How the Cloud Is Transforming the HR Industry

how the cloud is transforming the hr industry

Cloud technology is transforming the way nearly every industry in the world operates. It allows companies to connect business-to-business and business-to-consumer between coasts and across continents. As a result, the ability to do business from anywhere in the world with anyone in the world is an option for nearly any business choosing to embrace the technology available to them.

How the Cloud Is Transforming the HR Industry

Human resource management companies, which assist companies in ma  naging their employees, are one of the industries that has embraced cloud technology and its capabilities. The opportunities and possibilities are endless for HR companies who take on this technology and use it to its full potential to better serve their clients and build their client base with advanced capabilities. Here are several ways in which the cloud has transformed the HR industry:


Using the cloud has virtually eliminated paperwork for companies and drastically reduced manual processing needs and time. With the cloud, all of the data is stored digitally, can be accessed anywhere, and updates in real-time. This means no more paper, fewer file cabinets, and more physical space freed up. Because the cloud is virtually limitless, companies who offer outsourced HR services to other companies can increase their capacity to take on more clients than ever before. With this growth comes the need for staff to manage the platforms and offer advice to clients; this is leading to companies expanding their workforce in order to accommodate. And, because there is less need for storage space, there is more room to hire the staff needed to provide these services. With more room comes more capacity to take on more clients. Both virtually and physically, the cloud is helping HR companies increase capacity and take on more clients, thus growing their businesses.


With the cloud, HR companies can now serve nearly any business with an internet connection. The limits to what they can do depend on what they want to do. Some companies have been able to take their HR services globally because, with the cloud, they see potential in being able to offer their services to businesses in other countries and be able to meet their needs. As long as a business wants to learn and train on the HR compliance laws of another country, they can provide services to anyone, anywhere. Additionally, the cloud is helping companies connect more efficiently with their clients who are close to home as well. With the cloud and the ability to apply updates in real-time, HR companies can send data and view reports with their clients from across town or across the state. Less time is spent gathering and compiling information in a readable format because it is saved digitally and can be accessed by the client whenever they need it.


In a way, the cloud has made outsourcing to a human capital management solutions firm a more viable option than ever, because the service they provide can be seen as efficient and effective compared to a small or mid-sized business trying to manage their human capital on their own. Having a dedicated partner in managing HR can alleviate much of the stress and burden that an in-house HR department faces on a daily basis. Whether they are processing payroll, managing open enrollment, juggling onboarding and recruitment, or any other challenge in the myriad of HR tasks, an internal HR professional can struggle to keep up with the changing compliance landscape or have time to work on improving HR strategies for their company if they are only able to complete the day-to-day work. While it can be a challenge to go it alone, many have not seen the benefit to outsourcing due to concerns about cost and lead time working with an external provider. However, with the cloud, HR companies can act like a backdoor agency, in a way, for the internal HR department at a company. The cloud allows the HR provider to interact virtually and seamlessly with the client to illustrate challenges and solutions, provide updates on compliance requirements, and offer a third-party perspective, often without the physical barriers that once existed between and HR company and their client. When this stress is removed from a business owner or an internal HR professional, they can work on strategies to improve the company and its processes, rather than spending all their time plowing through HR work.


As mentioned, one of the biggest struggles an internal HR department or business owner can face is dealing with changing HR law and compliance. The cloud allows HR providers to send automatic updates to the client as well as guides and resources to help them understand the new law, how it affects them, and to update their system in a timely and efficient manner. This provides a semblance of consistency for the business in their HR compliance reporting requirements. When they have the latest and most accurate data and calculations for their business’s needs, they don’t have to worry about missing an update and reporting or filing an incorrect amount in their payroll tax payments. The cloud helps owners and providers alike, manage these changes and execute adjustments on time.

The cloud is here to stay, and virtually every company can find some way for it to benefit their operations or how they serve their clients whether they are business-to-business or business-to-consumer. HR providers are no different, and it has completely changed the way they can market their services to potential clients. The cloud opens up a whole new world of capacity, connectivity, clarity and consistency for the provider and for their relationship with the client.

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Natalie Hoffman

Natalie Hoffman is the president of leading payroll service company HK Payroll Services, Inc. (HKP) and partner at Honkamp Krueger & Co., P.C. (HK). With over 30 years of experience in her field, Natalie has written for several publications on the topics of business, accounting and payroll technologies.

Reader Interactions


  1. Beth says

    The Four C’s! I like this article a lot! Cloud-based recruitment software has definitely come a long way from the antiquated, clunky ones of the past (I won’t name names haha). It’s not worth it anymore to look at market share to determine your next software purchase. The tech market moves so quickly, if you do that, you’ll already be ages behind. The early adopters will have already moved on. Look at the up and coming tech, as well as ones that have done well recently. I recommend checking out Recruitee as far as cloud-based ATS go:

    Thanks for sharing!


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