Cloud HR Software compared to Local HR Software

HR Software Shopping

Choosing HR software can be like picking out a box of cereal.
There’s a ton of options but you’ll only be happy with a couple and it might not be the one the “big boys” in the office think they need!

Are you in the mood for something healthy or something sugary? What about the one that’s on sale this week?

Similarly, once you start looking at your options for HR software solutions, you may feel overwhelmed with all their options, features, prices knowing that the decision you make is the decision your stuck with.

You can easily google reviews of various products to see which ones are more highly rated, but you may not always get guidance on more specific information you need.

The first item to consider is the platform. Do you need cloud-based or an owned system. This is a huge decision that can’t be overlooked if you’re shopping for HR software as it’s one of the largest differentiators between solutions and will impact the very way you interact with the software. It’s bound to make a huge impact on your human resources information system decision, and will easily affect the efficiency of your company’s processes in the future.

Considering these two different methods to implement HR software in your business, and carefully evaluating each one’s benefits and drawbacks can be a huge headache but has to be done to make sure your decision aligns with your company’s needs. Below are some of the top pros and cons to choosing between cloud based HR software systems and owned systems presented in a quick and efficient a manner so you can use it for reference when you’re looking at employee management systems.

Hosted HR Software (Cloud based HR Software)


  • You don’t have to have your own or maintain servers
  • You don’t have to install the HR software on your servers or computers
  • You don’t have to update the HR Software as typically the host keeps it updated
  • You can access your data via the Internet from anywhere with proper login
  • Security is managed by the cloud HR Software company instead of your company
  • Installation time is typically short
  • Less expensive with little to no up-front costs
  • Back ups and redundancy are typically handled by host


  • You have no specific control over the HR software servers
  • Permissions based logins may present a security risk which should be properly vetted
  • If the hosting servers go down will you have a method of accessing your information
  • Prices may increase as you company grows with per employee costs

Purchased HR Software


  • You own the product in its entirety.
  • Information is stored on your servers.
  • You have direct control over your servers and information.
  • Purchased HR software solutions can be cheaper in the long-run; up-front costs tend to be the bulk of their price.


  • Since you own the software, you’re the one who has to handle most problems that occur
  • You need an IT team able to install and maintain the program.
  • You’re in charge of making sure your servers are maintained, updated and running well
  • You’re in charge of security precautions, issues, firewalls and proactive defenses to safeguard your information
  • You must update the software as new versions come out as laws may change that directly affect the HR Software system
  • If server operating system updates are necessary you may have to pay to update your HR Software to work

With all of these pros and cons to consider, each should be evaluated in detail as each company has specific needs. Cloud-based and Purchased versions both have various aspects that might fit your company better than the other. So it’s up to you to figure out which will work better in your company and which of the two types of HR Software platforms will be better to implement in your company.

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