4 Signs It's Time for a Cloud-Based HR Platform

Just like most business functions, you can now get HR help from the cloud. Is it time?

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By Gwen Moran

Opinions expressed by Entrepreneur contributors are their own.

You've had an uptick in hiring and your managers are awash in benefits applications, employee training materials, and accommodating new employee scheduling needs. With all of the administrative duties that hiring and managing people requires, it seems that there's barely any time to, well, manage anyone.

"When your people are managing process more than other people, it might be time to look at some of these solutions," says Adam Ochstein, founder & CEO of Chicago-based StratEx, a human-resources technology firm.

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Like most business functions, HR platforms are increasingly cloud-based. Here are four signs such a tool might be a good move for your business.

1. When HR is a productivity-killer. Ochstein recommends doing an analysis of employees' time. Are your managers or HR personnel spending too much time on basic tasks that could be automated? And if they were spending time on other areas, could that deliver more value to the company?

2. When solutions exist. Solutions exist for areas such as new-hire tracking, time and labor management, performance management, benefits administration, and other human-resources activities. Is there a good option for the needs your company has? Look for solutions with good track records and solid reviews. You can find information about and reviews of various platforms in trade publications and on web sites like Capterra.com and GetApp.com. Of course, ask colleagues for referrals, as well.

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But, don't "kill an ant with a mallet," Ochstein says. Many comprehensive solutions are typically beyond the needs of a small- to mid-sized business. For example, you don't need applicant tracking if you're not hiring a hundred people a year. However, using a platform that lets employees sign up for their own benefits and request vacation time could be a big time saver for your staff, he says.

3. When your team buys in. Of course, the best platform in the world won't be effective unless your HR department and managers use it. Be sure to involve them in the platform review and selection process to ensure that the investment will really pay off.

4. When there is room for ROI. Ochstein says that bare-bones applications can be as little as $8 per employee per month, while robust, comprehensive systems can run up to $60 per employee per month. A typical 25- to 30-person company would likely need to budget $8,000 to $10,000 for moderate solutions, he estimates. If the benefit of having your employees devote their HR administration time to other tasks and projects would exceed the projected expenditure, that's another sign it could be a good move for your business, he says.

Related: Recruiting at a Hackathon? 5 Tips for Success.

Gwen Moran

Writer and Author, Specializing in Business and Finance

GWEN MORAN is a freelance writer and co-author of The Complete Idiot's Guide to Business Plans (Alpha, 2010).

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