Cloud HR Software: 6 Reasons UK Businesses Need It

HR Cloud Software

What does it mean to have your HR "on the cloud"? Cloud-based HR software and systems come with their benefits and drawbacks. What are the arguments for and against using a cloud-based HR solution? Let's dive into it right now...

Looking for a (new) HR software? This guide helps you choosing the right one.

What is HR Cloud Software?

A cloud-based HR software is typically part of a subscription-based software as a service (SaaS) proposition. In exchange for a monthly or yearly fee, you can access a software solution that houses all of your data, processes and HR work.

In the case of cloud-based HR systems, providers take care of all your typical technical matters: operation, troubleshooting and ongoing development. All you need to do is log in to the software with your credentials, and you can then immediately start using it!

When it comes to your data, it is typically stored on the provider's servers. As long as you have internet access, you will also have access to your data from anywhere you like (more on data security a bit later on...).

What Are the Core Benefits of HR Cloud Software?

Let's talk about some of the major functionalities and benefits when your HR is on the cloud...

1. Functionality

Cloud-based HR solutions often offer a defined scope of functions that can be adapted to individual requirements. Selected functions can be activated or deactivated, as needed.

When it comes to functionality, it helps to find HR software that can cover each stage of the employee life cycle. That would typically include functions like:

  • Recruiting

  • Onboarding (and offboarding)

  • Performance and development

  • Employee training

  • And more...

These same features are also consistently being improved upon, with new features being added at the same time. That brings us to our next point...

2. Innovation

SaaS providers develop their solutions on an ongoing basis, as their customers demand something in return for their monthly subscription fees.

As soon as the provider releases and rolls out new functions or fixes (i.e. activates these within the software), they are immediately available to all customers at no extra cost and with no additional work.

For that reason, an HR team never needs to request more budget or plan an IT project to be able to use new features and the latest product version. Innovation is baked into the operating model for cloud-based HR systems.

3. Reliability

Ensuring seamless operation and constant availability are among the core tasks of any cloud software provider. Data is hosted in state-of-the-art data centres with multiple (“redundant”) sets of hardware.

If one set breaks down, there is always an alternative. Providers guarantee availabilities of 99.9% and higher.

Calculated yearly, the software may fail for only a few hours in total and must otherwise be reliably accessible.

4. Scalability

It's incredibly important that software "grows" with your company. Mainly, that it remains suitable for more intensive usage and larger numbers of users.

It also means that scaled-up software will continue to run fast and seamlessly. This is particularly important for you if you are the HR manager at a rapidly growing company.

With cloud-based HR systems, you don’t have to worry about future growth, as you’ll easily be able to subscribe to larger user numbers and extended functions.

If you need more or faster servers to access these services, the provider will take care of that in the background.

5. Accessibility

Accessing cloud-based HR software can be done from anywhere, as long as you are online and run a browser.

Even the device is irrelevant, as the software can be accessed from desktop or laptop computers, tablets and smartphones.

6. Interfaces & Integration

Cloud-based solutions come with a number of standard interfaces and can be integrated into your existing system framework.

At the same time, cloud-based HR software often offers a host of integrations with other applications and tools. And, the list of these integrations is always growing (or, it should be growing if you are using the right HR software).

Developing customised interfaces for your systems, in contrast, is usually not possible or extremely costly.

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Should You Use Cloud-Based or On-Premise Software?

The software you operate yourself (otherwise known as on-premise software) is only ever as good as your IT department. As a result, comparisons are difficult.

If you have generous budgets, sophisticated server technology and offices full of developers, your internally developed software will most likely be better than any cloud-based solution.

However, if your IT resources are limited, you’ll need to examine very carefully whether you’ll be able to operate purchased software at all, or how well you’ll be able to do that.

How Much Does Cloud-Based HR Software Cost?

If HR software costs £2,500 per month for a company with 500 employees (a realistic assumption), it’s easy to calculate that the yearly cost will be £30,000. But, let's dig a bit deeper when we talk about costs...

Compare this with one-off license fees of £20,000 for purchasing on-premise HR software. Sounds like a better deal, no? This is a dangerous comparison to make, and often one that can doom an organisation's HR processes.

That's because it ignores the costs of an on-premise solution which include:

  • Development

  • Maintenance

  • Operation

As a result, you should really consider the "total cost of ownership" when it comes to purchasing any kind of HR software.

As a rule, assume that cloud-based solutions are more economical for small businesses. The larger a company, the more financially attractive it becomes to operate software on-premise.

Is Data on a Cloud HR Software Safe?

It depends on your provider. Software providers should be incredibly aware of the responsibility they assume in terms of data protection. very much aware of their responsibility in terms of data protection.

When selecting your own cloud-based software, read the security and data protection information closely and request copies of relevant certifications. Good providers will be prepared, have the necessary contracts in hand and offer you additional support in the form of guidelines and checklists.

When is Cloud-Based HR Software Right For You?

More and more companies find themselves using cloud-based HR software to simplify all of their otherwise-cumbersome and painstaking tasks. So, if you find yourself:

  • Managing a myriad of spreadsheets

  • Processing absence requests manually

  • Checking multiple inboxes daily

  • Feeling frustration from your employees

  • Lacking buy-in from your executives

Any of these signs, or a combination of them, are reason enough to start considering an HR software more fitting to your needs.

After all, HR software isn’t meant to make more work for organisations – its purpose is to support HR, line managers and employees in doing their work with greater efficiency.

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Using Personio, you can manage all your most important HR processes from one place. Recruit, manage, develop and pay your employees from one centralised HRIS.

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For line managers, Personio seamlessly builds automated performance cycles, tracks vacation days and keeps employee information up-to-date (and in a compliant fashion).

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Speak with an expert today about your HR needs and how Personio can meet them. Or, give Personio a spin for yourself by starting your very own free trial right now. It’s all yours for 14 days.

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