15+ Benefits of the Cloud-Based HR System

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Benefits Of Cloud Based Hr Software

HR automation has come a long way from employing forms and spreadsheets to using enterprise-wide HR management systems. While HRMS were deployed using in-house hardware and resources in the initial days, enterprises have come to realize the shortcomings of this approach. 

Legacy HR systems require substantial upfront investments, are difficult to customize and need ongoing maintenance. Cloud-based HR system alleviate these issues.

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Read on to understand how cloud HR systems are outshining legacy systems and capturing the market.

What are Cloud-Based HR System?

Cloud-based HR software are web applications hosted on secure servers at the provider’s end. Employees and users can log in and access these systems through a browser or native mobile apps. 

Organizations can subscribe to these platforms by paying recurring licensing fees payable monthly or annually. 

HR Cloud based solutions offers end-to-end automated HR processes, including recruitment, payroll, onboarding, compliance, and more. It also offers reporting and HR analytics that help monitor employee performance and productivity. 

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How Is The Cloud Transforming HR System?

Cloud technologies are transforming every aspect of new-age businesses.

The top 3 cloud technology providers crossed $100 billion in revenues in 2020. Even in the HR domain, cloud solutions capture market share from legacy systems as leading providers like Oracle HCM Cloud and Workday grow at more than 20% annually.

Earlier, data security concerns caused a mishmash of some HR processes using cloud technologies and others using in-house proprietary cloud system and other cloud technologies. 

Benefits of Cloud-Based HR System

Cloud-based HR software benefits in number of ways. Let’s understand major ones-

#1 Better User Accessibility

Enterprises can configure role-wise and designation-wise access to different modules and reports within a Cloud based HRMS. These access rules are easily configurable by the designated system administrator.

It ensures employee data privacy. It also enables large organizations operating at multiple locations to organize their data visibility better. 

#2 Secure Centralized Data

All data related to HR functions are available in a central database within the Cloud HRMS. It ensures employee data is de-duplicated and a consistent 360-degree view of every employee is visible across all departments within the organization. 

Other systems like the CRM and ERP can easily communicate with the central database using secure APIs. 

#3 Actionable Insights

Cloud HRMS offers ready industry-standard reports within each module. Advanced reporting can also be configured and scheduled as per business requirements. 

Validation rules ensure that the data entered into the system is accurate and in the correct format. Actionable insights derived from timely and accurate reports drive profitable strategic decisions. 

Mckinsey research says cloud-based solutions drive a 30-40% increase in productivity compared to the IT spend on average.

#4 Immediate Deployment  

An on-premise HRMS requires physical configuration and deployment of servers and network components. It can take weeks, if not months, for the system to go live.

HR Cloud based software are ready-to-use platforms running on secure third-party servers. Enterprises can purchase subscription plans as per requirements and access the platform immediately. 

Configurations and customizations can be done by collaborating virtually with the provider. Face-to-face presence is not necessary. 

#5 Faster Processes

Automated HR workflows save time by eliminating the need for email or physical follow-ups. 

Each workflow has specific turnaround times (TATs) defined at each stage. If these TATs are unmet, the cloud based HR system triggers automated reminder notifications to the concerned stakeholders. 

Also, employees can process faster with increased transparency and visibility because of self-service options available on their devices. 

#6 Flexibility

The pandemic saw the rise of the hybrid workplace. Many enterprises have continued the flexible work models even as the pandemic subsides. 

Cloud-based HR software make it easy to manage and engage remote employees through automated attendance management, virtual communication and appreciation. It also helps keep track of company assets provided to employees for working remotely or in the field. 

#7 Hassle-Free Maintenance

Since enterprises do not need to deploy physical servers, they do not need to allocate resources to maintain the same. The cloud HRMS provider handles the software and hardware upgrades with minimum downtime after business hours.  

#8 High Degree of Customization

It is easy to configure and customize cloud-based HRMS workflows using backend administration screens that are available by default. It is also possible to create customized reports and data visualizations specific to enterprise requirements. 

According to Mercer research, cloud-based solutions are increasingly handling end-to-end HR processes today.

#9 Boost Employee Productivity

Most cloud HRMS have mobile-friendly responsive user interfaces. Employees can use the platform on the go. It positively impacts workforce productivity, especially for businesses that rely on field agents for sales and service. 

Automated workflows, reminder notifications, and digital knowledgebase ensure that employees spend less time in to-and-fro email conversations and physical follow-ups. 

#10 Easy Scalability

A Cloud HRMS is easily scalable and can keep pace with the growth of an organization. 

Enterprises can increase the number of licenses and also add more modules as their business needs grow without worrying about deploying additional hardware or load testing. 

Most cloud HRMS can store unlimited documents and handle hundreds of transactions every minute without glitches.

#11 Better Employee Engagement

Cloud-based HR systems provide easy-to-use functionalities for employee communication and engagement. Internal social platforms and peer-to-peer badges foster a sense of community. 

Departmental announcement boards and HR posts streamline the newsflow across groups. Digital reward point programs motivate employees to give their best in organizational initiatives. 

#12 Improved Employee Satisfaction

Cloud HRMS provides comprehensive self-service functionalities that enable employees to request and get approvals without paperwork. HR automation ensures payroll and appraisal processes are on time. 

Employees get a real-time view of their leave balance, reward points, and KPIs. All these factors lead to higher employee satisfaction levels.  

#13 Enhance Employer Branding

A Cloud HRMS is instrumental in employer branding across the employee lifecycle. An automated recruitment process followed by a seamless onboarding experience creates an excellent first impression on new hires.

Digital workflows, online reward programs, and hassle-free payroll processing create a superior employee experience (EX). With an equally smooth offboarding, the employer brand stays with the employee even after exit. 

#14 Scope of Integration

Cloud HRMS makes it easy to stay abreast with the latest technologies. The most recent data security protocols and software updates automatically become available to all enterprises using the cloud platform. 

Also, it is easy to integrate other cutting-edge apps as plugins or through secure APIs. It ensures that enterprises keep innovating and adding more functions to the HRMS systems. 

#15 Less Paperwork

Cloud HRMS allows uploading documents seamlessly as part of HR workflows and eliminates the need to store physical copies of documents. These include employee verification documents, contracts, and policy documents. 

Cloud HRMS also facilitates digital signatures and version control with accurate logs of the changes made to each upload. It reduces clutter and increases productivity for HR executives.

#16 Lower Costs

A HR cloud based system is more cost-effective than an in-house HRMS as it does not require the deployment and maintenance of costly hardware. Enterprises can start with small monthly budgets without substantial capital expenditure. 

Also, increased efficiencies due to streamlined HR processes lead to cost savings. Predictive HR analytics also offer opportunities for cost savings through better workforce planning. 

Benefits Of Cloud Based Hr Systems
15+ Benefits of the Cloud-Based HR System 1

Future of Cloud HCM

The transition from proprietary, custom HR solutions to industry-standard cloud-based HR software will only accelerate in the future. 

A 2021 survey of 260 companies by Information Services Group (ISG) found 46% using Cloud HRMS or a hybrid solution, up from 20% two years ago. The survey also found that 57% of organizations expect to be using a Cloud HRMS by 2023.

The first step toward embracing HR automation is selecting a cloud-based HRMS. The choice depends on several factors like the size of the business, the industry vertical it operates, the business use cases where HR automation can create maximum value, and the company’s strategic vision. 

The best cloud based HR software provide free demos for organizations to examine the functionalities before zeroing in on the right solution. It is possible to start with a reasonably priced base plan and add more modules as per business requirements.

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Sukriti Saini

Sukriti Saini works as a content marketing strategist at HROne. She has done Bachelors in Journalism from Delhi University and carries several years of experience in content development. HR trends, Productivity, Performance and topics related to Employee Engagement garner most of her writing interest here. During leisure, she loves to write and talk about fashion, food & life.

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