HRM software, focusing on automation and strategic resources planning, has become vital to many businesses. We see enterprises use it to manage thousands of employees, as do mid-sized companies. Then, where do small businesses fall in? At which point of growth should you consider using HR tools? Which is the best HR software for small businesses?
How to Tell if Your Small Business Need a HR Software
Despite thousands of HR solutions, from SaaS to customized ones, most small businesses still rely on spreadsheets and paperwork. This all boils down to cost.
The average price is $5 to $20 per month per user, with a monthly base fee ranging from $40 to $100. This can be a heavy payment for a small business (assuming they have under 100 employees and less than $50 million in revenue)
I understand you will need careful evaluation before any investment. Here are some questions to determine whether your small businesses need an HR system.
1. How Much Time do You Devote to Manual HR Tasks?
If your HR personnel spend significant time (more than 60%) manually handling paperwork, data entry, reports, and payroll, it might be time for HR software.
Especially for payroll, 69% of SMBs agreed that HR software fastens their processing, freeing time for more strategic HR responsibilities.
2. Is Compliance a Concern?
If keeping up with employment laws and regulations is difficult or burdensome, small business HR software can help you stay on top with features like compliance tracking and document management.
3. How Often do You Have Staff Turnover?
A high number (above 20%) indicates that employees are dissatisfied with your company. There’re many indicators, such as unattractive C&B, poor employee experience, slow response to employee needs, and ineffective management. HR software can assist you in identifying issues and improving them.
4. How Hard is it to Get Data on Your Workforce?
If you’re having trouble making data-driven decisions about your staff, HR software can give analytics and reporting to help you detect patterns, measure performance, and make informed employee decisions.
5. Do Your Staff Members Feel Informed and Supported?
If you want to improve your employees’ experience, HR software may give them access to self-service tools like benefits registration and time-off requests, helping them feel more in charge of their work lives.
KEY TAKEAWAY |
---|
While these tools can help enterprises deal with complex issues and strategic planning, HR software for small businesses mainly brings these benefits: 1. Reduce manual tasks and automate workflow 2. Bring real-time data analytics to the table. 3. Improve employee experiences by engaging them with your company. Most small businesses focus on optimizing their internal operation while expanding their teams with the right people. Therefore, an all-around HRM tool with diverse functions is more suitable than a specialized one. |
Curated HR Software Shortlist & Comparison
In this comparison, we will look into why certain HR software is a good solution for small business. Here’re what to consider:
- Cost: It must be effective for a limited budget, free is ideal but not necessary.
- Function: Cover basic HR tasks, providing a wide range of automation features for recruitment, payroll, on/offboarding.
- Accessibility: Easy to navigate for admins (HR executives) and offer mobile app/ self-services tool for employees.
- Scalability: Can grow along with your company for 3 to 5 years.
Rate | Pricing | Free Trial | Best for (*) | |
BambooHR | 4.4/ 5 | From $7/user/month | Yes | Recruitment & employee engagement |
Gusto | 4.5/ 5 | From $40/month | Payroll only | Payroll |
Dynamic 365 HRM | 4.7/ 5 | From $4 to $120/user/month | No | HR analytics & Core HR |
Rippling | 4.8/ 5 | From $8/user/month | No | Basic HRM & IT support |
HeyTaco | 4.8/ 5 | $3/user/month | Yes | Employee Recognition |
Paychex | 4.2/ 5 | From $39/month | No | Payroll & Regulatory |
Deel | 4.8/ 5 | From $49/month | Free for team under 200 people | For Startups & Remote teams |
Trinet | 4.0/ 5 | From $8/user/month | Depend on modules | Core HR for SMB |
Paycor | 3.9/ 5 | Contact the vendor, offer plan for under 50 employees. | Yes | Core HR for SMB |
For more information on the features, pros & cons of using these tools, click their name on the table to jump to the section!
(*) All of these tools can cover most of your HR needs and processes; however, these are the modules they excel in/ best known for.
Break Down of the Top HR Software for SMB
1. BambooHR
Noticing siloed systems, disorganized employee data, and disconnected workflows create painful processes and add extra work hours, Bamboo HR started their journey by building an all-in-one solution. They cover many HR functions, from HR data & reporting, hiring & onboarding, and employee experience to payroll.
Many well-known consultants have awarded Bamboo HR as the top player in HR software for small businesses, attracting 30,000+ clients worldwide.
Some of the top features that their clients adore:
- Pre-built workflows that you can instantly automate your HR process.
- Web and mobile apps that allow employees to access their pay slips, timesheets, personal data, performance reviews, submit requests, and training library (if your business offers one).
- Excel in recruitment, BambooHR offers a robust applicant tracking system (ATS) on web and mobile, email automation, and integration with job boards such as Indeed, Glassdoor, and Linkedin.
- Thanks to automation and a knowledge hub, a seamless onboarding process ensures your new hires feel the most welcomed.
- Survey, in-depth analytics, eNPS and sentiment tool that evaluate your workplace and employee’s health.
- Simplify payroll, time tracking, and benefit management.
2. Gusto
Known as a leading payroll vendor, Gusto processes tens of billions of dollars each year and serves over 300,000 businesses nationally. This HR software mainly provides exclusive service to W-2 employees in the United States for local and foreign contractors, but they can still support other regions in automating simple payroll. This module is Employer of Record (EOR), where you can hire, manage, and pay global staff in their native currency.
Furthermore, they automatically file your taxes, assist with compliance, and uncover tax credits to help you accurately calculate C&B. Other features such as workers’ compensation, time tracking, PTO (paid time off), and health insurance are also integrated as well.
Features that the client loves about Gusto:
- Employees can update their personal information on their own devices via e-signature, which reduces the need for manual documentation.
- Customizable offer letters and onboard checklists for new employees.
- Other functions in talent management, hiring and HR reporting.
- The best part about Gusto is that no long-term contracts or set-up expenses are required. Their pricing is straightforward. Gusto provides a low-cost, basic plan, making it accessible to small businesses. The Premium package is a suggested option for SMBs with smaller HR departments and more financial capacity to invest in human resources efficiently.
3. Microsoft Dynamic 365 HRM
Being a tech giant, Microsoft has surely proven their expertise in dealing with simple to complex business challenges.
As a part of the comprehensive business package – Dynamics 365 – Microsoft’s HRM module sure stands out with robust HR analytics capabilities. They leverage AI and data analytics to provide you meaningful insights on workforce data and employee performance.
But that isn’t the only thing. Here’re some of the many features that people love:
- Recruitment hub that can integrate with LinkedIn Talent Solutions for talent acquisition and candidate evaluation.
- Customize your compliant programs to be adaptive to changing regulations.
- Build a flexible compensation plan and employee benefit package.
- Automate workflow with task management tool – you can build request-approval process of any kinds or use pre-built templates (including training, recruitment, performance review, offboarding, expense, OT, leave request)
- Store all your employee profiles about skills, certification and career accomplishments.
- Visualize your HR data with Power BI.
And the best part is that you can connect Dynamics 365 HRM with other Microsoft’s tools. This is a huge plus if you’re already a MS client.
You can cut down deployment fee and don’t have to integrate system back and forth. You team can access their self-services tool directly through Teams’ chat channel or you can customize your HRM to your needs by combining the HRM with Power Platform.
Using the Microsoft ecosystem, we once built robust HRM software under 8 weeks for a SMB. Learn how our Microsoft Experts did it! |
4.Rippling
Rippling is a comprehensive HR platform focused on optimizing HR operations. Its components are interconnected, so when you make changes in one, the related data in another instantly updates.
This HR software for small businesses also supports different currencies, recognizes worldwide compliance issues, and automates approval workflows to help your businesses go global.
But it doesn’t stop there. What makes Rippling different is its integration with IT support, providing you with 2-in-1 solutions. For employees, they can access both HR and IT services at the same time.
Notable features of Rippling:
- Customized approval workflows eliminate back-and-forth communication and increase team agility.
- With Rippling’s statistics, you can efficiently strategize your staffing needs based on your company’s growth trajectory.
- Employer of record (EOR) services and dynamic employee profiles are provided in 50 countries.
- Rippling’s Compliance 360 program, a technology solution, monitors wage and hour breaches, such as employee misclassifications, lowering the likelihood of labor law violations in new areas.
- Rippling’s PEO, a cloud-based human resource, can assist you in establishing leave rules, streamlining your payroll, and even providing reasonable, high-quality benefits and workers’ compensation plans for your employees.
5. HeyTaco
HeyTaco focuses on developing a stronger and happier workplace or remote team. Using this HR software, you can celebrate accomplishments, honor one another, have fun, and celebrate every milestone.
Its concept is like playing a game, where you will collect digital rewards (known as Taco) and trade them for physical presents given by your company. These tools can be handy for remote teams, as members may miss out on tiny interactions that usually happen in a regular office setting.
One of the noteworthy characteristics is:
- Peer recognition
- Custom awards: You can design custom-tailored awards for your team to redeem.
- Input surveys: Assess the health of your organization by collecting firsthand input.
- Analyze data with dashboards and reports: Evaluate interaction and identify score-giving and receiving trends and patterns.
- Integrations with Slack and Microsoft Teams.
6. Paychex
Used by 740,000 businesses worldwide, Paychex offers various HR services, including payroll, benefits administration, time and attendance tracking, and hiring. Its broad functionalities are ideal for sustaining a small business but also scalable, ensuring you do not outgrow it as your company grows.
Excel in payroll and regulation, they split their HR solutions to support as many businesses as possbile; this high level of flexibility is what client loves about Paychex:
- Payroll solution for self-employed business.
- Payroll solution for 1-19 employees.
- Payroll solution for 20-49 employees.
- Payroll solution for 50 to 1000+ employees.
Paychex’s features for small business:
- Easily enter and run payroll automatically online for exempt, non-exempt employees and contractors.
- Paychex is integrated with BambooHR, Clover, Flowtrics, GoCo, JazzHR, Oracle, QuickBooks Time, Webtimeclock, Timeero, and Xero.
- Time and attendance management that supports facial verification, biometric iris, fingerscan, and interactive voice.
- Recruitment and application tracking
- Manage an employee lifecycle from onboarding to offboarding or retirement.
7. Deel
Co-Founders Alex Bouaziz and Shuo Wang discovered a pattern among their friends: they were unable to obtain foreign professions despite being qualified due to visa hurdles and local labor restrictions. Deel was founded to make a difference by helping businesses abolish hiring borders and opening new doors for them to manage their remote team better.
That vision is why Deel has progressed beyond hiring to simplify all aspects of assembling a worldwide team. Deel HR capabilities are completely free for teams of up to 200 workers, whether they are employees or contractors. It is ranked among the best international payroll services.
Features:
- The Deel HR platform includes all necessary tools for managing personnel, from onboarding to offboarding.
- Run payroll in 150 countries with desired currency and legal experts, making sure you adhere to regulations and laws.
- Compare employee costs, such as salary, bonus, insurance, and tax rates, between regions.
- Managing time off, app provisioning, and onboarding/offboarding.
- Multiple payment alternatives (bank transfers, cryptocurrency, bitcoin, digital payment processors, and contractor cards)
8. Trinet
An all-in-one HR software for small businesses that includes simple personnel document management, payroll, benefits administration, and time tracking. TriNet has been in operation for over 30 years with approximately 23,000 clients.
9. Paycor
This comprehensive HR software serves over 40,000 businesses over the span of 30+ years. Its features include onboarding, talent acquisition, analytics, and learning and development (L&D). This makes Paycor ideal for midsize enterprises that require flexible, tactical HR functions.
Paycor’s features are adaptable enough to accommodate businesses in many industries.
- Physical time clocks to provide more precise time punching for onsite employees.
- Earned wage access (EWA) alternatives allow employees to access their earnings sooner and promote financial wellbeing.
- The risk assessment team will prepare for cybersecurity threats while monitoring and updating the system to address data vulnerabilities.
- AI-enabled advanced analytics.
- Customized overtime policies to accommodate personnel from several states, as well as any collective bargaining agreements (CBAs).
- During enrollment, a benefits expert will assist employees in selecting the best insurance plan for their needs.
- The software includes a company newsfeed and recognition modules for cross-company collaboration and public admiration.
Kind of HRM Software to Avoid
With so many choices, you can easily get lost in the sea. Especially for a small business with a limited budget, making the wrong option can double the price. Here’s something you should avoid when choosing a vendor:
A vendor that lacks employee self-service: Because the goal is to reduce time, your HR application should allow users to engage more in HR services and manage their information.
Choosing a vendor lacking customized automation: Every HR software offers automation, and the question is, to what extent. Opt for one that allows you to adjust here and there, meaning it can grow along your business and adapt to any changes.
Foregoing necessary integrations: If the decision-making process is rushed, you may end up purchasing a tool only to discover later that it does not integrate with a critical component of your technology stack.
If this is the case, it will undoubtedly lead to difficulties in the future, as a significant portion of data transfer between tools must be done manually.
Rushing implementation: Most cloud-based HR software for small firms is implemented as a self-service approach. However, hurrying can lead you down the wrong path. If data is transferred or entered incorrectly, it will result in errors such as giving admin access to the wrong team member or having the incorrect amount for someone’s salary. To avoid this, find a vendor with good customer success resources and aggressively employ them.
The “Ugly” Side of Using These HRM software for Small Business
Off-the-shelf HRM software is the best cost-effective choice for small business. But they still have some limitations and most of them can only live up to 3 or 5 years.
Here’s why:
1. Lack of flexibility in features for specialized and niche industry: HR software is usually made for commercial use, meaning that it will serve a broader need. Since it can’t meet every specific requirement, you will have to make trade-offs.
2. Limited scalability: When your business scales, your HR operations will also change. This isn’t about the number of users but also new requirements, new processes or new regulations. Most of the time, businesses realized their new demands outgrow the software’s capabilities, urging them to buy a new one.
3. Long-term costs can quickly add up: Most HR software offers payment per user. When your business scales, you will need to pay more. There are also hidden costs such as migration cost (if after a few years, you want to replace it), training cost, set up fee (some vendors will ask for this).
4. Potential of vendor lock-in: It happens when you become too reliant on your HR software, making moving away from it a challenge. Your process and operation evolve around it, data is stored on it and your executives are too reluctant to learn new tools.
One way to avoid this is customization. If your business has a very specific and niche problem, your best bet is custom software, as it reduces the chance of having to replace it after a few years. However, tailoring HRM software can take time and *lots of money*, but you can always opt for low-code – a technology that 10x your development using templates and drag-and-drop elements. Microsoft is a well-known tool for this. At Synodus, our developers excel in both low-code (Microsoft & Salesforce) and custom software. Share your idea with our experts to see which way fits you! |
Also read: How to reduce your software development cost
Wrapping Up
Most small firms take a while to realize they need HR software. They will keep a people directory in spreadsheets and manage activities such as payroll and benefit administration independently. Using HR software for small business might give you the key to getting away from this upcoming problem.
More related posts from Software Development blog blog you shouldn’t skip: