SaaS payroll and HR solutions

On-premise payroll and HR systems that are disparate or outdated may increase administrative burdens, are often expensive to maintain and likely won’t properly support compliance. Employers facing these challenges may want to consider software as a service (SaaS). It combines payroll, HR and compliance expertise with the most innovative, cloud-based technology to improve efficiency and help save time and money.

What is software as a service payroll?

Payroll SaaS enables organizations to leverage best-in-class technology and support, while reducing the need to reallocate in-house resources. With this subscription-based service, employers can run payroll from anywhere, anytime, and improve the employee experience via self-service tools. Workers can update their personal records, request paid time-off (PTO), change bank account information for direct deposit, update tax forms and request feedback from managers.

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SaaS payroll solutions vs. local payroll systems

When SaaS was in its infancy, the concept of storing HR data in the cloud was an uncertain prospect for many organizations and raised legitimate security questions. What would prevent snooping on personal information? Would cloud computing accelerate identity theft? Would organizations be able to spy on each other's information?

These concerns have largely been addressed by standards, such as ISO 27002 or the Cloud Control Matrix from the Cloud Security Alliance (CSA), which recommends best practices for data security, privacy and reliability.

Additionally, safeguarding data in on-premise systems is not necessarily any easier compared to SaaS, especially if there’s a lack of integration because fractured data gives hackers multiple attack avenues. It can even be argued that a SaaS vendor can do a better job of maintaining security vs. on-premise systems because it can afford cyber security tools, monitoring and personnel that many clients cannot.

How to choose SaaS payroll software

While safeguarding sensitive information is paramount, choosing the right SaaS payroll provider goes beyond data security. Employers may want to ensure their payroll platform is also capable of the following:

• Simplifies payroll and makes paying employees faster and easier than ever before.
• Allows payroll to be processed online or from a mobile device in minutes.
• Automatically calculates, deducts and pays taxes for employers and their employees.
• Offers the support profile the business requires, such as 24/7 access.
• Integrates with related functions, like time and attendance, to minimize data entry errors.

Benefits of using payroll SaaS solutions

The primary benefit of using a payroll and HR management SaaS is that it automates labor-intensive administrative processes, saving employers valuable time. Other advantages include:

• Data centralization – SaaS payroll integrates multiple data sources in the cloud, which may help employers comply with changing regulatory and reporting requirements.
• Integration – Interconnecting data between payroll, HR, benefits, time and attendance and other critical functions improves accuracy and efficiency.
• Employee self-service – Employees may be able to securely view and update payroll data and personal information at their convenience.
• Cost control – SaaS helps businesses avoid the costs of purchasing and maintaining on-premise hardware.
• Speed – Payroll and HR data in the cloud can be shared and analyzed quickly so employers have actionable information at their fingertips.
• Security – Multiple levels of redundancy, mutual authentication, firewalls and application programming interface (API) access may be available with SaaS.
• Scalability – SaaS payroll and HR commonly update automatically and can adapt to a business’s evolving needs.
• Availability – SaaS is available on demand, which means employers always have access to payroll and HR resources, even if there are local business disruptions.

FAQs about payroll and HR software as a service

Trusha Palkhiwala Divisional Vice President, Global HR Shared Services, ADP Trusha ensures Global HR Shared Services delivers service excellence through digital transformation, focus on client service excellence, continuous improvement programs and global simplification projects.

This article is intended to be used as a starting point in analyzing SaaS HR payroll and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.