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Why it May be Time to Move Your HR Technology to the Cloud


Recent research has suggested that up to 70 percent of HR leaders plan to replace their technology in the next two years. The platforms that most agree will supplant these legacy systems are stored on the Internet, in a secure "cloud," rather than on a local server.

Here's a closer look at the some of the differences between on-premise and cloud-based technologies and why some companies are choosing the latter for their core HR system.

Locally hosted systems

Cloud-based technology


Servers can be expensive to purchase and maintain, requiring dedicated, climate-controlled space and experienced IT staff to troubleshoot problems.

Cloud-based applications may help businesses control costs by minimizing hardware purchases, IT staff time, and large upfront software investments.


These platforms can be difficult to scale up or down should the number of individual licenses you need change.

Data storage and user access is easily scaled up or down depending on a company's usage needs. Changes can be made by migrating to a new data storage tier or adding on a specific module for increased functionality.

System upgrades

Locally hosted platforms may require extended system downtime and staff hours to deploy a new version, software patches, or server updates.

With cloud platforms, companies can more quickly and easily take advantage of enhanced functionality such as new features or the integration of services with specific mobile devices.


Many legacy systems don't offer the same flexibility as cloud technology for mobile access, and it can be harder for these systems to adapt to new hardware evolutions.

Users of cloud-based systems have the advantage of completing tasks or accessing information from any device connected to the Internet. Additionally, many of the challenges of administering software — from handling upgrades to dealing with user permissions — can be managed from anywhere.


Physical access to servers could potentially give hackers or other individuals access to proprietary and sensitive personal and financial data. Locally hosted servers could also potentially be at risk of fires, floods, or other natural disasters that could interrupt your business.

With cloud technology, system backups occur automatically, and everything is stored off-site on servers maintained by a data service center with a strong set of controls in place to protect the computer software and your data.

For business leaders who are considering updating their HCM software, now may be the right time to consider moving to the cloud. From cost savings to increased flexibility, cloud technologies offer advantages that can help you more easily achieve your HR goals and positively impact your business' bottom line.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.