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 alleviates these issues.
Read on to understand how cloud HR systems are outshining legacy systems and capturing the market.
What are cloud-based HR Software?
A cloud HR system is a centralized storage platform that offers highly secured virtual space for creating a repository of databases, easily accessible by employees, HRs, and other stakeholders of an organization.
This system allows easy management of HR functions from payroll to training sessions helping HRs to save time, cost, and resources.
Organizations can subscribe to these platforms by paying recurring licensing fees payable monthly or annually.
HR Cloud based solutions offer end-to-end automated HR processes, including recruitment, payroll software, onboarding, compliance, and more. It also offers reporting and HR analytics that help monitor employee performance and productivity.
History CheckHR management has come a long way from licensing proprietary HR software which was supposed to be hosted on the company’s servers to outsourcing HR functions to switch to cloud-based HRMS software. With technology advancements, trends of handling HR functions have transformed too.
Licensing proprietary software 
Outsourcing HR functions Cloud-based HRMS systemCloud HR Systems: Where does it fit in the new normal in the world of work?
“Work From Home” or ‘Hybrid Work Model’ is the new normal. It has, undoubtedly, become a mandate instead of being treated as an employee benefit under the employee value proposition umbrella.
The transition from “Work from Office” to “Remote Working” has, undoubtedly, been knee-jerk which brought a host of challenges in evolving markets as well as businesses.
Some of the biggest challenges HR executives faced in the new normal were:
- Tracking attendance
- Maintaining/improving engagement levels
- Effective communication
- Managing payroll
- Managing employee performance
Fortunately, all these HR challenges were slowly but steadily resolved with the right strategies and cognitive technologies. This in turn not just added value to the organizations but also facilitated employee satisfaction, reduced employee churn, and increased customer satisfaction.
Why is Cloud HR System important in the new normal?
During the lockdown, many employers were non-resilient and failed to provide business continuity to their customers. Organizations that were the worst hit were those that had not deployed technologies.
On the other hand, organizations that were already using technology solutions such as HR software were able to continue their operations digitally.
So, one lesson businesses learned in the new normal was to design an ecosystem that leverages the right technology that’s ready for not just the now but also for the unprecedented future of work
Some intelligent software is an exclusive fit for the new world of work resulting in a sales upsurge as such systems allowed HRs and managers to take care of every routine process from the comfort of their homes.
In the new normal, it empowered HR executives across India to carry out human resources processes in just a few clicks.
Advantages and Features of HRMS Software You Can’t Ignore!
Organizations are using technologically advanced tools to simplify their complicated processes, move closer to their customers, and boost their HRs’ productivity levels.
Automated systems such as HRMS, HCM, and HRIS are different software (often used interchangeably) designed to assist businesses in carrying out their routine operations efficiently.
Human resources management system or HRMS stands out with its exceptional features and benefits. If you have no idea about it, you are certainly in the right place now.
Advantages of HRMS Software
HRMS software improves employee engagement, manages employee lifecycle, boosts productivity, and much more of an organization.
Let us explore a few of the major advantages:
- Increases Productivity
- Time and Cost-Efficient
- Enhances Legal Compliance
- Minimize Mistakes
- Improves Communication
- Real-Time Monitoring
1. Increases Productivity
HRMS software does not require much human effort, unlike traditional tools. Since HRMS systems are fully automated, they perform time-consuming and manual processes independently. All you have to do is give commands and the software takes care of the rest. From data management to recruitment, HRMS streamlines every operation in a fraction of time.
Traditionally, registers and biometric machines were utilized to maintain the attendance of employees, before payday data was transferred in spreadsheets, and the salary was calculated and credited manually. With HRMS software, attendance can be marked on the pre-set attendance management system and salary gets auto-credited as per the policies and conditions defined by you in the system.
2. Saves Money
When it comes to investing in technology, every employer thinks twice before taking a step. This is because most of them think that implementing HRMS is a costly affair; however, it is not true. Today, one can find a system in any budget parameter, from high-end to free ones. Secondly, once a company has the right software in place, it can avoid those unnecessary expenses due to errors and non-compliance. All in all, HRMS software can save a lot of money for a business, be it small or large.
HRMS software lets organizations manage all human resource tasks in one system, reduces costs incurred in rectifying human errors, and minimizes the budget involved in managing the performance of the workforce in an organization. Thus, HRMS is a pocket-friendly solution irrespective of the size of the business.
3. Enhances Legal Compliance
Complying with laws and regulations is one of the biggest challenges for HRs. It may sound easy but only an HR manager knows the real struggle behind it. Fortunately, HRMS software solves this problem as well by safeguarding organizations against unexpected government updates and non-compliance risks by offering regular updates and automatically generated reports.
Top-notch HRMS systems in India such as HROne track the changes updated in tax slabs and new amendments on time. In addition, they even send notifications to HR professionals and higher authorities updating them the same. In essence, no more hefty penalties or severe lawsuits due to non-compliance.
Non-Registered Tax Compliances for Businesses set up in India
- Payment of periodic dues (GST Liability, TDS & TCS payment)
- Monthly/Quarterly GST Returns
- Quarterly TDS Returns
- Filing of Income Tax Returns (Tax will be payable at a flat rate of 30% plus Education Cess)
- Filing of Tax Audit Report
- Review performance regularly
4. Cuts Down Mistakes
Regardless of the size, errors can impact a business both financially and legally. That is why HR managers are expected to carry out each task with the utmost attention. But, amid managing a host of routine duties, they often miss out on important deadlines or make mistakes. This is when HRMS software comes into play!
As mentioned before, HRMS are end-to-end automated to avoid every possible error along the way. The common mistakes that occur during the screening of the job application process like calculating compensations and accruals, creating metrics and reports for analysis, etc. can be easily avoided with HRMS software.
“The more seriously you take your growth, the more seriously your employees and clients will take you.”
5. Improves Communication
Communication is the key to any organization. To set goals, check the progress of the project, know about the well-being of employees, coordinate among teams, and for other tasks, communication channels need to be channelized and easily accessible. Though there are many communication tools available in the online market, HRMS software solves the purpose more efficiently a more efficient manner.
In order to build a rewarding employee experience, you need to understand what matters most to your people.”
Julie Bevacqua
HRMS systems promote robust communication in the workplace both in offline and online models of the workplace.
When companies were working remotely after the global pandemic outbreak, HR managers and employees stayed connected and reached out to one another anytime, anywhere, and using any device using HRMS software.
Need to mention, features like employee directory helps employees, particularly the HRs to reach out to people without any delay/problem.
These are the major advantages of HRMS software implementation in an organization.
Features of HRMS Software
An effective HRMS software must have the following features:
- Ability to automate maximum HR processes, simplify human interactions and deliver actionable insights.
- Integrated modules for payroll, attendance, workforce, performance management, etc. to optimize and maximize outputs of an organization.
- Easily accessible by all the stakeholders( employees, managers, HRs, etc.) from anywhere, anytime, and on any operating system.
- Multiple actions like recruitment, onboarding, reminders and notifications, and more must be instantly handled in real-time.
- Highly adaptable with a simplistic user interface that can offer a customer-centric experience.
- Secure confidential data related to employee details, policies of the organization, structural hierarchy, and much more.
- Stay compliant with regulatory modifications in tax laws and updates, labor laws, and other related guidelines.
To summarize the above points:
- Maximum automation
- Integration with multiple modules
- Ease of accessibility
- High adaptability
- Secure confidential records
- Compliance Management
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.
#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 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.
#7 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.
#8 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.
#9 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.
#10 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.
#11 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.
#12 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.
#13 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.
#14 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.
#15 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.
Other benefits of HRMS software are:
- Centralized HR management system: Cloud-based HR software centralizes all the HR and employee data in one place, no matter the size of your business, small or big.
- Flexibility: Agility is one of the prime offerings of cloud HR software for small businesses. This adaptable hr software efficiently meets the needs of your growing business.
- Cost-Effective: Rather than relying on the traditional and expensive on-premise software system, organizations can choose budget-friendly cloud HR software service providers and reap the financial rewards.
- Saves Time: This type of software cuts down on administrative HR duties and helps manage much of these duties through automation. A real-time saver indeed.
- Mobile: Cloud HR software functions at peak performance and allows HRs and employees to perform more than 100+ HR functions using an HROne mobile app.
- Complete Control: Gives full control over accessibilities to help keep private information away from unwanted visitors.
- HR Analytics: HRs get in-depth data insights, which they can use for a detailed analysis.
- Compliance management: One of the most critical HR tasks is to stay up to date with HR and employment laws. HR cloud solutions make this simpler for human resource personnel.
- Scalability: A strong core offers immense flexibility to support the organization’s present and future expansion plans with easy configurations.
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.