If you bought a phone, a car lease or a coffee machine in the last six months, you almost certainly paid monthly. So why is your HR software vendor asking you to sign for five years? The answer is simple, and it isn't flattering to the vendor.
The maths nobody emails you
BrightHR publishes three contract lengths on its pricing page: 24, 36 and 60 months. The 36-month tier is the only one you can buy online — the longer terms are routed through sales. Its top "Full" bundle (HR plus health and safety plus EAP) starts at £28.20 per employee per month.
Run those numbers for a 50-person SME on the 60-month deal:
50 employees × £28.20 PEPM × 60 months = £84,600.
That is the cheque you are writing the moment you sign, before anyone has logged in, before your first absence is recorded, before the platform has proved it works in your business. On the cheaper "Core" tier (£16.67 PEPM) the same team commits £50,010 over five years. The 36-month online option for that same team still locks in £30,006.
Now look at what BrightHR's own published terms protect. The platform sells a price freeze for the contract length — fair enough — but the cancellation clause works the other way. Multiple public Trustpilot reviews describe being asked to pay 80% of the remaining term to exit early, and one December 2025 reviewer reported being auto-renewed into "a further 3 year contract" after signalling they wanted out. A 2026 buyer guide (Expertsure) lists "no rolling monthly option — minimum 24-month contract for online sign-up" as the first con of the platform.
That is a £30,000–£84,000 bet on a system you have not used, with an exit door that costs almost as much as staying.
Why vendors still push it
The model isn't an accident. It is the entire commercial point.
Multi-year contracts let a vendor book the revenue up front, smooth the renewal cycle, and lock the customer through any procurement review for the next two boards in a row. A 60-month deal turns a 50-employee SME into £84,600 of predictable recurring revenue with no churn risk — the sort of contract that improves the vendor's valuation multiple, not yours.
The renewal mechanics matter just as much. If the cancellation window is six months before renewal (as several Trustpilot reviewers report for BrightHR), and the default on the back end is auto-renew, then any customer who misses a single calendar reminder rolls into another full term. The vendor is not relying on you loving the product. It is relying on you forgetting.
This is legal in the UK — for now. SME Today's legal column notes that English courts are "reluctant to interfere with terms commercial parties have entered into, even if they result in a bad bargain for one of them". The Digital Markets, Competition and Consumers Act 2024 (Pinsent Masons summary) tightens the rules for consumer subscriptions in spring 2026, but it does not yet cover B2B. The legal protection is thinner than most SME founders assume.
Why SMEs are walking away
Four reasons keep coming up in procurement conversations.
1. Headcount moves faster than the contract. A 50-person SME signing in 2026 is, statistically, not a 50-person SME in 2031. Personio's standard contract — verified at CostBench in April 2026 — explicitly disallows mid-term licence downgrades. So if you signed for 50 seats and the team is 32 by Q3, you keep paying for 50. Five years is a long time to be wrong about your headcount.
2. The category is moving. Tropic's 2026 SaaS procurement outlook flags a shift away from rigid multi-year per-seat deals toward usage-based and rolling agreements; 81.2% of vendors in their survey said inflexible payment terms now cost them deals. HR software is one of the last hold-outs.
3. The exit is the product. When the cancellation clause requires 80% of the remaining contract to leave, the platform doesn't have to be good — it just has to be expensive to leave. That's a tell.
4. Audit and board pressure. Finance directors of growing SMEs are increasingly asked to defend any commitment longer than the firm's average customer contract or its longest debt facility. A five-year HR software lock-in rarely survives that conversation.
The rolling-monthly alternative
The UK market already has working examples of the other model.
Breathe HR, verified on its own FAQ on 10 June 2026, states: "you are not tied into any long-term contract, Breathe works on a rolling monthly subscription". Cancel any month, pay only the current month. CharlieHR runs a similar subscription model with team-size-based pricing and no published multi-year tiers (verified on charliehr.com/pricing on 10 June 2026). Both publish their contract terms openly.
Personio sits in the middle — a 12-month minimum with an 11-month notice window before auto-renewal — which is still a meaningful lock-in, but one tenth of BrightHR's longest tier.
WagePerks sits at the rolling end of that spectrum: £4.50 per employee per month, monthly billing, cancel any month. The point is not which logo you pick; the point is that the rolling model is no longer experimental. It is the standard everywhere except the corner of HR software still leaning on 60-month paper.
What to look for in a contract — the six-point checklist
If you are mid-procurement, run any contract you're handed through these six questions before you sign.
- What is the minimum term? If the answer is more than 12 months, you need a reason. "It's how we do it" is not one.
- Is auto-renewal on by default, and what is the notice window? Anything longer than 90 days is a flag. Six months is a trap.
- What is the early-exit cost? A clean break clause is rare. A penalty equal to 80% of the remaining term is the upper end of what UK SMEs should accept — and most shouldn't.
- Can you downgrade mid-term if headcount falls? Personio's contract explicitly says no. Make sure yours doesn't.
- What happens to your data on exit? Look for a written export window — minimum 30 days, ideally 90.
- Are the contract terms on the pricing page, or behind a sales call? Vendors who publish their terms tend to write fairer ones. Vendors who don't, don't.
A rolling monthly contract answers most of these for you by default. That is exactly why some vendors will not offer one.
Closing thought
The 60-month HR contract isn't disappearing because vendors got generous. It's disappearing because the maths stopped working for the customer. A 50-employee SME signing a £28.20 PEPM five-year deal in 2026 is committing roughly £84,600 to a platform it has barely used, with an exit clause that punishes leaving and an auto-renewal that punishes forgetting. That trade made some sense in 2014. In a market where every other category bills monthly, it doesn't.
If you are halfway through a procurement and the vendor has pencilled in a 36 or 60-month term, ask for the rolling alternative. If the answer is no, compare the terms head-to-head before you sign. And if you run an SME between 10 and 250 staff, the SME employer page lays out what a rolling contract actually looks like on paper.
The vendors selling five-year paper still have a few quarters of momentum. The buyers don't have to give it to them.
Sources
All sources verified 2026-06-10.
- BrightHR Pricing — 24/36/60-month tiers, £16.67 / £21.20 / £28.20 PEPM
- Breathe HR FAQ — rolling monthly, cancel anytime
- CharlieHR Pricing — team-size pricing, no multi-year lock-in published
- Personio Pricing (CostBench, last verified Apr 2026) — 12-month minimum, 11-month notice, no mid-term downgrade
- BrightHR Trustpilot reviews — 80% exit penalty and auto-renewal reports
- Expertsure BrightHR Review UK 2026 — "no rolling monthly option"
- SME Today — Auto-renewal clauses in B2B contracts — UK courts' reluctance to intervene
- Pinsent Masons — DMCC Bill subscription impact — B2C scope, B2B excluded
- Tropic — 2026 SaaS Procurement Predictions — 81.2% flexibility stat