HR in the Cloud: Cost Center or Value Contributor?

HR in the Cloud: Cost Center or Value Contributor? Is your HR department a value contributor or a necessary cost center? For most businesses, HR is the department we love to hate. It requires personnel, resources, and time, but it doesn’t move you forward toward your financial or business goals.

Thanks to cloud computing, that’s all changing.

How to Deliver Value in HR

Harvard Business Review described a successful HR value proposition as one that improves outcomes for the organization and its customers. But that’s not always easy to define. Paperwork has to be processed, but how can that impact the bottom line?

The key is to consider how the activities of HR will impact people, giving them better tools to perform their jobs more effectively. The focus is on the recipient (employee, manager) rather than on the process (completing paperwork). For example, a value-added activity is one that produces:

  • Higher productivity
  • Increased employee engagement
  • Reduced administrative time
  • Higher work software adoption rates
  • Better information for decision-making

All of these results increase the company’s profit potential by helping employees and managers to do their jobs more effectively. It’s not just about processing information and managing the workforce; it’s about creating superior opportunities for people to do their best work and produce improved business results.

How Cloud Computing Helps You Add Value

Forward-thinking HR departments have been moving toward a value-added approach for over a decade. But there’s a new kid on the block that is unlocking previously untapped potential.

It’s called cloud computing.

Ninety-five percent of businesses operate in the cloud, and most HRIS systems are now cloud-based. But is your business leveraging the potential of the cloud to move HR into the value-add category? If not, it may be because you’re focusing on how your software improves HR function rather than how it improves business outcomes.

Let’s look at four ways cloud computing improves the way you do business and the value-add contribution of each:

1. Predictive Analytics—Access to greater volumes of data, along with the ability to extract information and monitor behavior patterns, gives you the ability to answer key questions and predict trends in areas like recruiting, turnover, compensation, and flight risk.

Value Add Contribution—Solve workforce business challenges, producing increased retention rates and higher engagement.

2. User Experience—Optimized mobile experiences and user-oriented HR software designs create higher adoption rates among employees and greater satisfaction on the job.

Value Add Contribution—Better user experiences make employees more efficient with their time, which translates into higher productivity.

3. Standardized Admin Processes—Performance reviews, candidate screenings, job interviews, and other processes can be standardized across the organization for greater efficiency. Legacy processes can be updated to reflect new organizational values and workforce best practices.

Value Add Contribution—Reduced administrative time investment helps both managers and employees maximize output and increase productivity.

4. Flexibility—When you operate in the cloud, your employees can work from anywhere. Managers can conduct performance reviews from their smartphones, and employees with flexible work arrangements can clock in and out from home.

Value Add Contribution—Productivity flourishes and employees enjoy the freedom to telecommute, which can result in greater job satisfaction, better performance, and better relationships with supervisors.

The common thread in each of these examples is the focus on producing measurable business results: productivity, job performance, retention rates, and ultimately, profit.

That’s the value cloud-based HR software systems bring to the table.

If you’re ready to leverage your HR software system to produce value-added HR strategies, check out our HRIS comparison tool to help you choose the right software for your business.


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