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The typical HCM evaluation process excels at answering an important question: Does this software do what we need?
It rarely answers another one: Will the vendor make the same decisions in year three that it's making today?
Rigorous evaluations do a great job of covering the fundamentals: requirements matrices, security questionnaires, reference calls, implementation scoping and legal review. That's a strong foundation to understand your needs.
But a category of vendor risk is less likely to make the formal RFP scorecard: vendor financial behavior, organizational health and the structural pressures that determine whether the platform you're signing today will be on the same trajectory next year.
Those considerations matter more now than ever before.
Top ERP and HCM Provider Stocks Are Struggling
You might not pay close attention to the stock performance of your HCM, but you can bet the point person for your support team or a key product person is.
Workday just posted its best Q1 new-ACV growth in five years. SAP reported 27% cloud revenue growth. Oracle announced record revenue of $19.2 billion, up 21%. Incredible financial results in any environment.
Its stock then dropped by 35% in June.
SAP stock is near a 52-week low. Workday stock is down more than 40%, its worst stretch in years. Oracle is hurting less, but only relative to the other two.
The software-as-a-service market as a whole is pricing in "seat compression" fears: the idea that AI reduces the per-seat headcount these vendors bill against, compressing multiples regardless of what the income statement says.
For the first time on record, enterprise software now trades at a discount to the S&P 500. These are profitable companies beating expectations. The pressure that comes from a multi-quarter stock slump at an equity-heavy company operates somewhere else entirely.
What a Sustained Stock Decline Actually Does to a Vendor
Gartner's third-party risk management framework names financial viability as an explicit vendor risk dimension: A vendor's ability to keep investing in product and support over time.
None of these companies are in crisis. Their ability to invest isn't in question. What is in question is: a. how effectively they can execute and b. if market pressures will have them chase initiatives that don’t help their customer base.
When equity-heavy companies face multi-quarter stock declines, the first thing that breaks is the retention mechanism designed to keep critical people in their seats.
Broad-based stock options work as a retention tool only when stocks are up. Underwater, the mechanism is much less effective.
Research from Dunford, Boudreau and Boswell found that the more underwater an executive's options are, the more likely they are to search for other jobs, even controlling for time value. The senior engineers and support staff who maintain mission-critical ERP and HCM platforms are exactly the equity-heavy leaders whose handcuffs loosen first.
When companies try to fix this, they pay in dilution and cash. Google's 2009 options exchange cost roughly $460 million in stock-based compensation expense. Workday's stock-based comp runs around 40% of revenue. None of that is a cost-free fix, and the fixes take time.
There's a more direct mechanism, too. A survey of 401 financial executives by Graham, Harvey and Rajgopal found that 78% admitted to sacrificing long-term value to smooth earnings, and 55% said they would skip a positive-NPV project to avoid missing the quarter. The cuts easiest to justify under this kind of pressure are the ones that move the numbers without showing up in next quarter's revenue: support headcount and R&D projects without a near-term ship date.
Workday cut roughly 400 jobs in February 2026, concentrated in Global Customer Operations. That came less than a year after a round of 1,750 in 2025. The February cuts were in support, not sales. The customers who feel those cuts are likely stuck, at least for now.
These Questions Belong in Your Vendor Evaluation
Disqualifying a vendor because its stock is down misses the point.
These conditions are a reason to ask questions many buyers skip. A few that belong in every serious evaluation right now:
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How is your engineering and support talent compensated, and what's your voluntary attrition trend in core product and customer support? A vendor that can answer this with data is doing the right things internally. One that deflects is telling you something.
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How do you balance your innovation roadmap against the platform stability your existing customers depend on? That question separates vendors managing long-term customer relationships from ones chasing demo features to close new logos.
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What is your roadmap and support commitment, contractually, if you're acquired or taken private? This one matters more than it did two years ago. Dayforce was taken private by Thoma Bravo and delisted in February 2026. That's not a speculative scenario. That's a live HCM vendor that changed ownership structure, incentives and exit horizon in a single transaction, and the customers signed up before any of that was on the table.
On the contract side, it’s worth insisting on data-portability and exit provisions, defined transition assistance and change-of-control language. These are standard in well-run procurement but it’s worth noting that, now more than ever, anticipating the worst is incredibly important.
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Glassdoor, Blind And Reddit Are Messy. Use Them Anyway.
Employee review platforms are easy to dismiss: self-selection, recency bias, employer astroturfing. Glassdoor had its own problem in 2024 when it added users' real names to profiles without consent, chilling exactly the candid negative reviews that made the data useful.
But Glassdoor's own research found that layoffs drop ratings roughly 0.13 stars overall and hit senior leadership and culture sub-ratings hardest. Recovery takes more than two years and still at a measurable pre-layoff dip.
HR leaders can tell the difference between legitimate concerns about an organization versus sour grapes. Read the last 20 to 30 reviews for repeated themes: "Do more with less," leadership churn, missed roadmap commitments, attrition in senior technical roles.
Cross-reference with Blind, which uses verified employees and tends to surface current morale more reliably. And yes, it’s also worth making a few searches on Reddit to see what people are talking about there. Not all of it will be worthwhile, but you’ll likely see some trends you won’t find on a formal RFP response.
Treat all of it as a question generator, not a verdict. Take the themes back to the vendor and its reference accounts, not as a score to accept at face value.
The Cautionary Tales Aren't Bankruptcy Stories
The vendors that have caused the most downstream pain for locked-in customers were profitable throughout. That's the point.
Broadcom's acquisition of VMware ended perpetual licenses within a month. Price increases of 2x to 12x followed. One UK university's renewal jumped from roughly £40,000 to £500,000. Broadcom was not in distress. It was executing a business model, and customers who hadn't negotiated change-of-control protections had no leverage.
Cornerstone OnDemand, taken private by Clearlake Capital in a $5.2 billion deal in 2021, proceeded to acquire Saba, EdCast, and SumTotal in quick succession, bundling all of them into a unified "Galaxy" platform. In autumn 2025, Saba customers received notice that their platform was being discontinued with a migration to Galaxy within two years that was not optional. Customers who had evaluated Saba before the announcement now had a different vendor roadmap, a different product and a deadline they didn't negotiate.
In both cases, a traditional vendor financial risk checklist would have cleared the deal. The questions that would have identified the risk aren’t typically on anyone's RFP: What does a change of ownership mean for your pricing structure? What's the exit strategy and over what timeline?
The RFP Was Built for a Different Risk Environment
The median ERP implementation runs more than 15 months before go-live. After that, the system typically runs 7 to 10 years. You're evaluating a vendor for a relationship that will outlast the employment of most of the people who signed the contract.
The feature set still matters. So does whether the vendor can staff the people who support it, sustain the development pace they're promising and stay aligned to your interests if their ownership or incentive structure changes.
The procurement frameworks HR already works alongside are designed to surface exactly these things. The gap is applying them holistically: the RFP was built to answer whether the software does what you need it to do on day one, not whether the vendor will still be who you thought they were.
That's a section worth adding to your RFP.
Editor's Note: Procurement decisions are definitely getting more complicated. Here are other related takes:
- Minimizing the Fallout When a Vendor Sunsets Your Digital Workplace Product — Reality check: vendors won't provide the products we rely on for forever. Here's how to prepare for that inevitable day.
- How to Break Up With Your Digital Workplace Vendor — With so many new technologies, it may be tempting to part from your vendor to (hopefully) greener pastures. Before you do, consider these risks.
- Atlassian Cuts 1600 Jobs — and Exposes the Biggest Crack in the SaaS Growth Model — Atlassian cuts 1,600 jobs to fund AI. But this isn't just one company restructuring — it's the clearest sign yet that the SaaS growth model is breaking apart.