Human Resources tasks can be very time and resources consuming for small businesses. This is why, as a business owner or manager, one of the first things you should do is to start looking at the best & most suitable HR software for small businesses that can help your business in today’s competitive market.
Offline or Online HR software for small businesses can help businesses centralize most of their HR resources and streamline most HR-related tasks such as benefits administration, timekeeping, and more.
Like Marketing Automation software, HR software helps businesses by automating many of the tasks that would’ve otherwise been done manually, which can save small businesses a lot of time and money.
To make the best out of your HR tasks, you need to pick out the best HR software for your business, which is why we are going to list some of the best available solutions — their advantages and disadvantages, their pricing, and choosing one easier for you.
Best HR Software for Small Businesses
- Zoho People
- People Spheres
These are in no particular order. We favor no solution over the other because, in the end, it’s mostly objective and depends on what you need from the solution.
Gusto is a great HR Software for small businesses. Gusto’s main strength is in its offerings considering employee benefits.
Gusto was mainly designed as payroll software, but what it offers in terms of HR and benefits is excellent and robust. Its pricing is reasonable enough to easily take its place as an excellent HR software for small businesses.
Gusto offers HR, on-boarding, payroll, reports, employee benefits, online forms, e-signature, an employee database, and more.
Gusto makes the recruitment process paperless and more efficient to save your energy, time, and money.
Importing employee data from other applications is a time-saving feature that will make on-boarding much more manageable. It also provides your new employees with a professional hiring experience.
Gusto integrates with other popular accounting and time-tracking applications to provide further functionality for its users.
Gusto doesn’t offer applicant tracking or performance management. No recruiting tools are available, so you need to find employees using other tools. Gusto’s health insurance benefits are also not available in all 50 U.S. states, so you might want to check if it’s possible for your state before making a decision.
Gusto offers three pricing plans:
- Core Plan: costs $39/mo. + $6/ employee /mo. – includes all payroll features, health benefits, employee accounts and profiles, workers’ comp administration, and customer support.
- Complete Plan: Costs $39/mo. + $12/ employee /mo. – Includes all the care plan features and adds hiring and onboarding tools, surveys, and time-off requests.
- Concierge Plan: Costs $149/mo. + $12/ employee /mo. – Includes all the Complete plan features and adds advanced HR tools such as HR resource center and dedicated support.
You can add health benefits, commuter benefits, HSAs, FSAs, 401(K) plans, and 529 Plans to any plan.
Gusto offers a one-month free trial.
Namely is a solution that can cover the entire HR life cycle and do all-things-Human -Resource-Management related. It allows users to customize and tailor anything they want to fit your already-existing business processes.
Namely offers a clean and practical interface, and the newsfeed is an efficient way to communicate with your employees. You can easily set up workflows, view org charts, manage company calendars, manage user roles, and store company documents using Namely with ease.
Namely offers all the professional HR features a business can need, including benefits, talent management, performance reviews, onboarding, payroll, timekeeping, and managed services.
Namely can integrate with almost any software, and it provides users with more pre-configured integration options than any of its competitors.
The managed services and the social networking feed are two of Namely’s unique features that you won’t find with other HR solutions.
Namely also offers Namely Exchange, which is an online marketplace for employee benefits.
As explained, Namely is a comprehensive HR suite that offers almost everything. However, this comes at a cost; the solution takes 8 to 12 weeks to implement due to all the customization.
Namely is also quite expensive, and they make matters worse by not offering an explicit pricing scheme online, so you will need to speak to a salesperson to get a quote for your business.
Unlike many other HR solutions, Namely doesn’t release their pricing online.
However, with some digging, you can find that Namely costs about $15-$30 per employee per month plus their one-time implementation fee, which ranges from $50 to $80 per employee.
Bamboo is a web-based HR system that’s designed for small and midsized businesses. It enables enterprises to track training, benefits, store information, forms, time-off requests, and more.
Bamboo was built on the principle that HR is for the people only and not the paperwork. They position themselves as a solution that can help small businesses transition from spreadsheets to a flexible and efficient core HRIS system.
Bamboo is user-friendly with an engaging interface that makes using the solution easy.
The solution offers excellent onboarding tools, flexible performance management, and customizable fields, tabs, user groups, and Bamboo integrates smoothly with many third-party applicant tracking and payroll systems for extended functionality.
What sets Bamboo HR apart from other HR applications is its intuitive and engaging user experience, making it easy for first-time users to adopt the solution without training quickly.
Bamboo doesn’t offer native integration with popular payroll and benefits software, something most of its competitors, like Gusto, offer. Bamboo also has a hefty setup fee, unlike Gusto and Zoho People that don’t charge you’re a setup fee at all.
On its official website, Bamboo doesn’t have an explicit pricing scheme. However, by digging around, you can find that their pricing starts at $6.19/ employee /month.
Bamboo offers a 14-day free trial.
Zenefits aims to be a flexible and comprehensive HR solution without the complexity of other HR platforms while still giving businesses everything they need, focusing on companies that have employees that spend a lot of time on the road.
It is an excellent HR suite for small and mid-size businesses that offer a robust suite of tools to automate as many HR tasks as possible. The solution can automate on-boarding, onboarding tasks, employee data, paperwork management, compliance tasks, and more.
Zenefits also offers time tracking, payroll processing, and regulatory compliance. They offer a full-service benefits management portal and a comprehensive payroll portal, but you can opt to hook into another payroll provider if you wish to.
The solution puts a lot of focus on mobile, and their mobile applications offer more than mobile apps of other HR solutions. Zenefits also provides integrations with plenty of third-party apps and services, including Salesforce, Asana, and many more.
Surprisingly enough, it is not the best solution for handling benefits. The software itself has some limitations, and it doesn’t assist with claims issues and questions.
Zenefits’s integrations need work as well; the integrations are not as deep as those offered by competitors.
Many users also complain about the constant increase in prices over the last couple of years, which is understandably frustrating, considering they now charge users for features that used to be free.
Zenefits offer two main pricing plans:
- Standard: Costs $40/mo. base fee + $5/ employee /mo. Includes the HR platform, business intelligence, Custom fields, and Documents App.
- Advanced: Costs $40/mo. base fee+ $9/ employee /mo. Includes all the standard plan features and adds Time-off tracking, HR library, ACA compliance, and Compliance assistant.
No free trial is available. There are many available add-on applications; these are Payroll, Benefits, Time and Attendance, HR advisor, Payroll Advisor, performance management, and ultimate advisor.
If you are looking for a free HR application and have a small team of 5 people or less, then Zoho people is one of your best options. Zoho people is a part of the much large Zoho suite of business and productivity software.
Zoho people offers necessary HR data, workflow and reports, documents, leave tracking, performance management, and time-tracking in a user-friendly package that is a delight to use.
With Zoho People, you can customize data entry from employees, keep track of employee time, set performance goals, identify key performance areas, and give 360-degree feedback to your employees easily.
You also get talent management and software integrations with popular payroll solutions like QuickBooks, and you can integrate the solution with any software through Zapier.
Zoho’s customer support, user community, and knowledge base mean you will always be able to find answers to any questions you may have and solutions to problems you may face.
Zoho lacks native integration with payroll software used in the U.S. Also lacking is integration with benefits providers such as life insurance companies and healthcare.
This is somewhat negated because you can set up your integrations via Zapier, but this requires extra effort and time from the already-busy people of small businesses, so it’s not ideal.
Zoho People Pricing
Zoho People offer five pricing packages on their website:
- Free Forever – Costs nothing – limited to 5 employees – basic HRIS.
- Essential HR – costs $0.83/employee/mo. It gives you basic HRIS with self-service login for employees plus leave management.
- Professional – Costs $1.66/employee/mo. Adds attendance and timesheets
- Premium – Costs $2.5/employee/mo. Adds shift scheduling, basic performance tracking, and Zoho reports integration.
- Enterprise – Costs $4.16/employee/mo. Adds 360-degree feedback, cases, and Multi-Rater feedback.
A 15-day free trial is available – no credit card required.
Cezanne HR is one of the best HR solutions for international teams or teams with global operations. That’s mainly thanks to the solution’s capability of dealing with international regulations and local laws in different countries. They also offer multi-language and multi-currency support.
The solution is a modular system that allows users to pick and choose precisely what the business needs and nothing else. Cezanne offers tools for performance reviews, recruitment, people management, Payroll, and more.
Cezanne is a more comprehensive solution than other options on this list. It offers some advanced modules such as the career and succession module that allows users to strategically plan for their future needs, map key roles, identify potential successors, and so on.
Cezanne is a comprehensive, fully-featured solution, but this comes at the price of complexity here. It requires a bit of experience to get used to it and has a steep learning curve that will not fit everyone’s liking.
Cezanne HR doesn’t have clear pricing plans, but instead of having to endure the negotiations with a salesperson, you can get a quote using their online quote calculator.
PeopleSpheres is an excellent solution for users who are already using multiple software platforms and are looking for a way to simplify things.
This is a 3-in-1 platform that can be used as a central hub to all your HR services. It can automatically grate with other HR services and automatically synchronize your employee data to save you a lot of time and effort.
The solution allows you to create a custom profile for each employee, which you can then update with requests and then accept or reject these requests and send automatic notifications to their profiles.
They also offer a cross-platform reporting tool that lets you generate a wide range of reports with ease and then send a weekly digest notification email to everyone in your organization to keep everyone up to date.
The main disadvantage of PeopleSphere is that it’s not an HR solution in itself. Instead, it’s an integration platform that allows you to connect other HR solutions and platforms you are already using to get the best results.
If you are entirely new to HR software, this is not the one for you.
PeopleSphere has a starting price of $5/ employee /month, and it can go all the way up to $15/ employee /month, depending on the features your business needs.
GoCo is one of the best all-in-one HR software for small businesses. The solution offers detailed employee documentation, including personal details, vacations, and more. It also provides dashboards to manage employee benefits, onboarding, timesheets, and so on.
What makes GoCo stands out is their network of benefits advisors that provide support for their users when they need it.
GoCo doesn’t offer payroll, but it offers integrations with popular payroll solutions like Xero, QuickBooks, ADP, and more. The solution also integrates with Slack to make getting HR tasks done much more comfortable.
GoCo has a clean interface that’s pleasing to use, which improves the overall experience of using it.
Most users’ complaints about GoCo revolve around the limitations of some of its features – like vacation time tracking. There’s also an issue with some hidden costs. Users have complained that they were, at times, charged for things they thought were free.
Also, while Slack’s integration is functional, it would be nice to see more integrations with project management software.
GoCo offers two pricing plans:
- Complete HR – Costs $29/mo. base fee + $6/employee/mo. and includes all the basic HR features such as integrations, user permissions, reporting, team performance & feedback, onboarding, document storage, time-off tracking, and benefits.
- Premium HR – Costs $29/mo. base fee + $10/employee/mo. and adds advanced features and functionality such as custom time-off policy compliance, Advanced rule configuration, accruals, liabilities, and balances, and more.
There is no free trial available, but you can request a demo.
If your business is overgrowing or an international business (or plan on going internationally soon), then OneMint might be one of your best options.
OneMint was made for businesses in complex industries like healthcare and food services. This is a scalable solution that can take care of HR management for small businesses.
OneMint offers an intuitive interface and offers HR, benefits, workforce management (including talent management), and they even add Payroll – which is included in the pricing, unlike many of its competitors.
The solution is designed as a single database and works seamlessly as an interconnected system. This gives you more control over security and roles. For instance, you can choose who can use the system, when, and where.
The payroll feature is only available for businesses in the U.S. and its territories, which means international businesses do no get it. The pricing is also a bit high when compared with competitors that offer similar features.
OneMint doesn’t have clear pricing packages on their website, but with some Googling and asking around, we found that it costs about $7 – $10 per user per month.
No free trial is available, but you can book a demo on their website.
Paycor is a great HR software for small businesses. The solution supports the entire employee life cycle, meaning you can manage recruitment, labor law compliance, on-boarding, payroll, time and attendance, benefits, performance management, reporting, payroll, and more.
It’s a scalable solution, so you can count on it as your business keeps growing without having to experiment with add-ons and other solutions to cover all your HR needs. Paycor is excellent for companies with just a few employees, but it can quickly grow to accommodate 10,000 employees and more.
Although professionals and experts in their fields designed Paycor, the solution remains easy to use by anyone. Their features are robust but without the complexities that come with other solutions.
Custom reporting is excellent, there’s payroll tax integration for all 50 U.S. states, and you can export files easily to share your data.
It would’ve been great for all of its focus on small businesses to see a free version or even a free trial. Sadly, they offer neither, which means that you can’t test if it’s a good fit for your business before making a decision.
Again, there is no clear pricing plan here. We know that the annual cost of Paycor is $289.90 for one employee and can go all the way up to $9,230.00 for 300 employees.
As you can see, pricing and features can vary from one provider to the next, and it all depends on what you need from the solution.
How to Choose the Right Hr Software for Your Business?
Determine your needs
For your business to invest in a new HR system, you need to be sure that it will meet all your needs and add something useful to your business. Just adding technology to your current process is not enough to justify the investment of time and money into a new HR system.
The first thing you should do is learn more about the problems you need the HR software to solve and its needs.
You could also have an HR system already in place but are looking to upgrade. In this case, you need to take a look at it and start finding out what works, what doesn’t work, and what do you need that this solution doesn’t offer.
Something worth considering is whether it’s cost- and time-effective to change the solution altogether or is it better to find a way to improve it. Ask your team, your employees, and search the internet on how you can get more out of the current system in use if that’s possible.
You should also take automation heavily into consideration. Automation is indeed a game-changer, and you want a solution that can automate as many tasks as possible. Automation can save you a ton of time and money. The benefits of automation are remarkably similar in HR and marketing, so you could learn more about the benefits of Automation for HR by checking out these 15 Benefits of Marketing Automation for Business.
Have High, but Realistic, Expectations
While deciding what you need from the HR system, you should remember that you should keep your expectations high, but not too high that it’s not realistic. Yes, you will be surprised by what current HR systems offer, and some of the features they offer seem to be too good to be true, but that doesn’t mean you expect the impossible out of it.
When implementing a new HR system, too many people have either low or very high software expectations. The key thing to keep in mind here that an HR system will indeed do a lot for you, but it won’t do everything.
Here’s a tip: Prioritize your needs.
Prioritize your needs as essential, needed, and nice additions. Try to differentiate between what you need, what you want, and what you fantasize about.
It’s important to discuss all of this with your team so you are all on the same page. Your team members will have different expectations about the software, so you should set things straight before moving on.
Set a budget
Depending on the size of your business, the complexity of the system needed, the features you want, the number of employees the system needs to manage, and the vendor, the HR system’s cost can vary significantly.
Small businesses can get away with free or very low-cost HR systems, while large companies can pay thousands in the HR system.
While setting a budget for the new HR system, you should keep in mind that you don’t need to spend a lot, but you will need to invest in getting the features you want in an easy-to-use package. For example, while doing your research, you will find plenty of options in the 5-to-10 thousand dollars price range.
However, these are so expensive because most HR software tools offer standard HR functions such as attendance and compensation. This offers more advanced functionalities and features such as managing and tracking benefits and regulatory compliance.
Pay Attention to the essential integrations.
After choosing the features, you need to pay attention to the integrations because some can change your experience using the software entirely.
Let’s take payroll integration as an example here since it’s the most crucial integration you will need to have with an HR system. You should go for HR software that integrates seamlessly with popular accounting or payroll solutions.
If you are already using an accounting/payroll solution, which is very likely, then you need to make sure the software you choose can integrate quickly and effortlessly with this software.
This integration means you will eliminate data entry from the process and be able to provide consistent information across your business since the HR software will be able to import all your existing data from the other system automatically.
Think About Customization
No matter how much an HR system costs, there is nothing like a perfect software package. It may suit your needs, but it will never be perfect. This is why you need to think about customization.
HR management solutions providers do their best to cover all bases by offering all the features they think businesses need built-in their software. However, you will still need some things to be custom-built for your business, as these can make your workflow that much smoother.
This can be done with customization options. For example, you will need certain things in your reports or a specific screen layout. If the solution enables you to customize the fields in your reports or the layout elements to your needs, it will make you more productive and efficient.
Customization options also give you headroom for future changes that will inevitably happen to your business. This means you reduce the chances of you switching to another HR system in the future because you will be able to make modifications to the system and have it still meet your needs even if with the changes in your organization.
Start your search & Narrow it Down.
Now you know exactly what you need out of the software, it’s time to do your research. Start with Google, visit the vendors’ websites, and talk to salespeople. Try to learn as much as possible about each solution.
Make a list of the available options and work your way down to the best five, four, or three options. These should meet all your needs, fit the budget, and be suitable for your business & industry.
Try them out for yourself.
After narrowing down your list to only three-to-five solutions, you should check out the options for yourself before committing.
Just reading reviews online and talking to salespeople are in no way enough to make a decision. You should talk to other users of each solution and let them tell you about their experience using the software.
Don’t know anyone who uses the software? Ask the vendors! Ask each vendor for a recent client list and contact those that seem most similar to your business.
Then, you should try the software out for yourself. You will find that most vendors offer a free demo upon request, so you can check what they offer more in-depth. It’s important to try and pick out the issues or problems because you don’t want to invest the time and money to implement and set up the solution, only to be surprised by some hidden problems.
Watch out for hidden fees.
Some software companies play a tricky game with their pricing. You will find that some providers offer basic functions but then, after actually purchasing the software and implementing it, find out that you need to pay for some features you thought were included in the package.
It’s like buying a house and then finding out that the doors and windows are extras,, and you need to pay more to have them installed. It’s a no-brainer that the house comes with doors and windows, but it’s a bit more tricky with HR software.
Have a lengthy discussion with the salesperson or vendor representative about the package you are buying offers and what you will need to pay for. Ask every question you need to ask, and it’s not something that should be rushed, and make sure you understand exactly which features are included in their core pricing and which ones need to be purchased separately.
Consider the time of setting it up.
In the business world, time is money. Software that needs less up-front customizations will be set up more quickly.
One more thing to consider is how easy the software is to use. Which would you rather? Software that can be set up in a day but is so complex and difficult to use that every employee needs a week of training to use it or one that can be set up in two days, but your employees can start using it right away because it’s so intuitive and easy to use.
That’s it! Congratulations, you now know all the basics of how to choose an HR system for your business. As you can see, it’s not easy, but it’s not mind-bogglingly tricky, either.
It will take time and effort, but it’s worth it if you want to choose software that will push your business forward.
What are the most important features of an HR system, in your opinion? Leave us a comment below with your thoughts!