Finding the right HR management system or HRMS can be tricky, since not every business has the same requirements. That does bring the question, which option is ideal in your situation? Normally, you have cloud HRMS and on-premise HRMS, each with their own pros and cons. Let’s find out why each one could be the better option, and when is it something to focus on.
What is on-premise HRMS?
As the name suggests, the on-premise HRMS is hosted on the company servers. That’s helpful because not all companies are ok with data being shared or hosted outside of their business. And because of that, it involves additional costs. That’s because you will have to invest in the HRMS solution and installation upfront. On top of that, it can take a while to set it all up, test and ensure it’s all going the way you expect.
With that in mind, you can use on-premise HRMS as a way to avoid subscription fees. The ability to limit access to specific people also comes in handy. You can provide remote work capabilities, but the restrictions brought by on-premise solutions does make them extremely good and overall impressive to say the least.
What is cloud-based HRMS?
In this case, you use a cloud provider to host the data and HRMS solution. What makes cloud systems like this great is the fact that you don’t have to worry about being on-premise to access data. You can literally be anywhere in the world, as long as you have credentials, you can access everything without a problem. That kind of flexibility is not allowed if you use on-premise solutions. But it’s still a great idea to consider, especially in the long term. Just make sure that everything gets implemented properly, and you will be amazed with the value.
Another thing to note about cloud-based HRMS is the fact that it usually comes with a subscription system. You will always know how much you need to pay every month. On top of that, you don’t have to manually perform system updates. Everything is handled in the cloud by the provider. Plus, all data and info is kept in the cloud, something that will be extremely useful.
You should also keep in mind that cloud HRMS solutions tend to have very good security. You can also have more customization options and features, which can be a game changer. In the end, it’s all about knowing how to implement everything and handling that the right way can make a huge difference.
How can you choose the right HRMS solution?
Compliance
Ideally, you want to ensure that the HRMS solution is fully compliant with the latest regulations. We think that cloud based HRMS is good for companies that have limited IT resources and a small budget, but also businesses that want to scale and which are ok with the subscription system.
Then we have on-premise HRMS which is good for companies which have security concerns and want to keep all data and info on-site. Being on-site also means you have more customization and a team of experts to handle and manage the HRMS system.
Ease of use
Generally, cloud systems are easier to use because they are ready to go. With on-site stuff, you have more control, but that also means you need a team of experts to help you with maintenance, setup and updates, all of which can prove to be extremely challenging.
Security
What’s important to note here is that both solutions offer great security options. With on-premise you always have great control and you can implement your security systems that you’re interested in. Then again, cloud systems also do that, so it’s up to personal preference to make the right choice.
Scalability
If scaling is a concern or something you consider, then a great idea in this situation is to think about cloud systems. You’re using external resources and those are meant to scale, in case you need them. With on-premise HRMS, you will have to perform infrastructure upgrades and those can become very costly.
IT resources
Again, here you have cloud systems that prove to be better, because you don’t need a dedicated IT team to manage and upgrade or maintain the HRMS. But if you keep everything on-premise, you need a team to tackle that, and it’s going to become very expensive.
Conclusion
Both on-premise and cloud-based HRMS can be great, but it depends on where you want to use them and what results you expect. Smaller companies and those focused on scaling their business should consider cloud systems, because they are less expensive and with predictable costs. Then again, on-premise can be a solution too, especially if you already have a large IT department and want physical control. There’s no wrong option, however based on your company’s requirements, you will fall in one of the two categories depending on your needs!
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