By Andie Burjek
Sep. 15, 2020
While cloud-based human resources applications are now the standard for new buyers, many organizations still use on-premise systems, according to Sierra-Cedar’s “2019-20 HR Systems Survey.”
The report noted that 40 percent of organizations still use at least one on-premise HR application, and that number is decreasing at a relatively slow rate. Meanwhile, 70 percent of organizations use at least one cloud HR system, the report stated.
Organizations that aren’t investing in cloud workforce management systems may be missing out on many advantages.
“If you’re not in the cloud right now or if you’re not on the path to the cloud, then you are considerably behind,” said Wilson Silva, senior vice president of outsourcing at Alight Solutions. “You’re missing out on the opportunity for many workplace benefits.”
Simplify the data entry process
Typically with a cloud workforce management system, a big benefit is that organizations just have to deal with one source of information, Silva said. A manager could enter a data element in one place, and that can be considered for multiple processes. They don’t need to use several competing platforms and make sure they are all in sync with the correct shared information.
A united platform allows managers to be more efficient with data entry and focus on the quality of data entry rather than the amount of time it takes to sync up multiple platforms with the same data, he added.
More frequent updates
Most cloud-based workforce management systems come with automatic updates multiple times a year, unlike older types of workforce management platforms for which organizations must wait a year or more for more hands-on updates, Silva said.
Anything that allows you to adopt new functionality and apply it in a timely manner is a strong benefit for any organization, he added.
Compliance with new laws
While cloud-based software can’t do all the compliance work for a manager, it can make their job much easier, Silva said. For example, with payroll, cloud workforce management systems can consider tax rates of different geographies. And the cloud allows companies to more quickly address legislative changes.
The ongoing update piece of this also allows companies to feel comfortable that they are on the same page as competitors, said Jake Soliman, vice president of cloud services solutions at Alight Solutions. They have access to the same functions and features as others.
Given this standardization of much of the workforce management process, organizations can more easily benchmark themselves against their competitors and see where they stand.
”This is what the software delivers. ‘This is the best practice for 90 percent plus. Let’s use it as our benchmark and use it for a more standardized process.’ It can be that driving engine behind helping HR to be as efficient and standardized across the globe as they can,” he said.
Easing the workload of your workforce
The cloud essentially allows organizations to offload infrastructure onto a third party, Soliman said. The costs, resources, time and expertise that in-house IT or HR departments used to save for maintaining a workforce management system can now be used for something else.
“You get out of what might not be a core competency for your organization, and are able to move that into a company that specializes in that delivery. It’s a cost save and a resource save as well,” he said.
Better data security
While some people might worry about the safety of their information in the cloud, the reality is that for cloud workforce management systems, data security is usually better than the old way of doing things, Soliman said.
“Do your due diligence and put your security team on it, and I think you will be pleasantly surprised that their standards are more likely than not better than what you’re running now,” he said. For cloud based systems, he added, “they all understand their business is predicated on data security, and one breach could be catastrophic to their organization. So their budget and their attention to controls are above and beyond what most would do on their own.”
There’s always the implication that “outside my network” means “not safe,” but that’s just not true, Silva said.
“It is possible to have your data outside of your network or in the cloud and it is just as safe if not safer for them as when it was in your network,” he added. “Where you find potential for breaches is when the data is when somebody is handling data outside the cloud or passing spreadsheets around.”
Rely on the experts
For the customer who hasn’t moved on to the cloud yet, there’s no need to do the switch alone, Soliman said.
“Having the in-house resources can be daunting, but having a partner help build that design and run it is becoming much more commonplace,” he added.
Having someone who has expertise in deployment is critical, Silva said. Whether an organization chooses to rely on the vendor’s expertise, there are many consultancies that also help clients maneuver the cloud because learning a new software takes time, he added.
“It’s not just a data entry system. It’s a transactional system, and understanding the configuration and workflow that goes with it is sometimes harder than it may seem,” he said. “If people view that an HR or payroll system is simply ‘You just enter data in,’ I think they find out pretty quickly that’s not the case. The skill set around it is a whole lot more challenging.
“So get some help,” he added. “It’ll make your project way more successful.”
The future of the cloud
Wilson noted that there is a level of maturity in the cloud software marketplace now. Large players have either through acquisitions or in-house developments created comprehensive services that offer everything including HCM, payroll, compensation, time tracking, performance and recruiting. But now rather than building out their product offerings they’re moving on to analytics and benchmarking.
The question software companies are seeking to answer is, “How do you leverage the data that companies input to give them analytics on how to drive performance?” Wilson said. How can analytics help drive value through data companies already have?
The next direction he sees things going is benchmarking, he added.
“It’s not just about the ability to let customers utilize data, but the question now is, ‘I have this metric or insight. But is this good or bad?’ ” he said. Cloud systems can allow companies to compare themselves to what competitors are doing. An organization can assess “if I’m doing well or not based upon what other companies have the ability to do.”
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