If you’re looking to let your your inner nerd go wild and learn everything there is to know about modern day software options, then bam – you are in the right place! This blog will immerse that inner nerd into the world of comparing SaaS vs On premise HR software. Oh, and we threw in-house HR software into the comparison too, but please, do NOT go there!
If you find yourself reading this blog, perhaps someone has asked you a question about it and you are after some basic facts. So let’s gets SaaS -y!
Quick hint – if you are a small or medium sized business – in the battle between SaaS vs On premise HR software, SaaS HR software should be the absolute clear winner!
What is SaaS HR software?
SaaS is an abbreviation for ‘Software as a Service’. HR software as a service options are subscription based software solutions that you pay for in an ongoing basis, such as monthly or annually. Some companies make you sign a contract and some let you cancel at any time. The data gets stored in the “cloud,” which basically means your data gets stored on the software providers servers. Just like Netflix – you pay a subscription, and you can access the software and its content form the providers servers – no need to store it on your own device. Because that data is stored off-site, you use the internet to access it. This means you can access the data from any device with a web-browser and any location that has internet service.
Advantages to Using HR Software as a Service software:
We will explore quite a few advantage to SaaS below.
Faster, hassle-free setup. There’s no need to design or install the software manually. SaaS HR platforms are ready to go out of the box, with minimal involvement from your internal IT team.
Automatic updates and maintenance. Your vendor handles all software maintenance, security patches, and feature rollouts keeping your system up-to-date with the latest innovations, including AI-powered features and regulatory compliance tools.
Seamless remote and hybrid work. With your data securely stored in the cloud, HR teams and managers can access the system from anywhere. Whether you’re working from home, on a job site, or dealing with travel disruptions, you can still manage payroll, approvals, and employee records in real time.
Continuous improvements at no extra cost. Cloud-based HR platforms frequently release updates, enhancements, and new features without additional charges. This approach reduces the risk of software obsolescence and eliminates the need for repeated budget approvals tied to version upgrades.
Flexible scaling and plan changes. Switching plans or adding features is simple and doesn’t require system reinstallations or downtime ideal for growing teams or shifting business needs.
Predictable, usage-based pricing. Most SaaS HR providers offer pricing models based on employee headcount or feature usage, making it easier to align costs with business size and needs.
Disaster recovery and data security. Cloud providers maintain data on secure, remote servers with robust backup and disaster recovery protocols. Even in the event of a cyberattack, natural disaster, or equipment failure at your physical office, your HR data remains safe and accessible.
Learn more about HR software today
Whether you would like to browse features and benefits, or start a free trial – start exploring how you can streamline your HR and ignite culture today.
Human Resource Management SoftwareDisadvantages to Using SaaS software:
Limited customisation, though less of a concern now. Since you didn’t build the software from scratch, it may not be fully tailored to your unique workflows. However, most modern SaaS platforms now offer highly configurable settings, modular add-ons, and low-code customisation options that significantly reduce this gap.
Integration with legacy systems can still be tricky. While integration capabilities have improved, some older internal systems may not play well with modern SaaS platforms especially if their APIs are outdated or poorly documented. This can require additional middleware or IT resources to bridge the gap. Ensure you pick Next-Gen HR software to avoid issues.
Dependence on internet connectivity and vendor uptime. SaaS access depends on a stable internet connection and the vendor’s uptime. Though most providers now guarantee 99.9%+ availability and offline modes are becoming more common, disruptions can still occur due to service outages, scheduled maintenance, or local connectivity issues.
Vendor dependency and business continuity risks. If the SaaS provider discontinues its service, changes its terms, or goes out of business, your access and data could be at risk. Many businesses mitigate this by prioritising vendors with strong SLAs, transparent data export policies, and business continuity plans.
What is On-Premise HR Software?
Software hosted onsite at the business is considered ‘On premise‘ software. This means your company will need to build a server to host the data, install the software, and then maintain it. As a result, your IT department handles the updating, maintenance, and overall support required to operate the software. Typically with this approach to software, you have to pay for and reinstall new versions with updates. Should you choose not to and stay with the version you purchased, what often happens is the software company stops supporting your version after a certain period of time.
Advantages to On-Premise Software:
- Data kept on your servers which, with a dedicated and skilled IT department, can make it more secure than a SaaS solution – primarily because you can go as far with security as you like. This can be important depending on the country or industry you’re in, and your compliance requirements for data hosting.
Disadvantages to On-Premise Software:
- With on premise software, you are at the mercy of your IT department. If they are understaffed, inexperienced, or have other projects they view as bigger priorities, you’ll often be left fending for yourself and worse case scenario, having an unresolved issue preventing you from using the software.
- Implementation takes longer simply because of the setup required on your end.
- Customisations and upgrades are expensive because you’re changing the code to the actual software.
- You have to purchase more licenses to add users.
- Usage is limited to the machine the software is installed on – limiting your ability to work remotely.
- The data located on your company’s servers, which means if they crash, your data is lost.
- Additional fees apply to diagnosing and fixing the software should something go wrong.
What is In-house Hr Software?
In-house HR Software is entirely designed and built by your company. Your company designs the screens, workflows, reports – everything. This solution is built from the ground up by either your company’s development team or a hired third party. This is often perceived to be a less expensive option to SaaS or on premise, but IT IS NOT! Budgets often do not account for the man-hours required to plan, create, test, maintain, and update the software. And worst of all, these solutions are hard coded – which means once they are created, they are very rigid (can only be modified by developers). Much like On-Premise software, the data is housed on your own servers.
Advantages to In-house Software
- You have complete control over the software, its features, its functionality, its customisations from the outset.
- Your company owns the code.
- The software is tailored to your business needs.
Disadvantages to In-house Software
- The man-hours required to build a system from scratch. HR will have to submit specifications, screen designs, system edits, and reporting requirements. Development will have to create the software and test it for bugs, and IT will have to maintain it and provide full-time support.
- While the software is designed especially for your business, it is never right on the first run. Any changes or updates needed in the future will be dependent on your development team’s availability. If the software isn’t a priority for IT then you will be stuck with a system no one can use.
- On-going training falls to HR and IT, eating up even more of your time and resources.
- Changes the could affect the usability of in-house software: new versions of operating systems and back-end applications, changing business needs, and integration with other applications.
Conclusion: SaaS vs On premise HR software
If you are a small or medium sized business – in the battle betweenSaaS vs On premise HR software, SaaS HR software should be the absolute clear winner!
