4 Challenges of Cloud-Based Human Capital Management Technology

By Marianne Chrisos - Last Updated on January 6, 2020
4 Challenges of Cloud-Based Human Capital Management Technology

Cloud-based computing software and technology solutions continue to become the norm for many businesses. In fact, Gartner suggests that by 2022, nearly 30% of all IT spending will shift to cloud-based software. Rather than having to deal with multiple installations and software licenses, as well as on-site server space issues, businesses are able get the same technology to support their business needs with much less hassle and much more accessibility than in the past.

What are the challenges of using cloud-based human capital management technology?

Human resource groups are beginning to notice the benefits of streamlined software solutions that encompass more human capital management functions. There are several reasons why using cloud-based HCM technology can be good for an organization, but businesses can also expect challenges as they integrate new software solutions. Here are some of the challenges that cloud-based HCM technology potentially poses for businesses, as well as how to handle them as they arise.

1. Security

Cloud-based solutions often have robust security features built-in so that the dangers of hacking or data breaches are minimal. Still, many businesses are often hesitant to take HR files and systems, which usually include sensitive employee information, and move them to the cloud.

Other organizations find that the ease of use and accessibility that cloud-based systems offer can lead to the wrong people having access to certain data. It’s crucial, then, that HR teams are properly trained in using cloud-based Human Capital Management technology to avoid security issues at all costs. It’s also important that leadership and IT teams are vetting the HCM software they subscribe to, to make sure it’s suited for the unique security needs of HR administration and tasks.

2. Tech support

Once a new technology is added to an organization, it immediately causes a spike in the demands put on internal IT teams. From installation and integration to troubleshooting, a new cloud-based HCM system will likely lead to a bigger demand on the resources of an IT team, so it’s important to make sure that there’s buy-in from all stakeholders, including IT management, when it comes time to install and manage a new HCM system.

In the past, it’s possible that the departments of HR and IT didn’t interact much, beyond onboarding and help desk requests, but a cloud-based program implementation will require fewer silos business-wide and better communication across the entire business enterprise. It’s also a good idea to invest in an HCM vendor that offers robust tech support as part of the business subscription.

3. Scalability

A solution that works well now will need to work just as well as the business grows. Finding an HCM solution that can handle the unique and often-changing needs of your business is important.

4. Resources

A fully integrated end-to-end HCM solution is likely to bring with it a huge influx of new, accessible data. HR professionals are not always data professionals, so this can put a burden on the staff of already-busy HR teams. It is also possible that HCM systems won’t integrate well with other cloud-based systems, limiting data access and data cohesion.

One question to ask when vetting cloud-based human capital management vendors is if they are compatible with already existing systems. It might also be a good idea to invest in a cloud-based HCM system that’s an add-on or existing part of a cloud-based CRM that’s already in use by your business.

While technology often offers businesses plenty of perks, including ease of use, simpler upgrades, competitive advantage, and more data with which to make business decisions, it can also include new challenges, particularly around implementation and adoption time. But with the right software vendor, proper HR training, and appropriate IT support, adding cloud-based Human Capital Management technology to your software lineup will likely be a smart decision that will help you better handle all aspects of human capital management.

Marianne Chrisos | Born in Salem, Massachusetts, growing up outside of Chicago, Illinois, and currently living near Dallas, Texas, Marianne is a content writer at a company near Dallas and contributing writer around the internet. She earned her master's degree in Writing and Publishing from DePaul University in Chicago and has worked in publishing, advertising, digital marketing, and content strategy.

Marianne Chrisos | Born in Salem, Massachusetts, growing up outside of Chicago, Illinois, and currently living near Dallas, Texas, Marianne is a content writer at a c...

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