Pros And Cons of a Cloud-based Human Resources Office


Cloud-based Human Resources (HR) is starting to make its mark in most companies in and around the world because of the need to improve efficiency, control cost, and an added layer of record security. This transformation is reshaping the way HR departments operate and has added to the strategic role HR plays in organizations.

Functions of an HR

To better understand these changes, it is best to have a benchmark of what HR does and how it plays into the whole organizational structure. In its simplest form, HR manages the needs of the workforce. Here are some of the job responsibilities that they have.

  • Sourcing talent for the company
  • Screening and recruiting potential candidates for employment
  • Onboarding and undertaking training for new-hires and even existing employees
  • Administering company benefits for the employees
  • Performance appraisal and management
  • Processing payroll
  • Terminating employment
  • Keeping the organization up to date with regulatory compliance

These are just some of the main duties of HR and even with these, it goes to show how critical their department is. In fact, a Deloitte study reveals that more companies regard HR as accountable for talent and business results. As HR  set their sights on productivity and workforce management, they also had to contend with the ever-changing technology. The role they play in managing demand for quality talent in the company has to meet modern technological developments. This is where cloud-based HR comes in.

What is a cloud-based  virtual HR office

Fortune shared in a recent an article that shares how large companies would slowly transition to a server-based system from a closed-off local system for their HR needs in the next half-decade. This is largely because technology drives these changes in an organization. It is not enough to make some digital adaptations. The landscape now dictates to be digital in approach in most aspects of the company.

As a result, HR now has cloud-based offices that not only mimics the functionalities of a traditional office. This on-demand service and software, which is sometimes referred to as Software as a service or SaaS, has transformed the way companies view their HR departments. Companies use cloud-based human capital management platforms or HCM from traditional internal servers.

Rather than having them work back office inside a company, businesses are now looking to use technology to outsource their HR services. This gives them the ability to keep up with the times and manage their workforce more efficiently with on-demand information and even analytics.

As HR takes on a digital journey, this has been happening since the turn of the 20th century. This has been a business move that initially looked into freeing up the department and giving them the platform to recommend and implement better workforce programs.

Pros and cons of a virtual HR

If a company is implementing a cloud-based HR office to align their business strategy with the workforce and organization, it should weigh the advantages and disadvantages. Here are some of the advantages of a cloud-based HR office.

Improved recruitment

Much like most HR functions, onboarding is a heavy data process that takes into consideration countless resumes, putting together schedules for an interview, managing feedback from that interview, and sending out job offers to candidates. Manual processes in the past were prone to errors and mix-ups. Cloud-based HR offices would employ a single tracking system that can make the process a lot more efficient. One reason for this is because information is only entered once and shared across the platform drastically reducing human error.

Increased employee satisfaction

There are some processes that a cloud server can make more efficient for employees. This can be in the form of timesheet submissions and even applications for leave. They can even put in updates on personal data such as change of residence or even phone number. This can then be rolled out into all platforms ensuring all data are up to date.

Brand Reputation

It might sound to aesthetic but telling the whole world that your company is ready and able to adapt to ever-changing times sends out a clear signal that you are a force to be reckoned with. Your ability to consider and implement technological changes not only prepares your company for the future but can also help you attract young and fresh talent.

Compliance across the board

One of the functions of HR is ensuring all processes and employees are compliant with all regulatory considerations. With this in mind, businesses can quickly disseminate information and access the same to ensure that their company is compliant with ever-changing regulations. This can be in the form of leaves given to employees or even changes in tax brackets.

Data security

There is no doubt that HR takes security very seriously. This is because they are safekeeping sensitive information about the entire workforce. It can be as simple as the personal background of employees. It could be more sensitive data like social security, salary, and even bank accounts. Cloud-based HR is built from the ground up to provide businesses layers upon layers of security. The security could be from encrypted data to limited access to employee information.


Taking on the services of a cloud-based HR office makes it cost effective for the simple reason that businesses are outsourcing the department. At the most, they do not have to maintain a large number of people just for HR functions. They are also able to do away with expensive IT requirements to implement and manage an in-house structure.

Here are some of the disadvantages of employing a cloud-based HR office.

Data privacy

As much as data security is a paramount benefit of SaaS, there is still the possibility of a data breach in a cloud server. Security has grown by leaps and bounds with all the encryption being applied to sensitive information that travels through the internet from the server to user. There are also access limitations that are given to different departments in any given organization. However, it is not impossible for hackers to use technology as well to intercept such confidential data.

Internet dependence

Cloud-based HR gives you the ability to access data anytime you need it regardless where you are on the planet. You can look into employee hiring while you are in a meeting downtown. You can also quickly check interview schedules for the week right before dinner. However, all these are reliant on a steady and secure internet service. If you happen to be in a place with poor connection, access to your data might be a bit more challenging. Not to mention that the computer or smartphone you are using needs to be able to handle the data you are trying to access.

Company integration

There will be some birth pains at the beginning especially if the company is using multiple providers. Another challenge is if their processes are heavily reliant on customized in-house computer programs. These programs might not automatically translate to the same services cloud-based HR offices provides and looking for the same functionality could mean expensive computer coding.

All in all, there are some big companies which have taken the leap to a cloud-based HR office. It is just a matter of looking into the vision of the organization and aligning that with what technology has to offer.

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