On-premise or cloud-based HR: which system is best?
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The two main systems for HR are on-premise and cloud-based (or Software as a Service/SaaS). The former involves a software system which is installed on premises, using your organisation’s own computers and servers. The latter is accessed through a web browser and hosted by the software vendor’s servers.

Choosing an HR system for your organisation is one of the most important decisions you will have to make as an employer. HR covers everything from recruiting new employees to organising payroll and implementing legal policies, all of which have a huge impact on whether your business runs successfully or not.

It’s important to get the right type of HR system for your business to allow things to run as smoothly as possible. Generally speaking, larger businesses are better matched to an on-premise style, while smaller businesses benefit from cloud-based HR.

We’ve put together a list of pros and cons of each to help you make the right decision.

On-premise HR: The pros


Your HR provider will likely be able to build a custom support system for your business, giving you some options for which software features you can have implemented. This will create a modular style of HR, allowing you to pick and choose aspects of the software to tailor the system to your needs.

More control

Having an on-premises HR system gives you sole ownership of your business information, meaning data security is less of a worry. An on-premise system also means maintenance and development is carried out by your own team of employees, allowing you total control over any changes or updates.

On-premise HR: The cons

Time intensive

On-premises HR will most likely take a while to install on your computers, which will slow down business temporarily. Afterwards, some hours will have to be set aside in order to thoroughly train employees on how to use the system.

Can prove costly

Since you will be hosting the HR software on your own servers, it will require a significant investment at the beginning to attain the hardware and infrastructure required. After the initial payment, an ongoing license fee will require regular outgoing costs, as well as paying an IT team to keep the system running smoothly.#

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Cloud-based HR: The pros

Immediately available

With no additional equipment to buy or programmes to install, you’ll be able to get started with cloud-based software straight away. With most options easy to use even for a non-HR specialist, training will require minimal time and effort, leaving employees free to get on with their usual tasks.

Needs fewer resources

Any help, support and maintenance required for running your software will come directly from your provider, freeing up time for your IT team and eliminating any troubleshooting hassle. In addition, most HR SaaS providers require no upfront cost to get started; just a flat monthly fee scaled according to your needs or number of employees.

Cloud-based HR: The cons

Storing data elsewhere

Despite still owning all of your company’s data, using cloud-based software means you are entrusting someone else to keep it safe for you. However, HR SaaS companies now have cutting-edge security measures in place to protect your information to the best of their abilities, minimising the risk of a data breach considerably.

Needs a steady Internet connection

Hosting HR software in the cloud means that if your Internet goes down, you won’t be able to access what you need. This could delay some processes and disrupt the smooth running of the system. However, it’s very unlikely that your Internet will go down for long, so you’ll be able to get back to business in no time.

To sum up

For larger businesses which are likely to have more money to spend on equipment and extra support, an on-premises HR system could be the easiest answer. On-premise styles can be custom built to match the needs of a large organisation, while affording more control over modification and implementation.

However, smaller businesses often benefit more from SaaS HR. The cloud-based model requires minimal resources to get started, leaving you and your employees more time to get on with usual tasks. The “anytime, anywhere” approach improves efficiency and helps to cut down on the stress that can come with running a small business.


Our cloud-based HR software is ideal for small business owners looking to save time, money and hassle. It’s easy to set up and navigate, with multiple features that can be modified to suit your business needs.

Get in touch on info@citrushr.com or give us a call on 0333 014 3888 to find out more about our easy to use HR Software.

Or start your free trial today.


The content of this blog is for general information only. Please don’t rely on it as legal or other professional advice as that is not what we intend. You can find more detail on this in our Terms of Website Use. If you require professional advice, please get in touch.

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