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Cloud HCM Software & Solutions: Tips for Getting Started

hcm software shown on a computer and phone

More and more businesses are exploring the option and determining if moving to an Human Capital Management cloud solution is right for them. It's an important decision. Choosing and implementing a cloud HCM solution can have far-reaching effects for everyone in your business. Before taking the leap it's crucial for employers and business owners to understand what exactly is cloud-based HCM software along with key considerations that will help them make the best, long-term choice for their business and employees.

What is cloud-based HCM software?

At its core, HCM is a general term that references the tools and operations a business uses to systematically oversee recruiting, hiring, management, and performance. HCM software is the foundation for executing these tasks. To understand the value of what is cloud HCM, one simply needs to compare it to conventional HCM software, which requires purchasing the software, investing in computers powerful enough to support it, hiring qualified individuals to install and maintain it, and giving HR staff enough time to manually enter and update information; an act that increases the opportunity for human error. In contrast, what is cloud-based HCM solutions? Cloud HCM software refers to on-demand availability of HR-related resources with information primarily stored in a centralized data center. For businesses,  HCM cloud solutions support the ability to:

  • Increase employee access and participation with on-demand access from any location and any connected device;
  • Improve employee morale by making their lives easier with on-demand access;
  • Reduce expenses through a streamlined infrastructure; and
  • Provide a centralized database that's especially helpful for companies with remote locations.

What should be considered when switching to a cloud-based HCM?

There are several considerations to keep in mind as you weigh your options about switching to cloud-based HCM solutions. While the benefits described above are compelling, employers need to be aware that HCM cloud-based systems can sometimes prove costly to some businesses in the short-term. For instance, implementation can uncover issues related to data security requiring appropriate safeguards be installed. Or there may be obstacles caused by a lack of compatibility with a company's existing software systems which can lead to inefficiencies, errors, and frustration before being resolved.

Progress always requires a certain amount of effort. If you determine that your current system is outdated and needs replacing, here are three considerations to keep in mind when choosing your cloud HCM solution.

1. Start with a roadmap

Opting for an HCM cloud solution involves more than pulling the plug on your obsolete HR system. Ideal cloud-based systems are all encompassing and capable of addressing an array of perennial HCM and HR challenges. They offer features ranging from mobile apps to encourage on-demand employee use to advanced analytical tools for management purposes. Developing an in-depth roadmap can offer a clear route from where your business is today to where you wish to be tomorrow.

2. Determine what problems you wish to fix

Part of your roadmap should pinpoint the current challenges you wish to address as well as articulate issues of concern as your business looks ahead. Do you want to increase employee engagement in their HR-related issues? Provide ease-of-use as an additional benefit to staff? Reduce burden on current HR employees? Have access to employee statistics and reports for data-based decision-making? Problems vary from business to business, but lack of efficiency, overly complex processes, and/or technology that employees either can't or don't wish to use tend to be common denominators. Identifying these difficulties and what you hope to accomplish by fixing them helps narrow the criteria by which you'll select a cloud-computing vendor to meet your HCM needs while increasing the odds that you will be satisfied with the long-term outcome.

3. Embrace the "single employee record" approach

There can be an overwhelming volume of information that is required during the recruiting process or when a new employee joins your company (contact information, background checks, skill sets, security, benefits, taxes, employee classification, etc.). What's truly valuable about a cloud-based HCM solution is that it integrates HR functions into a comprehensive HCM platform with a single employee record. Benefits include:

  • Reduction in manual data entry and time-consuming administrative tasks.
  • Functions smoothly interact with one another.
  • A similar user interface covers all functions, dramatically reducing training costs.

As a result, employees can use self-service to update their personal information as needed at their convenience, while managers and executives have access to this data when making key business decisions that affect employees throughout the organization. Information is more accurate, up-to-date, secure, and available on-demand.

How to choose a cloud-based HCM vendor

Fortunately for businesses, many cloud-based HCM systems offer similar features. Employers should drill down with vendors to better understand their differentiators to best determine a final selection. The key is finding simple, usable technology that can drive the efficiency of your enterprise. Any system that's too complicated or cumbersome for employees at all levels of the organization to use is unlikely to meet your needs.

Other key cloud HCM vendor selection criteria include:

  • A demonstrated track record of experience and reliability in cloud-computing implementation.
  • The capacity to provide a scalable cloud-based HCM system where modifications can be made as needed.
  • Ability to offer a separate mobile application to accompany their software, thereby expanding ways to interact with software.
  • An inclusive application that is well-designed and intuitively easy to use so as not to create a barrier of accessibility to some employees.
  • Quality of customer service, including extended support services hours, availability, and easy access to speak to a helpful customer support person.
  • High-grade system security with strong data protection solutions (encryption, authentication, etc.) that protects against data breaches and business interruptions.

Just as you would check references before hiring an employee for their services, it's also a good idea to ask for and check a vendor's references. Ask for recommendations from other businesses similar to yours in size and industry. Also, ask any vendor prospects for specific examples of how they handled challenges that arose with clients whose businesses are comparable to yours.


Choosing and implementing a cloud-based HCM solution can have far-reaching effects for everyone in your business. Instead of wondering what is a HCM cloud system and if it's right for your business, using a roadmap to assess your needs and identifying vendor differentiators will help you make the best choice. When you get it right, you'll see both short- and long-term benefits in efficiency, cost savings, better tools for decision-making, and improved employee engagement and morale.

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* Este contenido es solo para fines educativos, no tiene por objeto proporcionar asesoría jurídica específica y no debe utilizarse en sustitución de la asesoría jurídica de un abogado u otro profesional calificado. Es posible que la información no refleje los cambios más recientes en la legislación, la cual podrá modificarse sin previo aviso y no se garantiza que esté completa, correcta o actualizada.

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