SaaS vs On premise HR software
SaaS vs On premise HR software

4 minutes read

SaaS vs On premise HR software
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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.

  • Shorter setup time. You don’t need to design and build the solution yourself, and you aren’t reliant on your IT department creating or installing the solution onto local hard drives or servers.
  • The vendor does the leg work maintaining and updating your software.
  • Data stored on the cloud gives you the ability to work remotely. If you need to take care of a sick child, go to an offsite meeting, or can’t come to the office due to inclement weather, you can still get work done. Also, managers working on a jobsite can easily access important employee information, like emergency contact details.
  • Software updates are rolled out at no additional cost to you. This ‘future proofs’ your solution degree. No need for constant budget approvals whenever a new version gets released (á la installed software) or being left with an outdated, unsupported version that becomes obsolete.
  • Changing to a new package or plan doesn’t require a complete installation of the system.
  • Cost is typically based off employee headcount because the necessary data storage and customer support will change as your company increases.
  • The vendor manages the data on remote servers, which means if disaster strikes your office, the data is not lost. 

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 Software

Disadvantages to Using SaaS software: 

  • You didn’t build it. Therefore SaaS software is considered to be less tailored to your specific needs. These days, that is becoming less of a problem as software becomes more configurable.
  • Full integration into legacy systems can be challenging if their APIs are not up to scratch.
  • Your access to the software can be disrupted due to a faulty internet connection, vendor maintenance, and the vendor going out of business.

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!

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