Why core HR functions are soaring in the cloud
In the past 50 years, there’s been little variation in how we define core HR functions. Fundamental processes such as payroll, timekeeping, and employee data management remain central to human resources operations and HRIS tools. But what has changed significantly is the way in which those functions are now being viewed: As potential drivers of profitability, innovation, and business growth.
Today, remote workforces are spread far and wide. Finding – let alone retaining – the best people is also becoming a serious challenge. To compete, organizations need to integrate and unify their operations. This means having the ability to analyze employee data and centralize global processes on a single HRIS platform. When core HR functions can be accessed and connected in real time – across every region – companies benefit from more streamlined practices, as well as the powerful data-driven insights that come from cloud-based core HR solutions.
Just a few decades ago, we would never have guessed that the records tucked away in HR filing cabinets would one day hold the power to innovate workflows, improve employee wellness, or heighten productivity. But thanks to AI-powered cloud technologies, that data is getting a chance to spread its wings.
Growing demand for cloud-based HR systems
More is being asked of HR teams than ever before. Human resources departments are becoming a hub for innovation, people analytics, and high-level organizational counsel. The best organizations are increasingly looking at their HR departments as potential profit centers, rather than in their traditional role as a necessary cost center. Core HR functions and operations are being scrutinized for their efficiency and demonstrable value to the business.
As today’s organizations face unprecedented levels of competition, economic uncertainty, and staffing challenges, corporate leaders are starting to ask some hard questions: Can we better use employee and payroll data to trim excess and ensure we are offering competitive rates? Can we do more to make our employee-facing HR systems more relevant and usable? Can we improve our current processes to minimize our compliance risks?
Fortunately, the answer to all those questions is “yes”. But to achieve those goals – and to integrate with all the departments and data centers necessary to do so – HR teams urgently need centralized, agile software solutions. Systems that integrate and operate in real-time, connecting and unifying business operations in the cloud.
What makes cloud HR a win/win?
The best business solutions don’t just solve problems, they foster understanding. Just knowing that something is good for business isn’t enough – you have to know why it’s good for organizations and how it can be replicated and applied to other things. The beauty of cloud HR solutions is that they can help you see problems and challenges, and also help you find the best way to solve them.
Improved employee experience. Cloud-based HR solutions are mobile-friendly and able to offer a more streamlined user interface and experience – including the capacity for personalization and real-time data integration. This delivers greater visibility into payroll, benefits, schedules, training, career development, and more. When employees can more easily access these tools, their experience will improve, and they will generate data that helps managers to better recognize and upskill valuable team members.
Greater productivity and efficiency. Errors and inefficiencies waste resources and add to team stress loads. Integrated, cloud-based HR solutions allow for processes to become smoother and more automated over time. Pre-packaged integrations and standardized HR processes also help to support workforce planning and to build up more coherent workflows for new and existing teams.
Global and regional integration. Traditionally, even the best-run global organizations wasted a lot of their time reinventing wheels and trying to make disparate rules and workflows fit into a common system. Cloud-based HR systems help to bring standardization to international processes. This frees up teams across the country and the world, eliminating much of the time-consuming drudgery of fitting their systems together – and empowering them to get on with the more important business of sharing ideas, skills, and creative solutions.
Risk reduction. Cloud connectivity, embedded localization features, and intelligent technologies come together to keep things current and aligned. Real-time updates and intel about laws, rules, and compliance issues mean that all your teams – wherever they are – can automate their compliance tasks and be alerted to change. These findings and updates can then be more easily implemented to help create a better, safer workplace, from the C-suite to the shop floor.
Lowered costs. HR processes are complex and comprise multiple operational areas, regions, and roles. When they are unified from end to end on a single platform, it is far easier to get the big picture and avoid bottlenecks and delays. Running costs and implementation times can also be pared down when localized best practice content is embedded in the system.
Röhm: Customer success
Learn how Röhm uses a cloud HR system to streamline core HR processes.
How does a centralized HR platform deliver the global goods?
Findings from the American Opportunity Survey, conducted by McKinsey and Ipsos, confirm what we’ve all been observing: the fact that flexible and remote working has grown by “anywhere from a third to tenfold since 2019”. This includes an attendant rise in gig and freelance workers as well. And where once the individual departments were often responsible for sourcing and paying freelancers and contractors in their own regions, this duty is increasingly falling to a centralized HR team as a matter of risk and financial management.
Of course, even between states, provinces, or regions there is a myriad of different laws and labor codes. With manual systems in play, the idea of even considering centralized global HR compliance would seem impossible. This is an area where cloud-based core HR really takes off. The best integrated HRIS solutions can:
Use a single platform that looks at all regional and global worker types and organizes them with a consistent and standardized set of processes.
Localize benefits, time off, and other timekeeping and scheduling features – updating automatically in the cloud as and when these regulations change in any region.
Manage payroll and invoicing in all the currencies you work in – with exchange rates that adjust in real time.
Support organizational management and best practice capabilities in a variety of languages.
Integrate with other essential business systems such as cloud ERP, to create and deliver custom financial and labor analysis reports, combining different regions and data types.
By using modeling tools and embedded analytics, managers can visualize organizational structures to improve recruiting, succession, learning, and workforce planning.
Global HR in the cloud: Compliance and risks
In 2021 the US saw record payouts for workplace class action suits, and 2022 is poised to eclipse even that. The past few years have also seen a dramatic rise in individual lawsuits and formal complaints. Organizations are grappling with multi-regional workforces and attempting to navigate safety and compliance for off-site and freelance workers. Furthermore, we are in a time of rapidly evolving attitudes and demands around diversity, equity, inclusion, and belonging (DEI&B), addressing hot-button issues and definitions related to gender, race, and identity. For HR teams, trying to manually keep pace with these trends is unrealistic. And if the risk of litigation from legitimate grievances isn’t worrisome enough, organizations also face nuisance legal action from bad actors who trawl through companies’ policies and handbooks for no other reason than to find language or policies that aren’t up to standards.
In other words: there’s no longer a safe margin of error in HR compliance – and getting it wrong could risk irreparable financial or reputational damage.
The good news is that cloud HR solutions can offer a lifeline to help support and protect both companies and employees. When HR applications are integrated with your other business systems, you can leverage the power of advanced data analytics to stay ahead of uncertainty. Your HR system can even notify you of the latest legal and regulatory information in real-time and allow you to refresh your compliance landscape, across all regions and countries.
When is the best time to move your core HR functions to the cloud?
Almost all corporations currently use at least some cloud applications and solutions. Gartner predicts that by 2025, 85% of businesses will have adopted a primarily cloud-based infrastructure. Why the shift? When you move to the cloud, you can integrate your HR solutions with your ERP and other connected business systems, augmenting your entire global operations with HR-specific features, intel, and data. The sooner you make the move, the sooner you reap the rewards. So whatever stage you’re at in your cloud transformation journey, the time is now to prioritize your HR operations and leverage the gold that’s held in your core HR data and functions.
Explore core HR in the cloud
A unified HR platform drives agility, growth, and enhanced employee engagement.
More in this series
SAP Insights Newsletter
Ideas you won’t find anywhere else
Sign up for a dose of business intelligence delivered straight to your inbox.