The adoption of cloud services such as storage, CRM, etc., are a given at this point. One of the faster growing sectors, though, is in human resources management (HRM), sometimes known as human capital management, which is an approach to employee staffing where people are looked at as assets (human capital) whose value can be measured and can be enhanced through investment. Gartner predicts that cloud systems will account for almost half of the $9 billion human capital management systems market in 2015. By leveraging the cloud, businesses can outsource core human resources (HR) functions like payroll, benefits, and risk and compliance, eliminate the burden of HR administration and focus on growing their businesses.

The intersection of HR and cloud computing marks an important step in the evolution of HR technology. Through the cloud, HR technology can offer businesses a platform service delivery model to help employees, managers and executives access critical HR data whenever needed. In order to fully appreciate the impact of cloud computing on HR, it's worth taking a look at the evolving nature of HR technology through the years.

The Evolution of HR Technology
Prior to the 1990s, HR focused almost entirely on manual methods for personnel administration, and businesses invested the whole of their HR activities processing and managing paperwork. Large mainframe computers could automate HR processes, but they were limited to basic record keeping and payroll function.

In the 1990s and early 2000s, client-server architectures became common and new possibilities for HR emerged. For instance, desktop applications, such as spreadsheets that log HR functions, categories and data, improved the efficiency and ease of HR functions but still required time to verify and ensure data accuracy. However, these applications offered new and useful data that shifted human resources solely from payroll and personnel to the perception of people as valuable business assets. For example, data from these tools over time could be used to evaluate employee performance, assess job candidates, manage employee turnover and create professional development goals. In this light, workers became viewed as human capital with a measurable value that could be enhanced through investment.

Additional integrations of information technology and HR, such as Enterprise Resource Planning (ERP), Human Resource Management Systems (HRMS) and Human Resource Information Systems (HRIS), also became standard in businesses that could afford the infrastructure investments. Yet, while these technologies offered the ability to save time and money for larger companies, for many SMBs it wasn't affordable.

HR's Shift to the Cloud
By the 2010s, cloud-based technologies had evolved to allow core HR services to shift to the Software-as-a-Service (SaaS) model. Companies began adopting this method in place of expanded internal HR teams due to the lower costs, ease of use and rich features. For instance, businesses saved money because they were no longer responsible for costs associated with implementation, software updates or licensing.

Rich features such as online self-service and mobile device applications offer faster access to reports, time sheets, documents and information from anywhere and at anytime. As a result, employee satisfaction is increased from ease of use. These features also allow businesses to go digital and lessen their reliance on paper, resulting in additional cost-savings and a smaller carbon footprint on the environment.

Cloud-based analytics and reporting tools also provide strategic insight toward decision-making. As an example, employee performance data over time can be leveraged to support the development and delivery of performance appraisals. The option to save, download and access these reports from the cloud helps management better execute on this data and vastly improve business agility and efficiency.

When to Outsource Your HR
From the days of large mainframe computers to the rise of the Internet and cloud computing, HR technology has evolved to play a critical role in how businesses grow and manage their employees. While the capabilities are great and the benefits are clear, it's important for businesses to know when it might be time to outsource HR.

The first step in the process should be to perform an analysis of the time your company spends on HR and assess if it can be completed more efficiently through automation. If you're spending too much time managing processes, and not enough time focusing on your workers and their growth, it might be time to look at some of these solutions.

Keep in mind that a cloud-based solution might also bring unintended complications. For example, if your business uses an on-premise system for employee record management, benefits administration or payroll, you might run into integration problems if you decided to outsource a talent management cloud-based service.

Additionally, some cloud-based services are inherently less robust than others and might come with tradeoffs such as forced upgrades, subpar features or fewer customization options. It's important to perform a complete evaluation of the different service providers available before you decide on a solution. Be sure to consult your staff and ask for their input, and then decide if it's worth the investment.

It is clear is that cloud computing services will only continue to increase. Business owners who don't hesitate to leverage cloud-based HR platforms early will free up time to focus on their core competencies, and more quickly bring success to their businesses.