Three consequences of miscalculating your cloud HRMS ROI

A cloud HRMS can provide many advantages to your company and cost effectiveness is often highlighted as a key benefit. Yet while a cloud HRMS can do many things it won't solve all of your company's problems by itself. That doesn't make it a waste of money - instead it is essential to manage expectations in order to create a positive user experience. Here are key areas to keep an eye on to ensure your team isn’t setting too demanding an ROI for your cloud HRMS.

1. Expecting an HRMS to replace the HR department’s skills

A cloud HRMS can provide value through automation and laying a foundation for HR best practices through streamlining workflows and providing analysis based on data gathered in real time. Whilst this can make your company’s HR processes more efficient, but it cannot be a substitute for the strengths of a skilled HR professional, such as soft skills and the knowledge of how to coach staff to their fullest potential.

Recommended reading: calculate the ROI of you cloud HRMS as accurately as possible using our five-step guide to calculating HRMS ROI

Anyone who expects that an HRMS will replace an HR department will be disappointed with the ROI it offers, and productivity may be impacted as overly-optimistic targets are missed. An HRMS needs to be used correctly, as a tool for HR professionals to improve efficiency in business operations and to provide insight for management decision making via data analytics.

2. Thinking that implementing an HRMS will solve all HR's problems

The fastest way to create disappointment and mistrust of an HRMS is to sell it as a panacea or cure-all for all HR-related business issues. An HRMS can provide value in many situations but it is an unrealistic proposition to expect that it can provide a solution for every concern.

They key is to distinguish where the HRMS can provide improvements and to use it in those scenarios. If your onboarding process is disjointed and does not flow well due to poor design, replicating this process with new software will not solve anything. It is only through planning robust processes and streamlining activities via appropriate resources and then configuring and managing these processes in the cloud HRMS that you can bring benefits and the expected ROI to users.

3. Allowing time for change management

A cloud solution is a chance to have a fresh beginning with the latest technology. Most SaaS HRMS come with a framework of various HR processes such as recruitment, the merit cycle, and succession planning. It is often an advantage to implement these best practices, but it may be a challenge if your company is used to a different style or more traditional way of delivering HR.

In these situations, your HR team may feel that the HRMS is not delivering the expected returns when in reality the weakness is in the change management activities. A best practice we’ve seen when you are undergoing a transformation due to a move to a cloud HRMS is to have a dedicated change management resource or team to facilitate the transition to the new solution.