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What is cloud HCM

human resources meeting
(Image credit: Getty)

What is cloud HCM?

How does cloud HCM work?

HCM software facilitates a variety of human resource (HR) processes for companies, including recruitment, onboarding, payroll, time and attendance, benefits and retirement services, talent management, training, reporting and analytics, and compliance. Formerly a primarily administrative function, HCM now plays a key role in many of the world’s most successful businesses. 

When a software company offers a cloud HCM solution, it means both the interface and their client businesses’ data is stored on servers. It can thus be accessed from anywhere at any time, often without the need to install any special software or applications. For businesses, this means greater accessibility and flexibility for managing human resources or capital, plus all the other advantages of cloud computing, like increased security, reduced operational costs, and greater scalability.

Because all your data is stored in one place, cloud HCM solutions like Oracle Cloud HCM offer a consistent user experience and a “single source of truth,” which can help reduce errors. Additionally, cloud HCM providers can leverage all the power of cloud computing to offer advanced analytics and functions, as well as a multitude of integrations to help HCM departments work seamlessly with others, including finance, marketing, and IT.

A large number of servers

Cloud HCM providers store customer businesses’ information on robust servers. (Image credit: Manuel Geissinger)

How companies can use cloud HCM

Recruiting & talent acquisition

Managing, acting on, and drawing useful insights from recruitment pipelines can help businesses recruit more effectively and acquire better talent. Cloud HCM software can facilitate this process in a number of ways.

First, candidate experiences can be tailored to specific industries and regions, and streamlined thanks to custom workflows and powerful AI tools. One example is the digital assistant offered by Oracle Cloud HCM, which allows for self-scheduled interviews. Businesses can also leverage their data more effectively, taking advantage of intelligent recommendations and building data-driven offers. Finally, advanced reporting provides greater insight regarding engagement with recruitment campaigns. 

Cloud HCM solutions also tend to offer a variety of integrations with popular recruiting platforms. Personio, for example, integrates with LinkedIn, Indeed, Monster, GitHub, Stack Overflow, and Facebook.

Woman at a job interview with three employee

Recruiting and hiring are integral parts of HCM. (Image credit: Edmond Dantès)

Employee relations

Once hired, employees need to be onboarded and then engaged with on a regular basis. HR departments today have more and more in common with marketing departments. The present generation of workers expects more from businesses—more learning opportunities and benefits, and clearer paths for career development.

Cloud HCM software helps businesses create a competitive and attractive employee offering. It does so by providing clearer insights from employee experiences, enabling businesses to better understand their employees’ expectations and desires, opportunities for training and growth, and relationships with their managers and colleagues. It also enables businesses to better respond to grievances and dispense disciplinary action. 

Thanks to the artificial intelligence (AI) and machine learning (ML) often inherent in cloud HCM solutions, many of these complex processes can be partially or fully automated. This allows for a greater and more personalized range of HR services to be made available to employees. It also frees up time for HR departments to focus on building and maintaining relationships with your business’s greatest assets. 


More and more businesses are diversifying their employment models and including freelancers, contractors, and others to create a diverse, high-quality workforce. This has resulted in greater complexity in payroll processes, exposing employers to increased compliance risks. Cloud HCM software has the advantage of being updated regularly and frequently by providers so that compliance and payroll rules are rarely out of date. 

With more businesses looking to hire remote workers, regional payroll requirements have to be taken into consideration for a wide variety of countries and states. Cloud HCM providers tend to be active in many different countries and states, and can thus offer native payroll support globally.

Because cloud HCM solutions unite employer and employee experiences, it is easier to track presence and absence for hourly workers and projects from contractors. 

Finally, cloud HCM applications can leverage AI and ML for greater automation and more intelligent insights related to compensation and employee attrition and retention.

Features and benefits of cloud HCM

Form, calculator, and pencil

Cloud HCM solutions help streamline tax and regulatory compliance. (Image credit: Pixabay)

Cloud solutions are known for being highly scalable, and it’s no different with many cloud HCM solutions. This is true for two reasons. First, providers can leverage their flexible infrastructure to provide pricing solutions for everybody from entrepreneurs to enterprises. 

Second, automation features typical of cloud HCM SaaS enable businesses to just as easily manage 50 employees as 500, for everything from recruiting and onboarding to employee experience management and complex payroll rules.


HCM data is often highly sensitive, both for employees and employers. One widely recognized advantage of cloud computing, and by extension cloud HCM, is that cloud providers have the budget and technical know-how to provide top-tier security, including encryption for data both at rest and in transit, multi-factor authentication, and support for custom user permissions.


In addition to security concerns, the world of human capital and resources is tightly regulated—but differently so based on region, industry, and type of employee. Thus, maintaining compliance vis-à-vis one’s employees and contractors can be highly complex. At the same time, the penalties for businesses that fail to meet regulations can be steep. 

The SaaS model enables providers to continuously update rules and automations to meet compliance across any number of countries and industries, greatly reducing risk for their clients.


Smart automations are a common feature among cloud HCM providers like Oracle, Workday, and Personio. There is no shortage of customer stories and use cases where businesses have increased efficiency, reduced costs, and improved employee experiences thanks to cloud HCM. 

In addition, AI and ML features help businesses predict and more quickly respond to employee inquiries and grievances. The overall result is that HR and HCM departments are freed up to focus on providing a better, quicker, and more reliable service for businesses small and large. 


Another common thread among cloud HCM providers is the number of integrations available for the software. Many cloud HCM providers also offer other software services, like Oracle does with its unified HR and finance offering. Others support a variety of useful software integrations. 

Personaio, for example, includes integrations for Datev, Slack, Circula, Culture Amp, and Leapsome, with new integrations added daily. Workday offers an industry-standard API framework for building your own integrations. Such solutions help increase scalability, efficiency, and reliability.

The Personio integration marketplace

Personio offers a wide variety of integrations with its HCM software. (Image credit: Personio)

How much does a cloud HCM solution cost?

Cloud HCM products tend to be highly customizable, with equally variable pricing. Pricing is typically provided on a per-employee basis, rather than a per-user basis or flat rate. Below is an overview of several popular HCM solutions and their price per employee.

* Some rates are estimates only based on price calculators or customer reviews.
ProviderStarting from (per employee per month)*
SAP SuccessFactors$6.30
Oracle Cloud HCM$13.00

Small businesses looking for basic features with 10 to 15 employees can thus expect to pay anywhere from $15 to $150 per month. That said, there are free solutions available. Freshteam, for example, offers a free plan for businesses with up to 50 employees. Larger businesses with upwards of 500 employees and that require advanced features will typically fall in the range of $2000 to $3000.


Frequently asked questions about cloud HCM

What is HCM?

HCM stands for human capital management and refers to all the processes businesses use when recruiting, hiring, onboarding, managing, and offboarding employees and contract workers. 

HCM encompasses traditional human resources (HR) elements, but tends to focus more on the establishment of long-lasting, mutually beneficial relationships with employees, similar in scope and investment to customer relationship management (CRM).

Do I need HCM?

The short answer is yes. Companies need a way to manage employees and contractors, and to do so in compliance with all the related local regulations. 

A unified approach to HCM can also dramatically reduce costs, improve employee experiences (and thus engagement and productivity), and provide valuable insights into your company’s operations, making this an essential element of running a successful business.

What is the difference between HCM and HRM?

HCM stands for human capital management and HRM for human resources management. The two terms are very similar, and both refer to the management of a business’s employees and contractors. 

However, HCM goes beyond traditional HR processes like hiring and payroll with a greater focus on providing services to employees. It is also worth noting that the term “human capital” is often used to refer to the skills and capabilities of employees and underscores their contributions to businesses. 

What’s the best HCM software?

Unsurprisingly, there is no “best” HCM software, just as there is no “best” finance software or “best” CRM per se. There are a variety of solutions available for businesses that will need to be compared on a case-by-case basis. 

Take the time to explore your options and see which ones best respond to your needs, expectations, and pain points.

Main takeaways

  • Human capital management (HCM) software facilitates the process of recruiting, hiring, onboarding, training, managing, and supporting employees and contractors. 
  • Cloud HCM refers to HCM solutions where the interface and usually the data are stored “in the cloud,” that is, on servers belonging to or leased by the provider.
  • Cloud HCM software can be used to streamline processes in recruitment and talent acquisition, employee relations, and traditional HR processes like payroll.
  • Cloud HCM offers a variety of benefits for business, including increased scalability, security, compliance, efficiency, and a wide range of integrations. 
  • Pricing varies based on business needs, from basic to advanced, and is usually provided on a per-employee basis.

Further reading

Businesses looking to leverage the power of the cloud are spoiled for choice. Communications Platforms as a Service (CPaaS) solutions offer full-featured solutions for internal and external communications, while Platform as a Service (PaaS) providers enable businesses to provide custom, scalable, and highly secure desktop experiences to employees. Finally, there are a number of excellent cloud storage services for businesses.

Christian Rigg

Christian is a freelance writer and content project manager, with over six years' experience writing and leading teams in finance and technology for some of the world's largest online publishers, including TechRadar and Tom's Guide.