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Micah Fairchild 4 Reasons to Leverage Cloud-based Recruitment Software

4 stars Average rating: 4 (from 37 votes)
 By Kazim Ladimeji

Strategic Advantages of "Cloud" Recruiting Software

With an annual growth rate of 14.5% (according to Technavio Insights), recruitment software is booming—especially in the U.S. which accounts for nearly 50% of the market's development. The global war on talent deserves the lion's share of the credit for this boon, as companies are realizing that continued success largely rests on the ability to attract and retain top talent. Indeed, it has become quite clear that a competitive edge in this process can mean the difference between a mediocre and a stellar hire; and companies are leveraging every available tool they can to get a leg up on the competition. More times than not, that means looking for and leveraging recruitment software that is agile, scalable, and cost effective—a combination most often found in the "cloud".

Cloud-based HR software (also commonly referred to as Software as a Service or SaaS) is human resources (in this case recruiting) software that allows data and services to be accessed remotely through a web-browser; without the need to install and manage application software on local machines. Typically, working on a pay-for use basis (or as a subscription pricing model based on user counts or usage metrics), HR SaaS is rapidly becoming a go-to deployment model that easily differentiates itself from the traditional "licensed" model. Indeed, especially as it pertains to the function of recruitment, the HR software market shows 111 Recruitment SaaS offerings out of 234 total software systems—an impressive statistic to be sure.

And yet many companies are still experiencing trepidation at the adoption of this type of HR software, along with common questions that range from viability to reliability. Most recruitment software has a multitude of sophisticated features that can deliver needed functionality (e.g. applicant tracking systems, mobile recruitment, etc.) so why has emphasis shifted to cloud-based systems? Well, aside from what we've just mentioned, delivering software as a service can bring numerous additional advantages. Here's our quick list of the top four.

1) Cloud Recruitment Software = Increased Pace of Innovation

The very nature of the cloud means that SaaS customers are using the most up to date version of the recruiting software, and updates containing new features and enhancements are often available to customers multiple times per year. For example, Workday has 3 releases per annum while many other cloud HR software vendors deliver new versions seasonally or semi-annually. This is a big step forward from the prior traditional licensed model which typically delivered new versions about every two years. Further, in the multi-tenant architecture that true cloud software operates, all users are on the same system (or instance) release, so you will not have the issue of multiple and sometimes incompatible versions of the same software nor will you have to endure the planning and costs involved with implementing fork lift upgrades. While some HR software companies "force" updates, for the most part, all subscribing customers are put on to the latest release version simultaneously and given the option of "turning on" the updates when they are ready.

2) Cloud Recruitment Software = SMB Gold

Estimates from a recent Gartner survey suggest that 40% of the cloud-based software market is dedicated to small and medium-sized businesses (SMBs). This on-demand deployment model is especially appealing to the mid-market organization because a cloud-based system has the benefit of an easy installation process which typically doesn't require the business to have an IT team or on-site servers. Users simply need a computer with a web browser and internet access to be able to leverage all the HR system's features. This makes the model highly advantageous to smaller enterprises that have limited IT resources, infrastructure and technical know-how. It also speeds the implementation process thereby accelerating time to value.

3) Cloud Recruitment Software = Business Agility

As we mentioned earlier, SaaS systems operate according to a variable subscription model. This allows organizations to leverage the software based on actual levels of usage. This is not only a cost-savings against the licensed software alternative (which tends to involve functionality which may not be fully utilized right away or throughout the term of the contract) but also a time savings in terms of training and implementation. Similarly, SaaS HR systems do not require IT shops to invest in hardware and other IT infrastructure in advance just in case the company may add more users or need extra processing power. SaaS HR and recruitment systems variable pricing model can better correlate to changing business needs by permitting companies to dial-up or dial-down their user counts on demand. Cloud-based recruitment software means you use what you need when you need it.

4) Cloud Recruitment Software = Lower (Initial) Cost

Though debate still rages on about the Total Cost of Ownership (TCO) of licensed software versus SaaS subscriptions, one thing is known for sure about the SaaS option—the cost to initially implement it is significantly lower than the traditional licensed software model. In large part, the reason for this is that it's a "rent vs. buy" model, and no software ownership is transferred when a customer subscribes to the software offering. However, of equal significance is the fact that no additional hardware, software or IT resources are needed to implement a SaaS solution. A recent article by Datamation highlights this, finding that SaaS systems enable users to save money by divorcing the customer from the need to "pay for the servers, ancillary software, third-party consultants or in-house support staff to keep [the software] up and running." No up front capital expenditures, faster deployments and fewer if any needed IT resources generally deliver big savings.

Bottom Line for Cloud Recruiting Software

In summary, cloud recruiting software has the advantages of allowing organizations (especially SMBs) to work in way that can be more cost effective and flexible without sacrificing software feature sets, flexibility or continuous innovations. Further, by leveraging already existing hardware and software from the vendor, implementations can often happen faster by having appropriate resources dedicated when and where they are needed. These advantages, coupled with an increasingly large number of cloud-based options for recruiting software (including public sector alternatives such as Neogov e-recruitment software), are helping to redefine how organizations deploy and utilize their HR function. While reticence to adopt this new software model is certainly understandable, companies must also understand that every second counts in the war for talent—and every tool does as well. End

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Though debate still rages on about the Total Cost of Ownership (TCO) of licensed versus SaaS deployment models, one thing is known for sure about the SaaS option—the cost to initially implement is significantly lower than the traditional model."

 

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