The Best HR Software for a Small Business

Human resources (HR) software is designed to streamline and manage core HR functions. By automating processes such as payroll, PTO requests, and benefits administration, HR software helps small businesses save valuable time and reduce administrative burdens. 

With a range of HR software options available, each offering unique features and capabilities, it's crucial for businesses to choose the solution that aligns with their specific needs. This article will help you identify the best HR software to fit small business requirements and optimize your HR operations.

How to choose HR software: Key features to look for 

When selecting HR software, it's essential to evaluate key features that align with your small business needs to ensure you choose the right solution. Identifying software with the appropriate functionalities ensures that your HR operations run smoothly and that you can effectively manage and support your workforce.

We’ve identified five key features that the best HR software for small businesses have:

Employee onboarding

Effective onboarding helps integrate new hires into your organization. Onboarding enables a smooth transition by automating paperwork, training, and introductions, which can improve employee satisfaction and reduce turnover.

Time and attendance tracking 

Accurate time and attendance tracking is essential for managing employee hours, preventing errors in payroll, and ensuring compliance with labor laws. Time tracking and scheduling also enables small businesses to monitor attendance patterns, manage leave requests, and control labor costs.

App integrations

Integrations with other software tools, such as accounting or project management systems, enhance efficiency by allowing seamless data flow between platforms. Integrating necessary apps reduces cumbersome manual data entry and helps teams manage all their systems. 

Payroll management

HR software can automatically calculate wages, deductions, and taxes—ensuring both timely and accurate payments to employees.  With payroll software, you can minimize errors, reduce administrative workloads, and ensure compliance with tax regulations.

Compliance management

Tracking compliance with labor laws and regulations like minimum wage and overtime requirements is critical to avoiding reputational issues and fines. And a compliance tool that empowers small businesses to train employees about workplace policies, manage regulations, and save documentation can help protect the business.

The best 6 HR software systems for small businesses

When looking for a way to streamline and manage your small business's HR needs, the right software can make all the difference. To help you find the perfect solution, we've put together a list of the best HR software options for small businesses. 

These tools offer a range of features to simplify tasks like payroll, benefits, and employee management. 

1. Rippling:

Rippling is a top-rated, all-in-one global human resources information system (HRIS) that combines HR, payroll, and benefits with a wide range of integrations, an easy-to-use interface, advanced security features, and more. This creates a consistent experience—whether running payroll, managing PTO and other types of leave, or creating a custom report. 

Rippling’s HRIS can support your US or global team by bringing all your employee data into a single system. Instead of manually entering (and re-entering) data to ensure siloed platforms have the same information, Rippling unifies workforce management processes, paving the way for time-saving automations and customizable workflows that ease your small business’ administrative burden.  

2. BambooHR: 

BambooHR is an HRIS system that offers solutions in many areas, including HR, payroll, time and attendance, performance management, and benefits administration. 

Pros:

• Cost-effective

• Easy to use

• Robust functionalities that support international companies

Cons:

• Lacks advanced workflows

• Customers need to direct their own compliance

• Lacks a learning management system (LMS) and headcount planning

3. Paycor

Paycor is a human capital management (HCM) system that provides many key solutions, including HR, payroll, ATS, time and attendance, performance management, scheduling, benefits administration, and compliance. 

Pros: 

• User-friendly dashboard

• Applicant tracking system (ATS) simplifies the hiring process

• Comprehensive performance management for tracking goals and motivating staff 

Cons: 

• Disconnected modules can make the platform complicated to use and configure

• Reports lack some capabilities and do not pull data across all modules

• Customer service based on legacy-style phone support

• Limited depth of integrations

4. Gusto: 

Gusto is a cloud-based HRIS that provides businesses with payroll, benefits, and HR management tools.

Pros:

• Suitable for small businesses and start-ups

• Full-service payroll

• Benefits management 

Cons:

• Can run into issues with scaling

• Limited third-party app integrations

• Limited reporting capabilities

5. Paycom 

Founded in 1998, Paycom is a well-known HCM platform. Services include payroll, time and attendance, performance management, budgeting, and scheduling.

Pros:

• Employee self-service for an improved employee experience

• Focus on employee engagement

Cons: 

• Limited integrations

• Cannot automate some tasks

• Lack of reporting features and customization 

• Reports are siloed and can’t be combined across modules

6. Deel

Similar to Rippling, Deel is a cloud-based HRIS specializing in global payroll, compliance, and other core HR tasks for businesses with a remote or global workforce.  Deel is more limited, however, in that it lacks the LMS, time and attendance, and applicant tracking solutions and automated compliance alerts that Rippling provides.

Pros:

• Offers global payroll in multiple currencies 

• Offers EOR (Employer of Record) services

• Locally compliant employment agreements and templates

Cons:

• Outsources some global payroll

• Lacks LMS, time and attendance, and applicant tracking solutions

• Lacks automated compliance alerts 

HR Software: main benefits for small businesses

HR software can be transformative for small businesses, delivering numerous benefits that streamline operations and enhance efficiency. By automating tasks such as payroll processing, benefits administration, and employee record management, HR software can save small businesses significant time. Additionally, it helps monitor compliance with labor laws and offers valuable insights through data analytics, empowering small businesses to make better decisions and build a solid foundation of HR practices.

Here are some key benefits of HR software for small businesses:

• Save time: Automate core HR tasks, reduce manual effort, and free up time for more strategic activities

• Improve data management: Centralize employee information to easily access and manage records accurately and securely

• Streamline administrative tasks: Simplify payroll processing, PTO requests, and employee record management.

• Employee engagement: The best HR software includes tools for tracking performance, setting goals, and gathering feedback, which can boost employee satisfaction and productivity.

• Enhance compliance: Keep track of labor laws and regulations to help enforce compliance with legal requirements

• Simplify recruitment: Manage job postings, applicant tracking, and onboarding procedures more effectively

• Analyze data: Review data and reporting to make informed decisions about workforce planning and management

Transform your HR management with Rippling

The term “all-in-one” has become one of the most prevalent ways that vendors describe their HR offerings. But in reality, most HR software consists of siloed modules. These systems provide a common user interface, but they are separate systems at the data level. This makes it hard or impossible to centrally manage permissions, create reports that combine disparate datasets, and automate manual work.

There’s a better way to “all-in-one”—building a unified set of applications on top of a common platform that operates more like the operating system on your laptop than a bunch of disconnected applications. 

Every application in Rippling was built to work together. Rippling's best-of-breed apps cover the full breadth of your HR needs from onboarding to offboarding. 

With Rippling, you get: 

• Automated onboarding: Rippling automates the new hire process by generating offer letters, scheduling training, and setting up apps, accounts, and devices.

• Automated transitions: Rippling adjusts payroll after employee changes, like promotions, without teams lifting a finger.

• Automated offboarding: Rippling handles offboarding tasks such as generating separation agreements and disabling app and device access.

• Compliance 360: Rippling automatically flags compliance issues no matter where your employee is located. 

• Global HRIS: Rippling provides a single HR system for teams worldwide, localizing data, payroll, and compliance based on work location.

• Analytics: You can run any custom report on workforce data across Rippling and third-party apps.

• Customized workflows: With Rippling, you can choose from hundreds of ready-to-use templates, reports, formulas, and recipes—built to save time and effort. 

Rippling’s HR apps are built in-house on a unified platform. The result? Seamless automation, reporting, and data unification across all your HR processes.

Frequently asked questions

Does a small business need HR software?

While not all small businesses need HR software, it can be highly beneficial as the business grows. 

Are there different types of HR software?

Yes, there are several types of HR software, each designed to address different aspects of human resource management. Some types include Core HR, applicant tracking systems, compensation management, payroll software, and learning management systems.

Does HR software manage data security and compliance?

HR software plays an important role in data security and compliance. It helps businesses protect sensitive employee information and adhere to legal and regulatory standards, minimizing risks and ensuring smooth HR operations.

How can HR software benefit a small business with limited resources?

HR software can greatly benefit small businesses and lean HR teams by automating time-consuming tasks such as payroll processing, benefits management, and employee recordkeeping.