HR Software

What is a SAAS HR System?

Employee using SaaS HR software

Updated 14/12/23


A SaaS HR system is a cloud-based solution that offers companies online access to employee management functions. You may have heard of the term ‘SaaS’ at some point in the last few years – and you’ve perhaps thought, what is a SaaS system? And, why use a SaaS HR system?  

The term SaaS (Software as a Service) was coined back in the ‘90s, but the past fifteen years have seen significant developments in software, so the use of the term is more widespread.  

SaaS applications are becoming increasingly popular among SMBs due to their flexibility and affordability, but how much do you know about SaaS software, and in particular, SaaS HR systems? Here at PeopleHR, we regularly have to explain the meaning behind jargon-filled terminology, and ‘SaaS’ just happens to be one of them.  

So, in this article, we’ll present a high-level definition and explore why you should consider using a SaaS HR system.

What is SaaS?

SaaS is a cloud-based delivery model, whereby a provider develops and maintains cloud application software, provides automatic software updates, and makes software available to its customers via the iInternet on a pay-per-use basis. 

There are many SaaS software on the market, and the options to choose from are diverse. SaaS products are divided into groups based on the sector or industry they improve, such as online banking or communication.  

Some SaaS software categories include: 

  • Customer Relationship Management (CRM) software 
  • Enterprise Resource Planning (ERP) software 
  • Accounting software 
  • Project management software 
  • CMS and e-commerce platforms 
  • Communication platforms 
  • HR/HRM solutions 
  • Payment gateways and billing solutions 

You may have heard of the likes of Salesforce, Microsoft Office 365 and Google Workspace, all of which are examples of SaaS. As Access PeopleHR is a cloud-based HR system, it too is classed as SaaS.

What are the different types of SaaS HR software?

There are three main types of SaaS HR systems for organisation and management, which include:  

Human Resource Management System (HRMS)

HRMS focuses primarily on the administrative functions of human resources. It encompasses tasks related to the day-to-day operations of HR, such as:

  • Employee database management: Maintaining records of employee information, including personal details, employment history, and contact information.
  • Payroll processing: Managing salary payments, tax deductions, and other financial aspects related to employee compensation.
  • Benefits administration: Handling employee benefits, such as healthcare, retirement plans, and other perks.

Time and attendance tracking: Monitoring employee work hours, absences, and annual leave.

Human Capital Management (HCM)

HCM takes a broader and more strategic approach to managing human resources. It includes functionalities beyond HRMS, focusing on:

  • Talent management: Strategies and tools for recruiting, retaining, and developing talent within the organisation.
  • Workforce planning: Analysing and forecasting workforce needs to align with business objectives.
  • Analytics: Utilising data for insights into employee performance, engagement, and overall organisational effectiveness.
  • Employee development: Implementing programs and initiatives to enhance employee skills and capabilities.

Aligning with business objectives: Ensuring HR strategies contribute to the achievement of broader organisational goals.

Human Resource Information System (HRIS)

HRIS centres on managing HR-related data and information. It involves:

  • Data management: Gathering, storing, and organising employee data, including demographics, performance metrics, training records, and other relevant information.
  • Analysis and reporting: Providing tools for analysing HR data to derive insights and generate reports that aid decision-making processes.

Information accessibility: Ensuring accurate and up-to-date HR information is available for HR professionals and management.

Understanding these differences is essential when selecting HR software solutions, as they cater to different aspects of HR management, from administrative tasks to strategic planning and data-driven decision-making.

Organisations should align their software choices with their specific needs and objectives, whether focused on day-to-day operations, strategic talent management, or efficient data management and analysis.

We’ve defined SaaS, the different types of HR SaaS platforms, let’s look into the reasons why you should choose a SaaS HR system.

Why use a SaaS HR system?

There are many reasons why an SMB might want to use a SaaS HR system. Online human resource management is a powerful tool that can help small to midsize businesses manage their employees more efficiently. In doing so, those responsible for HR can eliminate repetitive and error-prone manual tasks (like managing multiple spreadsheets), making workloads manageable, streamlined and efficient. 

The most effective HR SaaS solutions provide numerous tools and applications that help you oversee and manage the entire HR process. Core HR tasks that would have previously been handled by you (like employee verifications, updating records, benefits admin, for example) can now be effectively delivered via self-service in a cloud computing environment.  

Top-tier cloud-based HR systems can be customised, giving you plenty of options for making design or function changes that are specific to your company. Let’s say you want to be reminded when a staff member’s birthday is coming up, workflow management software can allow you to do this with ease.  

Finally, HR software for SMBs can be a cost-effective solution – charged on a price per user, per month basis with little to no up-front fee. To find out more about the cost of HR software, check out our handy guide.

What are the benefits of a cloud-based HR system?

There are three key benefits of a cloud-based HR system: 

  1. Heightened productivity for both the manager and employee 
  2. A saving in time, allowing you to focus more on strategic initiatives, rather than administrative tasks
  3. Security, meaning data is more secure rather than managing it in-house by your IT team.

Automation of HR processes can relieve you of time-consuming burdens. You can also implement new features as your business changes and grows, since SaaS HR applications are scalable. For example, if your business hires more employees, you might find the need for a learning management system (LMS) to help maintain team members' knowledge without involving HR.

Benefits of a SaaS HR system:

  • Streamlines and automates your processes 
  • No need for regular upgrades and maintenance 
  • Access it anywhere, anytime  
  • A rich data source for all HR metrics 
  • Reduces error risk and maintains compliance 
  • A wide variety of features to help you stay on top of every aspect of HR management  

Although these characteristics can be found in all SaaS products, they differ depending on the targeted clients' preferences and the product's functionality.  

Having answered, what is SaaS and explored its respective benefits, now let’s uncover what businesses should look for when researching HR systems.

How does SaaS differ from traditional software licences?

1. Ownership and payment 

SaaS is managed and supplied by a third-party provider such as People HR, and accessed over the internet, paid via a subscription. This method allows for easier budgeting, in comparison to the considerable upfront costs tied to traditional software. Typically, users pay a subscription fee based on the number of users utilising the software rather than a large initial expenditure.

2. SaaS offers more location-based flexibility 

SaaS HR software is usable from any location with internet access; users aren't restricted to their workplace. This makes SaaS ideal for hybrid and remote work. Despite SaaS relying on internet connectivity, employees' use is subject to the reliability of their internet connections.

In contrast, traditional software is available only from a central location, limiting its flexibility but reducing its reliance on internet speeds.

3. On-site SaaS HR platforms require more input

For traditional HR SaaS software installed centrally, users take on the responsibility of regular maintenance and upgrades, which can lead to high costs as well as possibly (and regularly) requiring IT specialist management. 

Whereas, cloud-based SaaS HR systems offer automatic and centrally managed updates. In case of software issues, contacting HR systems support typically resolves the problem for SaaS users.

4. You can trial a HR SaaS platform to see if it’s a good fit for you

Many HR SaaS software allow you to trial their platform to see if it fits your business model and your overall expectations. With traditional software, this is much harder to do.

We’ve covered the differences between traditional HR SaaS software to cloud-based SaaS platforms. Let’s go over what your business should look for when choosing a HR system.

What should a business look for in a SaaS HR system?

If you’re a business administrator or another employee within a small to medium-sized business (SMB), you may want to build a case for the implementation of a cloud-based HR system. When researching and building your case, you can use the following list to illustrate how the right technology and expertise can yield significant productivity, cost, and employee engagement improvements. 

The top 3 features businesses should look for in a SaaS HR system include: 

  1. Employee self-service - Employee self-service (ESS) helps reduce the burden on HR personnel by enabling employees to manage their own accounts. By using ESS, employees can enter, change, or update their own information, without involving you (or whoever’s responsible for HR).
  2. Talent management - A SaaS HR solution should also have features to help facilitate the recruitment process. This will involve applicant tracking system , pre-designed email templates for initial comms, interview scheduling features (that are connected to the company’s email) and an automated option to post jobs, collect CVs and screen applicants for interviews.
  3. Payroll services - One of the most important aspects of HR is payroll. It goes without saying – employees need to be paid on- time and correctly. For small business owners, this area presents one of the biggest challenges, and is often where mistakes are made and compliance issues occur.

SMBs will opt to outsource their payroll as it’s less complex and more reliable than doing it in- house. If your selected HR software has payroll integration, then this is a big thumbs up. Everything will be fed into the same system – for example, time and attendance will ‘communicate’ with payroll, fully ensuring your staff get paid correctly.

What other features should I look out for?

Alongside employee self-service, talent management and payroll services, you shouldn’t overlook the following features in your SaaS human resources system:

  • Seamless integration: Look out for seamless software integrations with existing tools and software utilised within your company's ecosystem. We offer integrations with Google Docs, Slack, Microsoft Word, and Zapier, each offering a range of features to suit your needs.
  • Intuitive user interface: Prioritise HR SaaS platforms with an intuitive and user-friendly interface. A SaaS system that requires minimal training for both HR professionals and employees facilitates quicker adoption and reduces the learning curve, ultimately boosting productivity.

Robust security measures: Ensure the selected software prioritises vital data encryption and rigid security measures to safeguard sensitive HR and payroll information.

Streamline your organisation seamlessly with PeopleHR’s intuitive SaaS platform

Experience the efficiency and agility of modern HR management with PeopleHR. Discover how our efficient SaaS HR solution can optimise your operations. Get started today for a more streamlined and effective approach to managing your workforce!

Whilst we’re firm advocates of HR software here at Access PeopleHR, we understand that the decision to invest in any SaaS application is not something to be taken lightly – especially in today’s economic climate. You may not be ready for HR software if you do not have the resources in place to accommodate this change.  

If you are at the stage where you’re researching and shortlisting HR software providers, you may find our recent post on how to compare HR software useful in your decision-making.  

If you’re interested in learning about how Access PeopleHR works, you can arrange a free demo at any time. We’re always happy to provide helpful guidance – even if you decide we’re not a good fit for each other.

Rich Newsome
By Rich Newsome Digital Content Writer

Rich is a content writer at Access PeopleHR and has a wealth of experience within the tech space, including HR software. Passionate about providing website visitors with informative and easy-to-understand content, Rich is committed to helping SMBs find the best solutions for their needs. With a flair for writing, Rich's content engages and educates readers, guiding them towards informed decisions.

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