Posted in Cloud Computing, Cloud Governance, Cloud Management

5 Flashing Signs your Startup needs a Cloud HRMS Solution

Even though startups may come as natural transgressors for many, HR and payroll is one key area where a startup simply cannot afford to break the rules. Today, owners of startups ought to come up with novel and cutting-edge ideas to stay ahead of the curve whilst ensuring to abide by the payroll and HR regulations.

Businesses that fail to abide by HR laws and compliances invite stern legal and financial consequences or penalties.In fact, some consequences may even throw an entire business off the track. Having said that, here are five big, neon and flashing signs a startup needs a cloud HRMS solution.

  1. Consolidating personal and business finances

It might sound a pointless thing for a startup to have a business bank account during its initial days of operations.The reason being that a startup in its initial days seldom makes any profits and for most of the entrepreneurs, it is simply senseless to pretend that they are paying their staff with company profits and not from their own pockets. This can trigger some severe consequences in long run and thus, a startup ought to separate its expenses eventually.

Now if the startup is sued or audited, then the hazy discrepancy of personal and business finances can make the entrepreneur’s personal assets vulnerable to the court. Making it worse, the startup might even lose its corporate. Unfortunately, most of the startup entrepreneurs are of the notion that this won’t happen to them, which is often not the case.

Hence, the best resort to keeping away from such legal hassles in such unfortunate incidents is to have a cloud based payroll software in place to pay your employees accurately and on time.

  1. Referring employees as independent personnel

One of the severest blunders that startups commit these days is that they misclassify their employees as independent personnel when the fact is that they need to be legally inferred to as employees only. The primary reasons for doing so is that they do not have to pay for taxes, overtime and insurance for independent workers.

This is a common thing among startups, since most of the entrepreneurs preach the practice of “trying before buying” hiring technique. It is one of the gravest human resources management blunders leading to increased employee turnover.

Nonetheless, if you still refer your employees as independent personnel, then it is always advisable to have an automated cloud HRMS solution or a SaaS and cloud based payroll software to help distinguish independent contractor and payroll benefits.

  1. Managing payroll and compliance with spreadsheets

Payroll without a doubt is the trickiest and intricate process and most of the startups that use spreadsheets tend to screw it only to invite expensive penalties. Thus, an increasing number of businesses are turning to automated cloud based payroll software.

Nevertheless, businesses do require complying with employment insurance, healthcare, compensation, etc. without fail. Not to forget, compliance related overheads tend to escalate quite fast.

This is the reason why several tech-based startups prefer to have cloud HRMS solutions rather than relying on spreadsheets for carrying out payroll and other HR chores.

  1. Under or over paying employees

With the competition turning more and more volatile for startups, it is challenging to hire and retain top talents. This calls for offering exciting benefits to the employees.

Cloud based payroll software turns out to be a great saviour here, since it makes computing employee benefits across a number of departments a real quick and easy. Cloud HRMS solution comes with amazing automation functionalities to help you compute accurate figures to be offered as benefits paving way for error and redundant free benefit payouts. Further, it eliminates the tiresome paperwork and filing that goes into administering employee benefits for an HR department saving them efforts and time.

  1. Tormenting employees with heaps of paperwork

No one loves paperwork and it is not an exception with startups. Unfortunately, an alarming number of businesses are still stuck in ice-age by using obsolete HR techniques or tools.

Gone are days when an HR department has to ask employees to fill out forms and then fax or email it back. Businesses today are increasingly turning to cloud HRMS solutions to automate key HR processes making lives easier for both employees as well as HR personnel. Most importantly, it’s all paperless and remember, the less the paperwork, less the hassle.


These are five neon, big, flashing signs a startup needs to get rid of legacy HR practices or tools and embrace cloud based payroll software to stay ahead in the race.


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