Top Human Resource Software for Small Businesses
The market for HR software is growing rapidly. Vendors are producing more solutions and companies are buying them. According to the KMPG "Digital Trends Survey 2019", "two-thirds of HR executives believe that HR has undergone or is undergoing digital change. However, companies believe that they can only successfully drive digital change if they buy big software, which requires a reliable - and often large - budget.
Small businesses still need to streamline workflows and be efficient, especially in terms of HR
Despite tight budgets and limited IT resources, small businesses need to centralize their operations and be efficient, especially when it comes to human resources. In this article we take a look at some of the best HR software for small businesses - modern, cloud-based systems with industry-leading functionality at an affordable price. If you're ready to receive personalized HR software recommendations for your business, use our product selection tool or click on the banner below to get started.
Pain points for small businesses
The University of Villanova cites change management, leadership development and measuring HR effectiveness as some of the biggest challenges facing HR today.
Companies of all sizes are affected by the need for better leadership development and change management, and the software industry itself has evolved to meet these needs. At an industry level, things are looking up. But small businesses still face a number of more differentiated challenges:
No dedicated HR staff: Many small businesses are transferring HR responsibilities either to a cross-functional manager or to a single, internal HR administrator. In both cases, a single person handles payroll and benefits, time tracking, complaints/disciplinary actions, hiring, promotions and so on.
Keeping records and compliance: HR regulations are subject to constant change. Small businesses need to align accounting etiquette with health care reform, tax laws and labour laws. Armed with only a filing cabinet and the Sunday newspaper, this will certainly lead to errors, delays in processing and, in the worst case, fines.
Employee turnover: According to a TechnologyAdvice study on employee satisfaction and loyalty, 42.6 percent of employees are actively looking for a new job or are at least open to it. Without a strategy for investing in talent and building an attractive work culture, small businesses lose good employees to competitors who offer higher salaries and better benefits.
Differences in performance: With smaller teams, it quickly becomes apparent whether certain employees are not making their contribution. But how do you orchestrate continuous improvement without a formal performance management or training system?
Key software features
The right HR software can help small businesses alleviate these problems by automating administrative tasks, record keeping and compliance, and providing HR coordinators with tools to find and retain the best talent. In today's market, most solutions are moving toward mobile access, multi-channel talent management, internal collaboration models, and self-service access.
To get the best return on your investment, it's important to choose a solution that offers advanced features and intuitive access.
Although solutions vary from vendor to vendor, a fully functional HR management platform offers a combination of the following features:
- Employee self-service
- Applicant tracking and onboarding
- Compensation and succession planning
- Administration of the services
- Performance Management
- Time/attendance tracking
- Social Recruitment
- Collaboration tools (news feeds, internal messaging)
- Reporting/Analytics
- Mobile access (via native application or web interface)
Types of systems
There are many different ways to package HR software. Most solutions for small businesses are cloud-based, which saves upfront costs and eliminates the need for IT infrastructure. In addition to deployment models, there are three primary classes of HR software that are structured by purpose:
Core HR: Core HR solutions help companies perform the administrative functions required to manage payroll, benefits, time and attendance, workforce planning and regulatory compliance. The self-service portal that allows employees to access their work-related data and enter updates and requests is also an integral part of most core systems.
Strategic HR Management: The primary focus of strategic HR solutions is on recruiting, retaining and developing the best people, which is why they are often referred to as "talent management. These solutions usually address recruitment, performance management, training and development and succession planning. Some are even best-of-breed applications that focus on a specific aspect of talent management, such as the hiring process.
7 Top solutions for small businesses
Namely
This is a web-based platform that specializes in centralized HR and talent management for growing companies. Your product includes payroll and benefits management, time tracking, performance appraisals and of course serves as a recording system for all your employee data. Namely, it also offers an integrated social news feed and custom reports for individual and team metrics.
The system is designed to be adaptable and easy to use, making it stand out from more complicated enterprise solutions. But Names' preference for small and growing businesses doesn't mean that they save on resources: Business customers receive 24/7 customer service from a dedicated Namesely account manager. Namely, Names has been used by thousands of small businesses around the world as well as by some of the larger brands such as Kayak, Mashable and Vimeo. Full disclosure: TechnologyAdvice is currently using for our HR needs in particular.
JazzHR
Unlike PeopleMatter, and specifically PeopleMatter, JazzHR is a best-of-breed HR solution, i.e. it is designed for specialized use - in this case for applicant tracking and interview management. JazzHR helps companies advertise jobs, review applications and manage the interview process through a centralized, real-time platform. Managers can create custom recruitment phases with automated tasks (e.g. follow-up e-mails, reminders) and integrate participants into the process as users with different permissions and data protection levels.
Post directly to job search websites such as Glassdoor and CareerBuilder and use integrated SEO tools to ensure you have chosen the right title and job description. JazzHR also offers social recruiting, employee referral programs, applicant screening, background checks, resume reviews, branded career websites, interview guides, recruitment calendars and more.
Although JazzHR does not have a native mobile application, career sites and interfaces are automatically optimized for the device used. Along with 3,000 other companies, TechnologyAdvice has used JazzHR to more than double our team - from 20 to over 50 employees since 2013.
Cezanne
Cezanne offers comprehensive HR management tools that are also accessible to smaller companies, but which are scalable with future growth and progress. The system is cloud-based and is billed on a monthly subscription basis according to the modules implemented and the number of users.
The core module, People Management, provides capabilities for training and development, disciplinary actions and complaints, health and safety compliance, document management and reporting. Customers can choose to add individual or all add-on modules, including absence management, time tracking, performance management and applicant tracking. Unlike larger vendors with complicated pricing structures, Cezanne offers each module at the same flat rate per user, so you know in advance exactly what you will pay.
In addition to the primary functions, Cezanne also offers tools for personnel analysis and complementary solutions for payroll accounting. The platform is accessible to employees and managers on the road via a native mobile app for Android and iOS devices.
BambooHR
BambooHR is a cloud-based core HR solution that meets the administrative needs of small businesses and provides efficient self-service access for employees. Although BambooHR does not offer some of the robust features of its competitors, the price is hard to beat and the user experience is simple.
The web application serves as a central repository for employee information such as job and salary history, benefits and training. Employees can access company documents, request leave, and view and edit their personal information.
With different levels of custom access, administrators can manage leave requests, set accrual policies and create custom reports based on any data in the system. For advanced use, BambooHR integrates with many popular applications for applicant tracking, eSignatures, payroll and benefits management. The system is also accessible on mobile devices via native apps for iOS and Android.
Zenefits
Zenefits began as a free core HR solution, but their product (and their company) has come a long way in recent years. Zenefits now offers integrated payroll, time tracking, native mobile applications and impressive integrations in addition to the platform's core functionality: HR management and benefits administration.
Zenefits offers two levels with monthly subscription costs per employee plus add-on apps. What you pay depends on what features you need, but in general the cost is still much lower than for enterprise solutions. Zenefits boasts of serving more than 250,000 people in the USA.
Zoho people
Zoho People is part of Zoho's online suite of productivity applications for businesses. If you know anything about Zoho, you know that in a number of other software categories they play the less expensive role of the underdog, and their people management is no exception.
People refer to themselves as a "complete online HR solution", but if you take a closer look, it's usually an administrative HR tool with a basic performance assessment function. The good news is that if you need to expand your HR stack in Recruiting/ATS, People integrates with Zoho Recruit (and, by the way, with every other application in the Zoho universe). Other People features include time and attendance tracking, leave management, custom forms and permissions, and employee self-service.
Users can access the system online or via native mobile apps for iOS and Android.
EffortlesslyHR
EffortlessHR is a Tucson-based provider of online HR software designed specifically for small and medium businesses. The platform itself includes HR management, PTO and time tracking, and an employee self-service portal. Applicant tracking is available as an add-on.
Effortless, while not one of the more robust systems on this list, is one of the less expensive systems that is offered at a flat monthly rate rather than charging for the number of employees. This gives you the flexibility to expand your team without increasing the price levels each time you add a few more employees. Another nice feature is that Effortless is ready to use with over 100 HR form templates, so you don't have to create shared workflows and documents from scratch.
Thanks to modern innovations such as Software-as-a-Service (SaaS), the market is bursting with affordable solutions for companies of all sizes. Even if you only need to track time and digitize employee data, a centralized HR solution can help you do it more efficiently and accurately. With a little luck, your business will start to grow, and you'll be happy if your HR infrastructure can grow with you.
Need help choosing the best solution for your business? Use our product selection tool to get a personalized recommendation based on your industry, company size and the features you value most.