can be seen with the ‘Naked Eyes’. Other reason for their choosing 'mechanical HR processes' is these processes are having comparatively lessor complexities & data handling for them is very easy.
Another aspect is the entry barrier into the HR industry. It is per se very low. Any two software engineers can come together and can enter the industry by developing softwares for basic HR practices like leave, attendance & payroll. It doesn't require much knowledge & money. Resulting into formation of companies by people having no good understanding of HR, but an opportunity for making quick money. It is the main reason for mushrooming of HR Tech companies. Surprisingly, the big names like SAP, Oracle etc did not join the bandwagon for a long time and when they decided to enter, they entered through acquisition route. HR is not a serious business for them as it generates low value in terms of revenue. They however due to their strong ERP capabilities & presence are easily arm-twisting companies to go for their HR products with exorbitantly high cost. Companies do realise their mistake later, but only after spending a good amount of money.
The image of HR as a 'non-business' function along with the low value delivery from these companies, made the customers first lower down their expectations from the 'offered' solutions and then refused to pay as good price as for an ERP product, forced HR Tech companies for price wars. End result bad name for 'HR'.
Even after approx. 20 years, more than 90% of the HR Tech companies do offer mere basic automation for Leave, Attendance, Payroll & Separation and the remaining 10% have covered few more HR processes, like Recruitment & Selection, Performance Management, Learning Management System but with many ‘Big loopholes in their solutions. If you carefully evaluate the automation so far done for these ‘High Value’ HR processes, it is mere procedural simplicity that available technologies can provide. For example, ‘Bot Interview’.
The worst thing is that we HR people are trapped in it. HR never asked for better.
Although, technology has helped HR going beyond its conventional boundaries by opening up new fronts for it like Rewards & Recognition, Gamification, Employee Well-being etc. HR Tech companies are far-far away from solving real HR challenges, failing to help HR becoming a ‘Business Function’. The function that can produce ‘Numbers’ for number-obsessed business world.
There are many but will share only two examples here. To know more, visit Patents section at www.prajjo.com
‘Hiring-Firing’ is
one the most anti business - anti employee activities. Companies do invest first in hiring, then when
they fail to achieve their business results, resort to firing. It is easy. But
it comes with lots of unproductive cost. The cost, which sometimes takes many years to
recover or even ends with the company closure. If not, then a major ‘Dent’ on
the ‘company image’ that makes it difficult for the organizations to even stand on their legs for a long time. HR Techs can help organizations to get the numbers or visible indications for CXOs so that they can save their companies from the impact of this menace. It was tough, hence no HR Tech touched it. Prajjo did. It offers a solution now. A copyright solution.
Another example is of ‘Workforce Planning & Budgeting’. Academically, the process of workforce planning & budgeting is dependent on the annual business budgets & corresponding production plans for the year. HR depending upon these production targets, plans the availability of 'Number' of people. The entire process runs purely on ‘Headcounts' i.e. the number of people. HR shrugs off its responsibility by only providing number of people without looking at gaps between the skills & competencies required to meet production targets vs. given headcounts bring on the table. Consequent to this, either companies do fail to meet their production & business targets or end up with lower profits owing to unused cost for surplus labor. HR Techs need to work upon such challenges and fill in the gaps, mathematically. Prajjo again looked at this challenge constructively and now offers an AI - Centric solution. Again a copyright.
HR deals with people hence it has umpteen challenges. HR Techs need to come forward and provide solutions for such Business or HR challenges, thereby making HR to contribute in numbers to Revenue and Profit directly like other functions and help in its becoming primary. Prajjo is determined to contribute to it.
Façade change will not work for HR
to improve its ‘Perceived Value’ in the eyes of businesspeople. Superficial changes like OKR won’t make HR to travel a long distance. When you do not have a car but only a bullock cart, all
the praise will be for it. HR has to avoid slipping into it.
Complete HR Metamorphosis
HR has to metamorphose itself completely. It has to turn its coat inside out, if it has to become Business Relevant.
The function per se has to make all
possible efforts to shed its label of a secondary function. Limited success can
be seen in some HR professionals reaching to the CEO level or having entered
the boardrooms. This success is due to their personal efforts and cannot
be contributed to the function.
In absence of higher perceived
value, HR Tech companies have no other option but to offer only ‘Opportunistic
Pricing’. But this is Killing HR
Automation considerably. Resulting outcomes are
- Race
to the Bottom with Poor Quality
HR Tech companies slash prices to win deals, which often means cutting corners on product development, support, and innovation. - Erosion
of Trust
When pricing fluctuates wildly, buyers question the true value of HR automation. It feels like a commodity rather than a strategic investment. - Short-Term
Wins, Long-Term Losses
HR Tech companies focus on volume instead of sustainability. This leads to fragile business models and eventual market exits, leaving customers stranded. - Perception
Problem
Cheap pricing reinforces the belief that HR automation is “low value,” unlike ERP or CRM systems, which command premium pricing.
HR Tech companies have struggled to elevate perceived value & have failed so far, and that’s a big reason why adoption and willingness to pay remain limited. Reason for this state of affairs is:
- Focus
on Features, Not Outcomes
Almost all HR platforms talk about what they do (attendance, payroll, compliance) instead of the impact (better productivity, reduced attrition, improved engagement). - Poor
ROI Communication
HR leaders and CXOs want measurable business outcomes—cost savings, efficiency gains, talent retention. Almost all HR Tech companies fail to quantify this clearly. - Commoditization
of Core Functions
Basic HR functions are seen as hygiene factors, not strategic enablers. Without differentiation, customers perceive them as low-value utilities. - Weak
Integration with Business Goals
HR Tech often operates in isolation, not tied to revenue growth, innovation, or competitive advantage.
The HR Tech industry is in
turmoil. HR Tech companies are slashing prices to win deals, turning HR automation into a
commodity. The result?
·
Poor product quality
· Erosion of trust
· Stalled innovation
HR for
PRAJJO Team
But here’s the truth: HR automation isn’t a “nice-to-have.” We at Kenbox, the brand owner of Prajjo know it very well. HR for us is a strategic enabler for productivity, compliance, and employee experience. Prajjo is committed to make HR a business first function with continuous Research & Development. Prajjo offers pure business centric HR solutions. We have already made a strong presence by
- Shifting from
Process Automation to Business Impact
Prajjo has rolled out many copyright products that show how HR Tech drives profitability, culture, and innovation.
- Data-Driven ROI
Stories
It is not mere analytics
but deep procedural conviction to prove tangible outcomes like reduced hiring
costs or improved retention.
- Position HR Tech as
a Primary Function
What matters most to
business leaders is under our radar: productivity, employee experience, and
organizational agility.
At Prajjo, we believe the future of HR tech isn’t about the lowest price—it’s about maximum value. That’s why we’ve built a comprehensive, scalable platform that delivers:
- End-to-end HR Automation
- Business Sensitive Solutions
- Bridging gaps, left by erstwhile HR Tech companies.
- AI-driven insights for smarter decisions
- Transparent, value-based pricing
Research is in our Blood
We have received 07 Copyrights,
so far. An achievement of its own kind
in the sphere of HR.
Let’s talk about building sustainable HR automation that drives real business impact.
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