Human Resources

Pros and Cons of Using The Cloud in HR

Hey Compliance Warriors!

Storing information in the cloud is very prevelant this day and age. There are always pros and cons that come along with these tools though. Take look at this article to see how it can help or hinder us in our industry. Read on…

Article via: www.effortlesshr.com

Growth in technology is leading to an explosion in efficiency. According to the McKinsey Global Institute, organizations in which all employees are connected through technology, productivity increases by 20%. All departments across an organization are getting smarter and more productive. HR professionals have been experiencing this growth as well, but the perks of technology are also causing some problems. Let’s take a look into how technology is changing the field of HR for the better and some of the potential problems that come with those changes. Human Resources is an integral part of any organization, and if the technologies available today are implanted correctly, they can help drive employee morale and production.


Cloud Computing

Arguably the biggest technological change in HR has come in the form of cloud computing; more specifically, the host of applications being offered to HR professionals. Using cloud-based applications to manage your organization’s employee benefit programs allows HR personnel and employees alike to access their information anytime, anywhere. Employees can easily log in from home computers or mobile devices to request or approve time-off requests. They can make changes to mailing addresses or other personal information. Employees can easily load and print paperwork for taxes and other financial needs. They can log into a portal to easily access benefits like remaining PTO hours or total contributions to their 401k.

The HR department is becoming more and more important to the overall value of a business. In a recent survey of over 500 HR professionals, TotalJobs found that 21.8% of an HR’s time is spent with Executive Leadership. Executives and other leaders can study the habits of highly productive individuals and extrapolate from the data set to what sets them apart. Once these strategies have been identified, they can begin training others to manage their time in a similar way to increase overall productivity.

Beyond HR, switching to cloud-based systems opens up major opportunities for the entire company. The cloud guru himself, Mark Hurd of Oracle, has stated that 80% of IT budgets go towards maintaining existing networks instead of innovation. Moving systems like HR software and other applications to the cloud allows companies to leave costly data centers behind and reinvest that money into innovation and other production channels.

For larger companies, especially those with multiple offices, onboarding new hires can be a huge problem. It can be difficult to communicate what information needs to be disseminated to all new hires and they ways in which that information needs to be delivered. Cloud-based HR applications allow new hires to log in and check off tasks as they are completed and mark off information once they’ve learned it. HR teams in the home office can monitor new hire onboarding anywhere in the world.

Big Data

When an entire organization utilizes a comprehensive HR system in the cloud, vast amounts of data quickly accumulates. Systems like EffortlessHR, ADP etc., not only allow you to manage all your HR needs, but they create easily accessible reports to help businesses become more efficient. HR professionals can implement time-tracking systems to see how employees are spending their days. Predictive analytics can then measure where inefficiencies exist within the organization. This allows decision makers to adjust teams/priorities on the fly to maximize output.

Potential Problems:

Big Brother

With an increase in data collection and 24-hour access to that data once you’ve migrated to the cloud, employees can begin to feel like their privacy is shrinking away. This can lead to morale problems among the workforce. When employees feel like they are always being watched they are less likely to take risks, leading to less creativity.

A stricter application of time management combined with low flexibility can lead to significant talent loss. If management starts commenting to employees on an hour or half hour they felt was “mis-allocated”, that employee will feel micromanaged. Marcel Schwantes of Inc. has written that Micro-management ultimately boils down to control issues, and lack of trust. He states in this article that “micromanaging ultimately derails your team’s motivation and creativity.” Top talent does not respond well to micro management. They deserve to be trusted and micro-management communicates a lack of trust from management.

The data collected by these cloud-based HR applications can be incredibly useful, but standard management lessons still apply. According to the US Bureau of Labor Statistics, employees stay in a job for around 4 years. Retention is hard, but we want our best employees to stay much longer than that. Use the data to draw higher level insights in order to make departments more efficient rather than micromanaging employees.

Tech Gaps

Realistically, technology can’t track everything.  This is a good thing though. The more reliant on technology HR departments become, the more data can override nuanced decision-making and personal relationships. Employment decisions can be made for individuals based on factors that make sense to a computer but would never be made by an HR professional. Humans understand situations that are not so black and white, while computers struggle to draw insights from data in the same way.

Top leaders could see data telling them to stop investing in a particular department just as they are on the cusp of a big innovation. It’s incredibly important to recognize in HR that no matter how good the technology gets, nothing can replace face to face conversations and respectful relationships with employees. The test for HR professionals in 2018 and beyond, is how to balance that human connection, with the efficiencies cloud technology can provide across their departments. Striking a balance between the two will be the key to success.”

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Until Next Time, Be Audit-Secure!

Lisa Smith


Lisa Smith is CEO of Andere Seminars, LLC and Chief Content Developer at BeAuditSecure.com. Follow her on Twitter, connect with her on LinkedIn, listen to her Small Business Spoonfuls Podcast, and find more from her in Audit-Secure Authority at BeAuditSecure.com

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