7 Aspects You Need To Know Before Buying Cloud HR Software For Your Business
Thinking that you’re running a small or medium business doesn’t mean that you should not optimize your HR processes. We put together this essential guide to help you take the best choices when it comes to implementing a new digital HR solution within your company.
Small to medium-sized business managers tend to reject the idea of using HR Software, on financial grounds mainly. Or they just don’t see the necessity of such a system. Even so, HR Software can be a great asset when it’s accurately chosen and meets the particular demands of your business. It is definitely the next step you need to take if you want your company to succeed.
You are in the right place. These guides will provide you the essentials: what HR systems are, how can these improve your business’ activity and how to choose the Software that your organization needs.
Tip: Reports say that 73% of HR leaders consider “digital HR” an important trend¹ and that 57% of the companies plan to make a new HR software purchase in the following 18 months².
 Deloitte, Human Capital Trends
 SAP, $4.3 Billion War Talent
In this guide we will cover the following topics:
- Understanding what HR Software means and what are the differences between them
- Learning what are the benefits of such solutions for small and medium business
- The differences between On-Premise HR Software vs Cloud HR Software and why we recommend Cloud Software
- Features to look for when choosing the software
- Additional tips to consider before making the purchase decision
- Why you need to drive test the product
- Getting budget approval for the purchase
- Final remarks before making the purchase decisions
01. What means HR Software?
HR Software consists of all the systems designed to support you in managing human capital in businesses of all sizes. You may find that a lot of names and acronyms are used for this term:
- HR System,
- HRIS (Human Resources Information System),
- HRMS (Human Resources Management System),
- HCM Software (Human Capital Management Software).
However, we should divide the HR Software into 2 substantial groups:
- We first have the Traditional Core HR, which is the typical one, used for years in dealing with all the processes regarding payroll, employee records, benefits, attendance tracking, creating custom company policies and ensuring law compliance.
- On the other hand, we have the Strategic HR systems, that will help you focus on the recruiting and hiring, training, talent development, and succession planning.
02. Why HR software is great for small and medium business?
Why to change?
Even nowadays small and medium businesses are covered in a pile of paperwork, personnel files, and Excel spreadsheets. This is not a healthy perspective, neither for the HR staff nor for the managers. To blame is the old perception that HR Software is expensive — both as an investment and as a process of implementation. Luckily, this is no more the case.
It is expensive?
You will find the HR Software available at reasonable prices. You can find free HR solutions for small business. Organizations that lack dedicated HR staff to deal with various HR operations, can rely on a new digital assistant to help them with all the boring work.
It is difficult to setup?
HR software is not difficult to deploy or use, and it helps you to focus better on growing the business and removes the bureaucratic processes while keeping all inputs compliant and consistent. Bring accuracy, efficiency and measurable results in your business when dealing with HR management.
It is better than Excel?
Definitly. If you want to stick to Excel, please stop reading this. Otherwise we put toghether an in-detail guide with 10 Reasons to Switch from Managing Employee Leaves with Excel Spreadsheets to a Cloud Time Off Management System. By the way when was the last time when you got an email from Excel reminding you about a colleague vacation?
Remember. There are differences in the needs of various businesses types and sizes. In which group do you fit: Startup / Small company / Fast growing companies / Established mid-sized business / Large multi-sited business / International corporation / Non-for profit organization / Government agency?
Benefits and advantages of switching to HR software
You and your team will benefit from an impressive set of HR software advantages such as:
- Reduced workload
HR Software comes with a higher level of productivity — the automated processes will streamline your business, by cutting down on the time spent with basic administrative tasks. No more manual entries!
- More efficiency in making decisions
You and your employees will have one central point where all HR data can be found. The HR department and the managers will be able to generate reports, spot patterns in attendance and keep track of all the skills the employee have.
- More engaged and satisfied employees
This year employees are all in for the digital HR experiences! So they will feel more appreciated and involved if a self-service functionality will allow them to update their personal information, request a leave or check HR policies with few clicks or taps on the smartphone.
- Reduced risk regarding security
Since you won’t be working with paper anymore, HR data will be located in one place secure in the cloud, with daily backup, therefore more protected. Human error is hard to occur.
- Measurable ROI
The equation time + effort/costs might be one difficult to understand, however after your HR gets digital, the HR tasks will be automated and the time invested into them will be radically diminished. HR professionals will be able to re-allocate their focus on valuable work, delivering on business goals and concentrate on strategic outcomes.
- Savings with IT support
With cloud solutions, the in-house hardware and support costs can be reduced as the burden is taken on by the provider.
Professional hosting providers, encryption and backup procedures, are put in place so that data is far more secure than internally hosted data. Think about a laptop that can be lost in a train.
- Automatic updates
The vendor takes place of keeping your application constantly updated with the latest modules and so that you benefit of the last version without having to deal with upgrading cycles.
- A centralized hub for all HR data
Get all the employee data in one place. Get rid of duplicate entries. Retrieve data for payroll in clicks.
Your communication is simplified, with automatic messages sent every time a request is sent or accepted. Your Google/Outlook calendar gets a new input if you book a day off. Signing in with Outlook saves additional time.
You and your workforce can take decisions on the go about time and attendance.
Tip: Most vendors charge per user, and the rates vary depending on the number of features your organization requires.
03. On-Premise HR Software vs Cloud HR Software
Now that you see all the good HR software can do, let’s check which one should you choose, in technical terms: On-Premise HR Software or Cloud HR Software? The first one is installed on computers and the second is accessed online. Either is extremely better than using paper, but let’s check out the advantages and disadvantages for both.
On-Premise HR Software will provide an increased level of control of your data since you will be storing all of it on your own physical computers. Another feature that may come in handy is the ability of this type of software is can be customized by the vendor according to every company’s needs.
Unfortunately, there are quite a few downsides: the cost, obviously — you will pay for the entire amount of the software, so as to be able to install it on all the computers. The ongoing costs will also be considerable — the internal IT department will be in charge of solving any technical problems emerging and you will be accountable for a usual fee, for the license. The on-premise software takes a lot of time to be installed and implemented.
Cloud HR Software is our favorite. This type of deployment has substantially fewer flaws. When purchasing one, you will have no equipment to install and no complicated training needed for the employees. The cost of entry is not high, you will pay a monthly sum based on the kit you choose.
What is cloud computing?
According to Microsoft³, cloud computing is the delivery of computing services — servers, storage, databases, networking, software, analytics, intelligence and more. All these over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale.
 Microsoft, What is cloud computing? A beginners guide.
What is Software as a service (SaaS)
Software as a service is a method for delivering software applications over the Internet, on demand and typically on a subscription basis. With SaaS, cloud providers host and manage the software application and underlying infrastructure and handle any maintenance, like software upgrades and security patching. Users connect to the application over the Internet, usually with a web browser on their phone, tablet or PC.
Here are five additional advantages of cloud-based solutions.
- Cost savings
Over a period of 12–18 months, you will see a considerable return in time saved which represents a considerable return on investment — as the hours of work of your employees are valuable.
- Confidential data is now secure
Your data is very secure and you can forget about your internal IT guy — the provider is responsible for the software’s maintenance now.
- Easy access from anywhere
Maybe the greater benefit is being able to access it from everywhere, as long as you have an Internet connection. So this is where a disadvantage can be spotted: no Internet, no access to the HR system.
You will be able to grant access to multiple people without purchasing multiple software copies or servers, customize the access levels and become part of the HR excellence club.
- Faster, and less expensive implementation
When it comes to the transition from traditional means to digital, the implementation takes practically minutes, and the company will benefit from continuous innovations without extra costs.
Tip: Nearly 40% of businesses have moved their core applications to the cloud already, with a third of the remainder planning to migrate over the next 12–18 months, according to the Fourth Annual HR Technology Survey by PWC.
04. Research the HR Software features your business need
Before starting the actual search for the HR Software, by researching vendors and products, you are better off taking a step back. Evaluate your current status by asking what do you have in your organization. Then decide what is the desired status or in what way do you need in order to streamline the entire organization.
Do not get excited with systems that have a lot of functions, if your business does not actually need those. Here are the most important features you need to consider in your quest:
- Employee Self-Service. The function that employees will love — it allows them to make all kind of requests, to check approvals and to update their personal data.
- Time-off Management. Crucial for keeping track of paid leave, unpaid, sick leave or TOIL.
- Analysis reports. Useful for HR staff and managers
- Company Policy Management
- Employee Record-keeping
There are providers that will give all of them in one suite, however, there are others that will be more modern, dynamic, easy to use that will be able to provide you only one of this modules.
Additionally, as the company is growing you might be interested to look after such as Payroll, Benefits, Hiring workforce (Applicant tracking systems), Talent management, Engagement, Performance management and Training solutions for your company.
Tip: You should aim at working with a vendor that is offering the features that your business most need. Although your business has limited resources, investing in HR solutions will always have a good return on investment.
05. Ten additional tips to consider before making the purchase decision decision
After you understand what are the differences between different HR products, and revealing the features you need to look for in your search for an HR system, we want to also offer some more tips for this difficult job. Let’s see how can you pick the right HR Software. Find below the 10 points to have in consideration when you’re deciding on the software:
- Is it user-friendly?
If the product is fast, easy to use, has a simple interface it will be easy to be adopted by the employees and will instantly be a time saver. If the interface is complicated and has a lot of distractions, most probably you review your decision.
- Does it have the features you really need?
Reflect on what are the needs in your business. The next step is to reflect where would you like to optimize and improve the HR processes, without getting more work than needed.
- Can employees self-serve?
An important aspect to consider is if the product is able to empower any staff member with access to their HR activities. Getting more engagement in a quick and easy way anytime, anywhere is a must in modern organizations. Putting the employee data at their fingertips will definitely help you get happy peers.
- Will this system help me to reduce business risks?
Think about the fact that once your company ensures that all employees data stays accurate, and all the processes need to go through the same compliance validation, you remove a lot of human errors. Additionally what you do if your laptop with the excel spreadsheets gets lost in a train?
- Does the solution save time?
The system must reduce the production period and save time, in order for you to focus on strategic matters. Ask the vendor to provide share with you what updates are in the roadmap and what has been improved in the last months. You want to work with a dynamic vendor, that is striving to offer delightful experiences for the human capital.
- Will this product reduce costs in my business?
The new acquisition has several financial implications. This is why you must reflect on the following budgetary aspects:
a. Initial costs,
b. Operating costs,
c. Time period
d. Annual savings.
For the last one think how much does it cost an hour of work of your HR personnel and how many hours such HR solutions are saving monthly.
- Will the employee data be secure?
Having the employee data secured in a safe and secure place, protected and encrypted is a must. Have you done a security test to the vendor of choice?
- Can I benefit from dynamic reporting?
Smart business relies on making decisions quickly based on data. Managers, Admins, HR, Finance teams improve their operations based on them.
- Will this be running in the cloud or on-premise?
We definitely recommend cloud HR software, however, if your company is bigger than 250 employees, you might consider on-premise licensing.
- Does the solution be able to adjust according to our policies?
Companies differ by country, by industry. You need a provider that can customize the software according to the policies, processes, behaviors, and legislation. This one is a punch in a face to many solutions as flexibility is not easy to facilitate.
Tip: We really want our customers to take strategic decisions. You will not switch the software every two weeks. Investing in the due diligence for your research will pay off.
06. Try the product first
After taking into consideration all the above, there is only one move left to make before actually purchasing the HR Software: book a demo. It is crucial to be able to see if that particular system fits like a glove for your business because theory and practice are not the same — your research could have come up with a “winner” vendor, but practice may show you were wrong. So a demo is a key — usually demos are free of charge, therefore in case the HR system is not the one for you, no money will be spent.
There are vendors, like LeaveBoard where you can trial of the solution. They also help you with onboarding your team and configuring the policies. This is a great way to check how the product fits your organization needs before you buy. Eliminate all risks before you make the purchase decision.
Tip: After you did your demos, and tested the systems, the decision is yours to choose the right HR software for your fast-growing business.
07. Getting budget approval for the purchase
In the end, do not forget that purchasing HR software is not beneficial only for the people department. It speaks to a much greater purpose: making the business more productive, spotting and eradicating the fields of waste and offering your employees a chance to increase their motivation and to feel appreciated.
Don’t see this investment as an opportunity for cost reductions, but also as one for increased business efficiency and success.
Getting budget approval from the financial department can be tough. Therefore, you will need to make the research so that you will be able to address the following questions:
- What this product is?
- Why does the company need it?
- On what basis did you choose the supplier?
- How well are security aspects covered?
- What is the cost?
Tip: Selecting a yearly package will bring you a substantial discount.
How to make your case to your team?
- First, you have to prove that this HR Software is totally in accordance with your company’s aims: short and long term.
- Second, do not aim for something too complex or overpriced for your organization. For example, if your employees do not travel for business more than 2 times a year, it would be reckless to choose a software that offers a travel-planning function.
Here is a quick checklist that you could share with the purchasing decision maker to simplify your interaction:
- This software will save our company time and money
- The decision to select this software was done after a thorough analysis
- The software is user-friendly and can be accessed at any time
- The cloud-based product will simplify internal communication
- Regarding features, this HR system provided the main functionality for our business to run smoothly
- The investment will result in fewer errors in administration
- The solution will help our managers to take better decisions
- This software will make our data safer
- The implementation is smooth, and the support team is active and helpful
Showcase facts and figures, financial directors are all about figures. If you are convincing, if you have solid evidence and can provide valid arguments, switching to digital HR might be easier than you think.
Moreover, fixate on the imperative aspects of your presentation. Otherwise, this purchase could be stalled, for reasons of prioritizing — other departments may be considered in more need for money than the HR department. Last, but not least, you need to include in this process everyone who has even the minimal influence in approving the budget, even if at first they do not seem directly affected in procuring the new HR software.
Tip: If you are not sure about any of above mentioned aspects, we recommend that you double check them with your HR software provider. After you get the approval, your manager will also use the product - so be very clear on why this is a great option for the company.
With these aspects in mind, you will be prepared to make the perfect decision and also to get budget approval for it. Take the time to do the research regarding the HR software that fits your business size needs.
Ask the right questions and decide once you’re confident that you found the software that it’s right for you and this is the investment decision that you need to make so that your business grows and your people enjoy using it.
Congratulations! Now you have an arsenal of tips and ideas to make an excellent business decision. Nevertheless, you don’t just buy software. You get a partner to help you succeed with your HR goals.
To recap. Here is the process of choosing an HR product:
1. Identify what are the objectives of going digital with HR
2. Define what you want to do with the HR System
3. Make an analysis of the solutions available in the market
4. Go for the trials & get demo
5. Measure twice cut once.
Want to find out more?
At LeaveBoard, we are on a mission to make everyone’s life easier: HR specialist, managers, and employees. We simplify HR management across the world for small and medium companies. Forget about time-consuming procedures and Excel spreadsheets. We optimize your HR activities through our smart HR software: Leave Management, Self-Service, Accurate HR reports, Slack Integration and Employee Directory and Records. Register or get a demo today and experience the future of digital HR.