HR Technology Is Moving To the Cloud. Are You Prepared?
A recent PwC study, “Transformation enabled by HR in the Cloud,” is offering a first-hand look at the the rapid progression of cloud migration in HR technology. The report, which highlights findings from a survey of HR and IT leaders at 650 companies across the globe, provides some great insights into the main motivators causing this migration as well as some trends resulting from the influx of cloud-based HR technology.
HR Technology Migration to the Cloud – The Motivators
According to survey results, there are a number of factors causing HR technology’s migration to the cloud. Below is a breakdown of the leading motivators for respondents:
- 64% wanted more independence from their IT department
- 63% wanted to lower costs
- 45% wanted to take advantage of more innovations and faster product release cycles
- 43% do not have the internal resources to host & manage software on their own
- 33% wanted mobile access to their HR technology
- 29% wanted to transition to a more lightweight solution
- 3% were mandated by their company to move to the cloud
So with such high demand, how prevalent is cloud-based HR technology currently? PwC found that 44% of HR departments utilize cloud-based solutions and another 30% of departments (32% specifically amongst recruiting departments) plan to migrate to the cloud over the next 3 years.
These numbers rose significantly from just this past year when only 23% of companies used cloud-based HR technology and 26% intended to do so in the next three years. This drastic jump in an abbreviated time frame indicates the continuing and rapid adoption of cloud-based HR technology.
HR Leaders Move Towards Vendor Consolidation
As the demand for cloud HR technology solutions has grown, a wave of vendors has flooded the market. On the one hand, this is great because HR professionals now have plenty of solutions to choose from, with each product offering unique solutions to different functions within HR.
However, managing relationships with multiple vendors can also complicate things considerably more than dealing with one vendor (from support and IT considerations to systems interoperability and integrations). For this reason, 40% of HR leaders (up from 30% 3 years ago) plan to use fewer vendors going forward. Top motivators for doing so are:
- Easier relationship management (61%)
- Less internal IT support needed (60%)
- Better vendor support (57%)
- Greater system interoperability and integrations (47%)
- Ability to drive better volume discounts on licenses (41%)
- More consistent user experience (39%)
When vetting amongst vendors, buyers should remember that they are looking for a long-term partner. As they go through discovery calls and demos, buyers should openly communicate their requirements and expectations, as well as take some time to understand the following:
- Product roadmap
- Full suite of products offered by the vendor
- Service level agreement and issue resolution approach
- Release and maintenance schedule
- Integration capabilities
Adoption of Mobile
One significant trend uncovered by PwC’s study was the push by organizations for HR cloud applications with mobile capabilities. 33% of businesses made the migration to cloud-based HR technology for mobile access capabilities. Beyond this, 59% of survey subjects reported that they believe mobile capabilities would drive better performance. However, only 18% of these same individuals currently utilize mobile HR technology.
Some of the top areas where respondents believed mobile capabilities would improve processes are as follows:
- Workflow approvals (Job approvals, offer approvals, etc.) (40%)
- Viewing candidate information (36%)
- Company directory look-ups (32%)
- Time and expense entry (29%)
- Training enrollments/delivery (26%)
- Change personal/job data (24%)
- Viewing HR reports/analytics (21%)
- Performance management (18%)
- Recognition programs (10%)
The last major finding from “Transformation enabled by HR in the Cloud,” is the need for HR analytics solutions. Of those surveyed, 40% did not have an HR analytics strategy at their organization and 52% did not have a dedicated HR Analytics team. Despite this, 44% of PwC survey subjects believe that mobile analytics capability will boost manager productivity.
With limited resources and lack of formal analytics strategies, HR professionals need lightweight systems that they can leverage from any device to easily uncover performance trends, gather insights for optimization, and then share with team members.
Newton’s Applicant Tracking System is a Pioneer in Cloud HR Technology
At Newton, we hate to toot our own horn, but we have been at the forefront of the cloud migration in HR technology. For years, we have offered an industry-leading, cloud-based applicant tracking system to help organizations optimize their recruiting and hiring processes. In fact, in 2015, we were named the 3rd fastest growing cloud app, second only to Slack and Credit Karma.
Beyond our early adoption of the cloud, we have had the foresight to incorporate other HR technology trends into our product development process as well. Newton was the first fully responsive (mobile and tablet enabled) ATS to offer a lightweight and intuitive analytics platform. Also, having recently been acquired by Paycor, our ATS now falls in line with a fully-integrated suite of products (all under the Paycor umbrella) that manage every aspect of the full HR spectrum. Hooray for vendor consolidation!