When you’re considering moving your HR and payroll systems to the cloud, there are many different things to consider—from how much it will cost to whether or not the new system will be able to integrate with your current programs. With so many details to ponder, it can be difficult to get an accurate sense of whether cloud-based HR and payroll might be the right choice for your business. To help you get started on your research, we’ve compiled this list of seven of the most important factors you should consider before choosing a new cloud-based HR and payroll solution—and why each one matters.
When you think of scalable HR/payroll software, you might think of allocating resources in a way that enables growth, but there’s an added level of consideration when it comes to anything related to human resources. You have a lot more employees than just yourself or even your management team—you have everyone from entry-level workers all the way up to executives. And in a lot of organizations, change is inevitable: If your company grows, layoffs happen; if your company shrinks, new hires are made. Because human resources is constantly undergoing change in scale, keeping up with it means keeping pace with the technology that can adapt as well—and that’s where scalability becomes important.
2) Data Security
Moving sensitive data into the cloud is often a real concern for companies, but if done correctly it can actually offer far better protection than on-premise solutions. Cloud vendors are constantly monitored, have security teams reviewing threats, employ sophisticated encryption methods, and adopt multi-factor authentication—all of which can make your data safer in their hands than in your own. Make sure you’re working with a reputable vendor who knows how to handle your information appropriately. Asking how they protect sensitive employee data is always a good start.
3) Trusted Partner
Having a reliable partner can have many benefits, from getting off on a good start to dealing with daily changes. While doing your research, you’ll come across terms like managed services or outsourcing. In an ideal world, you'd hire a company that helps your business grow as it handles all of your back-office functions for you. If that's not possible—or even desirable—you could instead consider going with a partner service. Partners typically handle only one or two aspects of your business operations, such as payroll processing or employee onboarding, but they're typically more affordable than full-service providers.
4) Ease of use
The easier it is for employees to complete tasks, whether they're accessing time off or filling out their W2s, the better. While accounting may not be everyone's favorite part of the job, it's still an unavoidable necessity that you want your employees to be able to handle without feeling like they're taking on more work than necessary. With a cloud-based system, finding and completing tasks is often as simple as clicking a few buttons in a self-service portal. When ease of use isn't at play, clients can sometimes leverage chat functionality or even reach out directly by phone or email.
The cost of purchasing a software license, not to mention licensing updates every year, is significant. Cloud computing comes with a very small up-front fee. You pay on a monthly basis for everything you use. And while it may be more expensive on a monthly basis than some other solutions, it can save you money in big ways by removing your software license expenses from your budget. This frees up cash that can go toward growing your business! If you’re going to upgrade or change your system, it’s much easier when you aren’t locked into a multiyear deal.
6) Future Proof
Cloud systems are designed to be scalable, which means they can grow as your business does. When you’re first getting started, it might seem like overkill; but even if you’re not yet ready for major growth, having extra power is never a bad thing. Payroll is complicated enough without factoring in IT hurdles; give yourself some breathing room by ensuring that your system will accommodate further expansion. The more modules your system offers, too, the easier it will be to set up processes that work for you—and don’t require you to jump through hoops just because someone else thinks it's an efficient way of doing things.
7) Integration Options
Cloud-based payroll software is inherently more configurable than its on-premises counterparts. This makes it easier for them to integrate with other systems. If you choose a cloud solution, your options for integrating your existing systems will be greater because so many different vendors can connect easily to them. It’s a good idea, however, not to assume that any given vendor will fit seamlessly into an existing system without doing some careful research. You should also look at how quickly new versions of your chosen product are released – if they have regular updates then you shouldn’t be surprised if there are regular changes in their API as well.