Comparing SaaS vs. On-Premise HR Systems

November 29, 2021

With more organizations moving critical HR processes to the cloud, many organizations are beginning to experience the transformative impact and flexibility offered by cloud-based solutions. For companies still considering cloud migration, here’s an explainer on the key differences between a cloud-based HCM solution and an on-premise one.

Key Differences Between On-Premise vs SaaS HCM System

Efficiency and Productivity

11 to 19 months average to implement and go live with an on-premise HR management system 7 to 14 months average to implement a licensed cloud HR management system
Customizations, system upgrades and testing dependent on IT resources, requiring on-site staff Automatic upgrades upon connection, provided by vendor, who manages data center maintenance and security
Average time-to-hire of 62 days Average time-to-hire of 40 days, a 35% improvement
Time to productivity for new employees depends upon availability of manager and colleagues 10-20% reduction in time to productivity for new hires or internal transfers


Capital expenditures on data center equipment with depreciating value, making it a bad investment Operating expense model using only the cloud storage that you need each month
Substantial costs for recruiting and onboarding new employees due to manual processes 50% reduction in recruiting and onboarding with an integrated cloud HCM solution
Expensively inefficient due to paper-based and manual systems of record such as spreadsheets Several million dollars savings in paid overtime due to improved analytics and role-based dashboards
Tech support needed to maintain data center and necessary upgrades Cloud provider owns the maintenance burden, so you can reduce IT headcount and assign them to business-critical tasks

New Technologies

A Cloud HCM system lets you integrate new capabilities with less complexity than on-premise configurations.

Mobility: Recruiting capabilities for devices can result in better candidates, while on-the-go access for hiring managers can accelerate time-to-hire.

Adaptive Intelligence: Utilizing AI can enhance employee self-service for higher satisfaction, while the Internet of Things (IoT) can keep you alerted in real time.

Social: Be more strategic and competitive with social sourcing that can net the most qualified candidate referrals, for any region or department.


Predictive analytics helps you identify problems before they impact business. Workforce trends and benchmarks are available in real time, so management can make better decisions.

Chief HR Officer

  • Boost leadership alignment at all levels
  • Develop competitive talent strategies to enable sustainable growth
  • Better understand workforce health and composition

Finance/Business Leader

  • Manage headcount cost to budget
  • Optimize talent sourcing based on vendor, channel, and candidate performance
  • Increase retention of the top performers

HR Manager

  • Support strategic planning and problem-solving
  • Track key metrics in headcount demographics and movement
  • Monitor and optimize cost and efficiency of HR programs

Cloud Benefits by Area

Performance/Succession Management: Employee time managing and administering performance, goals, and succession improve by 20-30%.

Compensation: Risks associated with errors in manual calculations, including over or under payments, reduced by 40-80%.

Core HR: With more automation and self-service, productivity and efficiency increase by 30–45%.

Reporting: Centralized data and analytics boost efficiency by 25–50%.

Payroll: Automating and integrating payroll processes improve payroll service by 40-60%.

Benefits: Simplified processes, integrations, and improved reporting show an increase in opportunities by 20-30%.

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