Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

HR practiceHR TechnologyOpinion

Could Software as a Service be the answer for specialist HR functions?

by Ruth Thomas 11 Oct 2011
by Ruth Thomas 11 Oct 2011

Software as a Service (SaaS) looks to be changing from a flavour of the month to an accepted alternative for HR.

As reported in Gartner’s “Magic quadrant for employee performance management software” report in March 2011, external hosting of HR applications has increased from 50% in 2010 to 62% in 2011. Gartner concludes that market acceptance of externally hosted employee performance management applications continues to grow, with customers of all sizes adopting this approach.

This view is reiterated by Forrester’s “HRM solutions: traditional models clash with next-generation processes and technology” report, which concludes that SaaS will become the deployment model of choice for HR solutions. Indeed, for areas including compensation, HRM vendors have seen their ratio of subscription deals reverse in the last two years licences from 80% licence to 80% SaaS.

Ruth Thomas

Ruth Thomas, chief operating officer, Curo

In this article, I look at just a few of the specialist areas where SaaS may offer users an advantage over more “traditional” approaches.

In terms of the delivery of HR technology, it is worth considering that, while traditional enterprise-resource planning (ERP) systems are often still the best option for core HR functions that need to integrate with corporate-wide data, SaaS is fast becoming an accepted option for specialist applications in such areas as compensation planning, benefits and performance management.

More often than not, SaaS software providers in these particular disciplines have in-depth and extensive knowledge of their specialist area, and the capacity and ability to build their products from the ground up, ensuring that their solutions address the real and unique needs of HR in these functional areas.

In addition to this industry knowledge, there are often other benefits of HR SaaS solutions:

  • Rapid deployment of software and enhancements. SaaS solution providers can provide customers with access to product enhancements and new releases at a much faster pace than “on-premise” software, which is often associated with painful, slow and expensive upgrades. This is due to the shared or multi-tenanted approach taken by many SaaS providers that allows them to share a single version of code securely. Therefore, all clients can be upgraded simultaneously and often as part of the standard licence fee.
  • Sharing best practice and enhancement. Leading SaaS providers continuously invest in and enhance their product to meet evolving client requirements and to ensure that their product remains leading-edge and adaptive to changes in market or compliance. Through the multi-tenanted approach all clients can benefit from these product enhancements. This not only ensures that your software and the business processes it supports are aligned with market trends but enhances the value of your original investment as you gain incremental functionality at no additional cost during the period of the contract.
  • Faster implementation timelines. SaaS solutions speed up implementation times as there is no need for purchase and installation of physical client servers and associated software and hardware or extensive customisation. This allows clients to adopt software enhancements at a faster pace and deploy them to their end-users in line with changing requirements. This is particularly important in the provision of compensation solutions where business requirements are subject to more regular change in line with annual compensation cycles, budgets and legislative requirements.
  • More effective ways of controlling costs. A typical SaaS model involves customers paying a licence or subscription fee for access to the solution and associated upfront implementation fees. These are greatly reduced from the cost of implementing traditional “on-premise” solutions as the supplier is responsible for delivering the software, maintaining the platform and managing upgrades. This should equate to a lower total cost of ownership over the lifecycle of the contract and a faster return on investment.
  • Enhanced security. SaaS delivery models depend on high levels of security, as customers outsource data storage and security to the provider. SaaS vendors place a strong emphasis on ensuring the security of their customers’ information, and standards such as SAS70 will ensure that high levels of security are maintained and are often more rigorous than internal controls.

Of course, it is worth considering adopting a mix-and-match approach that enables you to recognise the investment already made in core HR technology (such as ERP systems) but connect these to specialist and integrated SaaS solutions. This approach is facilitated by the increased adoption of common interface standards controlling data flows between different software applications. This allows employers to swap components in and out as better solutions are developed and come to market.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

A SaaS approach may mean that you end up dealing with several providers and their respective contracts, pricing approaches and support services. However, if this mix-and-match model is adopted and limited to a small number of key support services, the advantages may well outweigh the additional overhead.

Ruth Thomas is chief operating officer at compensation planning solutions provider Curo.

Ruth Thomas

previous post
Legal Q&A: Requiring employees to speak English at work
next post
Businesses need to recruit more smartly to improve diversity

You may also like

Culture, ‘micro-incivilities’ and invisible talent

14 May 2025

CIPD appoints expert in AI to boost support...

8 May 2025

Preparing for a new era of workforce planning...

8 May 2025

Rethinking talent: Who was never considered in the...

7 May 2025

Eight ways to best support grieving employees

6 May 2025

M&S pauses hiring as it deals with cyber...

2 May 2025

Quarter of employees worried AI will threaten jobs...

28 Apr 2025

Google concerned by slow AI take-up in UK

25 Apr 2025

Leading with honest feedback: A responsibility in recruitment

24 Apr 2025

Exploring the best London office locations for ‘Zillennials’

16 Apr 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+