I recently came across a 2016 study, which outlined some of the more grim statistics suggesting that the majority of companies using HR systems aren’t happy with the results.

A whopping 76% reported that only occasionally, rarely or never were they seeing a positive impact from the use of their chosen HR software system. What does this tell us about the systems we’re currently employing, that profess to cut costs and free up time? Are businesses seeing a return on investment at all?

Let’s look closer at the stats.

Cloud HR users are more likely to feel their needs are understood

According to the study, 66% of companies using cloud HR systems feel their needs are always or frequently understood by their providers, with only 5% feeling their needs are rarely or never understood. This statistic is hugely comparable with those companies that use on-premise systems – only 39% feel that their needs are always or frequently understood, and 35% feel that they are rarely understood, or never understood at all.

Cloud HR users experience better customer service

Similar stats appeared for customer service levels – 63% of Cloud HR users reported always or frequently receiving great service, whereas only 22% of on-premise HR system users reported the same. This can largely be attributed to the ease of which cloud HR providers can update their systems to fit the needs of customers, as well as allowing them to raise a ticket if they have any issues. Updating privately hosted systems is a much heavier-duty task – as well as a costly one, as most on-premise HR providers charge upgrade fees.

Cloud HR solutions provide a significantly higher quality user experience

According to the study, HR cloud solutions are twice as likely to always or frequently exceed user expectations. This is likely to do with the constant updates and changes which allow users to experience different functions and even request new ones.

How often do HR systems have a positive impact?

Cloud HR systems lead the way in terms of having a positive impact on companies – but only marginally in comparison with privately hosted and on-premise systems.

One possible explanation for this is the fact that 66% of organisations that took part in the study had over 5000 employees. Only 11% were from companies with 1-1000 employees. Often the task of managing employee data, absences and performance becomes much more difficult the larger the company is – no matter how robust your HR system is.

Perhaps if the study was sectioned down further, we could see which size organisation benefited more from HR software systems, and we may see that smaller businesses are seeing a much larger positive impact from cloud HR solutions.

New cheese is better cheese – sometimes

Another interesting read I enjoyed lately was this article by Daniel Staley – he compares the story from the book ‘Who Moved My Cheese’ with the migration of HR to the cloud.

His argument is thus: the sooner you let go of the old, the faster you’re likely to get to the new, and the better (in our case, software, and in the story’s case, cheese). In effect, we can consider on-premise solutions to be the HR equivalent of an ASDA block of cheddar. The best cloud HR systems are like a baked camembert.

But – yes, there is a but – not all cloud HR solutions deliver good results!

Some lack the capability and customizable features you are likely to need to see any kind of positive impact. In-depth research of the HR marketplace is imperative to success in this regard. Source the best solution for you, as many rely on simplicity and aesthetic appeal over functionality (see our article on ‘simple, easy to use’ HR systems)

One thing we know for sure – companies still employing on-premise HR solutions need to take the time to research cloud HR and the benefits it could bring, in comparison with their current systems.

Check out the Youmanage blog for similar articles.

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