A recent survey conducted by IDG Connect predicts rapid growth for cloud HR software, as organisations move away from outmoded legacy on premise systems and search for more suitable global HR software.
Feedback aggregated from 100 IT executives working for companies with 1000+ employees suggested that 56% of those companies who haven’t already moved away from on premise HR, plan to migrate to cloud HR solutions within a year.
Amongst the survey sample almost half had already made the shift to cloud HR software. Based on this report, for the majority of legacy on-premise HR system users it is rapidly becoming a question of “when” rather than “if” they choose to move to implement a cloud HR solution – this is clearly represented in the statistic that almost 1 in 4 of those who partook in this study and still use on premise HR systems planned to move within six months.
This data is highly consistent with Gartner’s prediction that the global HR & payroll software market will be worth $8.3Bn by the end of 2014 and $8.8Bn in 2015, by which time cloud HR solutions are set to hold a market-share of approximately 75%.
IDC is even more confident about the future of cloud HR solutions in the context of the market for global HR solutions, calculating that the market was worth $9.9Bn in 2013 and will grow by more than 20% to reach $12.5Bn in 2016.
As to “why” the increasing popularity of cloud HR solutions, there are several contributing factors. Certainly there is a growing consensus that cloud is simply a better way to manage information technology. Factors commonly cited include:
- Low (or no) capital expenditure
- Reduced Admin costs
- Rapid deployment
However, what is most illuminating is that over a half of respondents suggested their desire to change systems is driven by a need to compete with rivals who already run cloud HR solutions. A similar percentage were motivated by the belief that this type of global HR software provides a better support for business growth.
Other key issues encouraging cloud HR software adoption include:
- Discontinuing legacy HR systems
- Better functionality
- Enabling systems integration
- Cost efficiencies
- Less drain on internal IT department
- Easy upgrades with no downtime
All of this lends industry experts to widely accept that cloud HR software provides a ‘silver lining’ to the systems and personnel challenges modern businesses face in 2014 and beyond…