As a small business owner, it’s easy to neglect HR. It’s not as exciting as business functions that focus on growth or revenue, and it’s not a legal requirement to have an HR department.
But, even businesses with just a small number of employees have some HR duties. And these can quickly eat into your time if you don’t perform them efficiently.
HR software is a huge help. For a small fee each month, these tools help you build HR processes and automate key tasks. You’ll spend far less time on them and far more time on work you want to do.
And the tools are effective. 74% of companies surveyed by PWC in 2020 said they plan to increase spending on HR technology. The biggest benefits they bring are increasing productivity, providing workforce insights, and improving the employee experience.
This article will focus on 10 of the best HR tools for small businesses. I’ll also explain why you might need one and what to look out for when choosing.
The Best HR Software for Small Business
Here’s the list of the best small business HR tools that I’ll cover in this article. Each of the tools has all you need to get started.
I’ve included plenty of free options for small companies that want the basics at no cost. But there are also some paid tools that offer better support, a cleaner interface, and more advanced features.
Open HMRS - Best open source human resources software
Bamboo HR - Best for measuring employee satisfaction
My Small Business HR Software Comparison Criteria
What do I look for when I select the best HR platforms for SMBs? Here’s a summary of my evaluation criteria:
User Interface (UI): User experience is vital in any software. The best tools have a clean UI that is easy to navigate on mobile or desktop.
Usability: HR tools for small businesses need to be user-friendly so anyone can use them. Documentation and good customer support can also help.
Integrations: Integration with other tools helps automate tasks. You could set up an integration that automatically adds people to a Slack channel when you create an employee profile. Or one that links your payroll software with your accounting software.
Value for $: Small businesses don’t tend to have big budgets for HR software solutions. The tools on this list are either affordable or free.
Small Business HR Software: Key Features
Small businesses don’t need a complete set of advanced human resources features. When choosing the right HR software for your business, think about your business needs and choose a tool that excels in these areas. This will help you get the workforce management features you need without overpaying.
Payroll automation: Payroll is the one HR function that all businesses have to deal with. Payroll automation features let you set up processes that gather data about hours worked and then process payments with a click.
Self-service: Self-service functionality allows your employees to perform simple HR tasks independently. For example, they can generate pay stubs without contacting anyone at your business. This helps your team members get what they need quickly while you spend less time on these tasks.
Attendance tracking system: These features help you track who works and when. It provides visibility into potential staffing issues and can link up with payroll features to automate payment.
Hiring management: If your small company is growing fast, then hiring management features are a must. These let you create job ads to share on job boards or social media sites, collect applications, and manage applicants.
Onboarding and offboarding: Another helpful feature for small but growing companies is setting up automated employee onboarding and offboarding workflows. Just create a list of all the things employees need to do before starting, send them a link to your tool, and they can work through the tasks independently.
Overviews Of The 10 Best HR Software for Small Businesses
Here’s a brief description of each SMB HR software to showcase each tool’s best use case, some noteworthy features, and screenshots to give a snapshot of the interface.
Most of the tools have a SaaS business model, which means you pay a monthly subscription to use them. Although we also have some free and self-hosted options.
Open HRMS has all the HR features small businesses need, including payroll.
Open HRMS is open source HR software with plenty of features useful for small businesses. You’ll find features to help you manage attendance, vacation, transfers, payroll, appraisals, and more.
I like that the tool is organized in modules so you can customize the solution to your needs. This ensures you don’t get bogged down with functionality that isn’t necessary for a business of your size. It makes a ton of sense to organize the tool this way as small businesses have different HR needs to larger ones. And you can always add more features when you need them.
The tool is open source. This means you can download it, install it on your own server, and manage it for free.
Track absences within Bitrix to ensure you’re never understaffed.
Bitrix24 is a web-based HR system for small businesses. The software packs in plenty of features useful for companies without a large HR team. These include an employee directory, time and attendance features, and document management.
One of my favorite features is the self-service HR portal. Employees can use this to access basic HR functions without needing to speak to someone from HR. For example, you set up workflows for vacation requests and business trip permissions.
You can use Bitrix24’s core features for free, which may be all that small businesses need. If you need dedicated HR features, pricing could be anything from free to $159 per month. All plans allow unlimited users (also a bonus for SMBs).
HR.MY lets you create free accounts with either an HR administrator or self-service employee portal.
HR.My stands out due to it being completely free. You get free storage, access to all features, and you can add unlimited employees without paying a fee. It’s a cloud-based tool, so you can access it anywhere, and you don’t have to worry about maintenance or setup.
The catch is that the free version is ad-supported. The ads don’t affect functionality, but they can be off-putting. If you’d rather turn them off, you can do so by contributing $5 per month to the tool’s crowdfunding campaign. You’ll also receive an additional 3500 MB file storage when you make this contribution.
The software has a full set of HR features. You get payroll to record salaries and bonuses and generate payslips; a time clock and attendance to keep track of when employees work; leave management to ensure you’re never left understaffed, and expense reporting to track how people spend company cash.
You can create automated approval workflows in many of the features to save time. For example, when someone submits an expense, the software will notify you so you can approve or reject it.
Manage the entire hiring process from within SnapHRM using task boards that make the most sense to your team, like Kanban or lists.
SnapHRM is cloud-based HR management software with all the core HR features you need to manage your workforce. You can create an employee database, manage payroll, track attendance, manage vacation, and more.
A cool feature is the recruitment management system. It allows you to create job postings which you can share on third-party platforms to generate interest in your job. You can then move applicants through the hiring process by creating shortlists and scheduling interviews. This is a super useful tool if your business is small but growing.
SnapHRM is completely free for businesses with under five employees. This plan lets you access all features, but you don’t get any live support. Pricing for companies with more employees is still affordable—starting at $8 per month.
Fingercheck is an HR tool with an extensive feature-set that includes recruitment, payroll processing, scheduling, onboarding, and expense tracking software.
Anyone in HR will tell you that onboarding is vital to employee success, and this is where Fingercheck excels. It lets you create onboarding sequences for employees to work through when they join your company.
The tool generates all the documents you need for compliance, and you can upload relevant paperwork. The whole onboarding process, including signing forms, can be done via the mobile app. And as a manager, you can monitor progress via the dashboard.
Fingercheck integrates with third-party accounting tools QuickBooks and Gusto. This helps keep your finances and HR on the same page. Pricing is $8 per employee per month with a $39 subscription fee.
The Bright HR employee hub contains profiles for all members of staff.
Bright HR is easy-to-use human resource management software. It has solutions designed for the UK, Ireland, Canada, New Zealand, and Australian markets.
The employee hub is a list of your employees. It’s easy to create profiles for new members and add them to the relevant team. Each profile contains all necessary employee information, including salary, role, annual leave, and absences.
There’s also useful calendar functionality. Here you’ll see who has upcoming leave, letting your plan ahead. You can also create rotas for each employee to see who is at work at different times. Publicizing the rota is easy, and the tool notifies relevant employees when you publish or adjust one.
There’s also granular reporting, a free app that automatically reports when people clock in and out, and an app you can use to track and approve expenses. BrightHR starts at ~$4.08 (£3) per employee per month for the basic plan.
Create onboarding workflows and see how employees are progressing.
Sapling is an HR tool that is a good choice for startups that are small but growing. It has the flexibility to work with multiple different tools such as Google Drive, Slack, Asana, and Xero. This means that if you need to swap systems as you grow, there’s a good chance that Sapling will be able to handle the change.
The tool has features that help you create processes and workflows for different HR functions. For example, you can create an onboarding workflow for new hires to work through. Just send them the link, and they can navigate the entire process online without input from HR. It saves your team time and ensures employees stay on track when performing tasks.
Sapling also has features for managing time off, payroll, people admin, and offboarding. It doesn’t advertise pricing, but you can contact the company for a quote.
Sapling’s onboarding module costs from $4.92/user/month, or the full core HRIS experience starts at $6.99/user/month based on 100 users.
Employee benefits administration is easy with Gusto
Gusto is easy-to-use HR management software. It comes with all the tools you’d expect. You can set up payroll to quickly set and approve payments, or use time tracking tools to track paid and unpaid absences. Meanwhile, the benefits management tools help you set up employee savings, health, and pensions.
A cool feature for businesses without dedicated HR expertise is the concierge service. This provides access to a team of HR experts via phone or email. The plan also comes with alerts and guides to help you stay compliant with relevant regulations.
The tool integrates with plenty of other HR, accounting, and general tools like Asana, Zoho, Bonusly, and Quickbooks. Gusto costs $6 per employee per month, plus a $39 per month base price. The version with the concierge service is $12 per person per month plus a $149 base price.
The Paylocity self-service portal lets employees take care of some HR tasks independently.
Paylocity is a suite of payroll and HR tools. The solution for small businesses is focused on making performing HR tasks as simple as possible.
For example, the self-service tool gives employees all they need to answer simple HR questions independently. They can access pay stubs, PTO balances, and direct deposit information on their own. This can seriously cut down the amount of time you and your team spend on HR.
There are also payroll automation features that will cut down the amount of time you spend on this task. HR managers can automatically track time and attendance, so payday is always on time and the right amount.
Paylocity has a robust app marketplace with over 300 integrations. It doesn’t provide pricing information upfront, but you can request a demo on the website.
Bamboo HR helps you measure and track employee satisfaction
Bamboo HR is a popular HR management solution made for small businesses. The tool collects employee data from throughout the employee lifecycle and stores it in its secure databases. Having this access to records simplifies employee management.
The tool has a solution for several HR functions. The hiring feature-set improves the entire recruitment process. It deals with everything from creating job ads to applicant tracking and management. The tool also lets you create powerful onboarding sequences and manage payroll.
Some of the most interesting features are around building company culture. You can create employee satisfaction surveys with anonymous feedback to learn what people think about work. You can then track this over time to see how your employee engagement efforts are paying off.
Other features make employee performance reviews quick and easy. This allows you to switch from annual reviews to more frequent ones.
Bamboo HR has two plans: essentials and advantage. Contact the company for a quote.
Are none of the above tools a good fit for your organization? Then here are some options that didn’t make our top list but might be a good choice for the right business. You can also check out our article on the overall best HR tools for more advice.
Small businesses need some form of HR. Even if you don’t have a dedicated team, someone at your company needs to process payroll, find and onboard new employees, and manage your staff.
HR software can simplify all these processes. And many tools will also guide you around compliance and employment law, which is challenging if you aren’t an expert. The key for small businesses is finding a solution with the features they need, without having to pay for unnecessary extras.
What Can You Do if Your Company Doesn’t Have an HR Department?
Many small businesses won’t have a dedicated HR department. This isn’t a problem as there’s no legal requirement to have one.
But, you will need to educate yourself about HR functions or have someone else in your team be in charge. If you find that managing HR is taking up too much of your time, use software or hire extra help.
What Do You Think About These Tools?
Have you used any of these small business HR tools? Then let us know what you think about them in the comments. And if you want to learn more about HR and managing people in your small business, be sure to sign up for the People Managing People newsletter.