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The 6 Key Benefits of Cloud Based HR Software

Posted by Mathew French

18 October 2013

HR has seen much technological advancement in the past decade, but none more revolutionary than Software-as-a-Service (SaaS). It is therefore not surprising when Gartner predicts that the global SaaS market will grow from $13.5 billion in 2011 into a $32 billion industry by 2016 and Forrester Research claims that more HR managers tend to adopt cloud-based products almost exclusively.

We discussed the concept of SaaS in our previous blog. This blog will look into the benefits it offers to HR practitioners. Through our years of work on our HR software, we’ve seen first hand how SaaS has helped HR managers perform more efficiently and effectively. There are six key advantages:

1. Lower cost 

Globoforce outlines that in-house or custom solutions often require significant initial investments and a dedicated IT team to continuously manage it. And, innovation and scalability are not cost-efficient. With a SaaS or pay-as-you-go software, there is no need to businesses to make major capital investments on hardware, as all hardware are hosted by the provider. Additionally, the vendor will take care of maintenance and upgrades, resulting in low operating costs as well. Ultimately, SaaS has a low total cost of ownership (TCO) and will deliver a staggering reduction in cost.

2. Easy scalability 

With increasingly unstable economic times, businesses need to always be prepared for changes. Before SaaS, to cope with this, businesses had to purchase expensive hardware in anticipation of business growth and incur significant costs during economic downturn. The on-demand model allows organisations to add capacity during high workloads and remove capacity when the workload decreases, without any major cost changes involved, therefore allowing a business to quickly and easily adapt to changes in the economy. Deloitte indicates this will be especially beneficial for businesses with varied levels of workload and growth spikes triggered by acquisitions.

3. Greater efficiencies

We all know technological demands in businesses are high and with different functions requiring different technology, Globoforce points out that HR rarely becomes the priority. SaaS has emerged as the opportunity for businesses to leverage technology without draining those resources or adding costly overhead. For instance, with a true SaaS model, businesses can change application-processing workflows easily and effectively, without breaking the bank. They will improve the applicant’s user experience through testing and modifying the process according to the applicant’s job-search preferences. Additionally, the cloud-hosted aspect of SaaS ensures that you can access these applications from anywhere in the world through any device, as long as you have a working internet connection. Overall, the business’ brand is enhanced as applicants get a better experience. 

4. Simple integration 

Globoforce states that a well-design SaaS solution will integrate well with other common platforms, either through plug and play capabilities or via third party applications. This is a major step from proprietary systems where all changes require re-coding the application from scratch. SaaS allows for simple integration, since it resides in state-of-the-art data centres and does not require additional servers or installation of client server database and code. There are virtually no version control issues to deal with and it comes with turn-key API tools, making integration easy and seamless. 

5. Quick return on investment 

With SaaS, there is no hardware installation involved, therefore set up costs can be reduced up to 40% and implementation times are reduced just as much. Coupled with the simplicity in integration and the efficiencies it brings to your HR processes, SaaS will unquestionably yield greater returns on investment. Commonwealth Bank of Australia has already capitalised on this when ComputerWorld previously reported that their CIO traded in their on-premise application for a cloud-hosted solution and enjoyed an immense cost reduction. 

6. Environmental benefits 

Aside from obvious financial advantages, SaaS offers an additional benefit – reduced environmental footprint. On-premise applications for every business use their own set of resources, which affect the environment in one way or the other. With SaaS, providers house the data centres / servers and businesses share these resources, eliminating the need for businesses to employ additional resources. Ultimately, SaaS is the more environmentally friendly option than on-premise applications. 

From the above, it is clear that SaaS HR is a highly beneficial revolution for HR practitioners. The increased levels of adoption means more and more HR practitioners worldwide are leveraging SaaS in their quest to win the war for talent. When it comes down to it, HR managers like yourself need to take the necessary actions to keep up with the competition and have a fighting chance in winning that war.  

But you see, choosing the right SaaS vendor is no simple feat and will require an understanding of the crucial features essential in a solution. Tune in next week for our blog on the features to look out for when choosing a SaaS HR provider.

Topics: human resources analytics, hr system, hr recruitment software, hr software

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