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The Best HR Software For Small Businesses

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It is easy to see that the world of human resources is going digital. As more companies shift their attention to providing cloud-based HR opportunities, small business owners are taking advantage of services that used to be attainable at the enterprise level only.

Fancy, highly interactive home pages greet employees and function as a way to sync important employee data and manage the legal requirements of managing human capital. Digital onboarding can take the stress out of new hire paperwork. Digital HR software also syncs time tracking with PTO counters to help manage payroll and scheduling. Want to promote employee education? Learning modules can be created for you. These companies even help create employee handbooks and provide expert HR advice with a quick chat or phone call.

Sometimes as companies grow, HR can be the last department to develop, but it doesn’t have to be that way anymore. HR software wants to make HR accessible to all, and there is no better time to try out the options and see if you can benefit.

Not all HR software systems are created equally. Some have better payroll capabilities, and some are more focused on offering a bevy of customizable features. Ultimately, every HR program needs to cover the full life cycle of an employee and represent your company’s culture from the onset. The decision comes down to your priorities, and no matter what those priorities are: There’s a system for that.

Learn More About Our Top Picks

CompanySummaryNext StepsSummary
Gusto

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Best HR software for payroll.
Best HR software for payroll.

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Zenefits

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Best HR software for advanced features & options.
Best HR software for advanced features & options.

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BambooHR

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Best intuitive & customizable HR software.
Best intuitive & customizable HR software.

Visit Site

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Namely

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Best for businesses with 50+ employees.
Best for businesses with 50+ employees.

Visit Site

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Paycor

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Best for businesses with 10 employees or less.
Best for businesses with 10 employees or less.

Visit Site

Read More

Read more below to learn why we chose these options.

The 5 Best HR Software Systems

Gusto, Zenefits, BambooHR, Namely, and Paycor are five of the best HR software programs available for small business owners looking to outsource or upgrade their HR department. The best HR software choices help you manage payroll; track employee hours, PTO, and compensation; administer benefits; write performance reviews; plus help with onboarding/offboarding.

1. Gusto: Best HR Software For Payroll

Gusto



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Best small business HR software for payroll.

Gusto started in 2012 as ZenPayroll and made a name for itself by simplifying payroll with its cloud-based platform. With payroll as its central service, Gusto is best for small businesses that find their most time-consuming HR task is payroll but might be interested in adding a few additional services.

Pros

  • Easy to use
  • Simplifies payroll

Cons

  • Advanced HR features not available on all plans

Pricing

Gusto has four pricing plans. These range from the Basic Plan for $19/month plus $6/month per person, which offers basic payroll, all the way to the Concierge Plan, which costs $149/month plus $16/month per person and comes equipped with multiple tools for payroll and HR.

Features

Best HR software

While the HR options are limited, Gusto does cover onboarding employees with a seamless online program and helping your business stay compliant. Available at the third pricing tier, Gusto offers the following HR services:

  • Employee directory and surveys
  • Custom employee handbook
  • HR and compliance support

Upgrading to the Concierge service, the most expensive Gusto plan, gives you access to additional HR tools, including:

  • Customizable onboarding tools
  • Certified HR pros
  • HR resource center

When To Use Gusto

As a more payroll-centric company, Gusto is a great option for small business owners who might need simple, but not sophisticated, HR solutions. The interface is user-friendly on both the employee and administrative sides. If payroll is your company’s biggest headache, Gusto’s system is the best choice.

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2. Zenefits: Best Advanced HR Features

Zenefits



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Best small business HR software for features and options.

Zenefits deserves a pat on the back for relaunching its entire platform a few years ago and building its company from the ground up after a few scandals rocked the Silicon Valley darlings. The new Zenefits focuses on affordable HR options that offer more features than the competition.

Pros

  • Numerous features
  • Easy to use

Cons

  • Unsuited for businesses with fewer than 5 employees

Pricing

Zenefits has three pricing plans. Pricing starts at $8/month per employee for the Essentials plan up to $21/month per employee for the top-tier Zen plan. The more expensive the plan, the more advanced features you can access — features including performance management and employee engagement surveys.

Payroll is not included in any of the plans and will cost an additional $6/month per employee. Additional add-ons include advisory services for $8/month per employee and the ability to use your own broker to manage employees for $5/month per employee.

Features

Best HR software

Zenefits core features included with all plans include:

  • Offer letters
  • Background checks
  • Self-onboarding with a mobile app
  • Employee directory and company organization chart
  • Automated workflows
  • Time-off requests/tracking
  • Numerous reporting options
  • Document management
  • Compliance services

All plans also include time & scheduling, integrations, and access to the Zenefits mobile app. More expensive plans include these advanced features:

  • Compensation management
  • Performance management
  • Well-being
  • Employee engagement surveys
  • People Hub

When To Use Zenefits

With similar pricing to Gusto but more HR options with its core package, Zenefits is likely to be an asset for small businesses with advanced hiring/performance review/termination requirements. Zenefits is loaded with HR features and offers competitive pricing, which is why it’s one of our top picks for HR software.

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3. BambooHR: Best Intuitive HR Software

BambooHR



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Best small business HR software for intuitive human resources management.

The functionality of BambooHR’s platform leads the competition with its ease of use, its intuitive interface for both employees and administrators, and its ability for customization. This award-winning software is loaded with advanced features to help simplify the HR process throughout the employee lifecycle.

Pros

  • Easy to use
  • Intuitive UI

Cons

  • Some essential features only available as paid add-ons
  • Non-transparent pricing

Pricing

BambooHR has two plans but unfortunately does not offer pricing details online. Instead, the company requests that you get a personalized price quote by phone or through its website. A general price range provided by customers that have used this software is $6 – $8/month per employee.

Features

Best HR software

BambooHR offers two different plans: Essentials and Advantage.

Both plans include the following:

  • Time-off management
  • Employee directory and company organization chart
  • Employee records
  • Benefits tracking
  • Document storage
  • Standard workflow and approvals
  • Standard reporting

Upgrading to the Advantage plan gives you access to more features, such as:

  • Onboarding/offboarding
  • Application tracking systems
  • Full company branding/customization
  • Training tracking
  • Webinar library
  • Customization options

BambooHR includes time tracking and performance management programs as add-ons. For payroll, the company partners with TraxPayroll to sync up data related to benefits, PTO, and compensation.

When To Use BambooHR

If a small business needs a comprehensive human resources management system, BambooHR comes with all the foundational requirements to manage your employees. It aims to make HR easy and intuitive even if a company doesn’t have a specific HR department/team, and its functionality for HR on the administrative end is designed for the novice/DIY small business owner.

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4. Namely: Best For Large Businesses

Namely



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Best for businesses with 50+ employees.

For mid-sized/larger companies with 50+ employees, Namely is a solid choice that offers an evolving user experience. Its top-of-the-line human capital management program has an easy interface with modern functionality. Best of all, Namely’s dedication to excellence in HR pushes the company to keep its finger on the pulse of this changing landscape and respond with business owner’s needs at the forefront of its decisions.

Pros

  • Advanced features
  • Suited for large businesses

Cons

  • Expensive
  • Unsuited for small businesses

Pricing

Unfortunately, Namely does not publish its pricing on its website. When doing our complete review, our company was quoted $30/month per employee for base pricing. Adding payroll services brought the cost up to $60/month per employee. There is also a one-time implementation fee per employee. Contact Namely to learn more about pricing that’s specific to your business.

Features

Best HR software

Namely’s basic HR package includes:

  • HR suite
  • Onboarding with eSignature
  • Employee performance management
  • Company news feed with social engagement abilities
  • HR compliance database
  • HR analytics and HR reporting

Set up as an HR-centric program, Namely’s payroll and benefits management tools are available but at an additional cost.

When To Use Namely

Namely is best for larger companies on the hunt for an HR-specific platform. While Namely’s platform is beautiful, it is also on the expensive end of the spectrum. However, its automation of advanced HR features could substitute/ease the workload of current HR employees.

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5. Paycor: Best For Smaller Businesses

Paycor



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Best small business HR software for businesses with 10 employees or less.

Paycor is a great one-stop-shop for a small business’s HR and payroll requirements. The company focuses on ease of use and streamlining its interface, and it is fully committed to listening to its clients and adapting/updating its software to respond to feedback. The options at this price point make Paycor a contender for small businesses looking for a simple platform at a competitive cost.

Pros

  • Built-in payroll included in all plans
  • Easy to use
  • Easy to set up

Cons

  • Non-transparent pricing
  • Limited benefits administration features

Pricing

For businesses with fewer than 40 employees, Paycor offers three pricing plans that range from $99/month – $199/month. The more expensive the plan, the more features you can access.

For businesses with 40+ employees, custom packages are available. Contact Paycor to learn more and get a price quote.

Features

Best HR software

All plans include full-service payroll as a foundation and not an add-on. All plans also include the following:

  • Tax filing
  • Reporting
  • Self-service garnishments & child support
  • Paycor Mobile

If you upgrade to one of the higher tier packages, you can also access features including:

  • Online onboarding with assistance
  • Full-service payroll
  • HR support center with 1:1 guidance
  • Hiring wizard
  • Advanced analytics

When To Use Paycor

Paycor’s basic packages do not include time management software, employee scheduling software, recruiting and application tracking, benefits administration, and learning modules. A small business with fewer than ten employees might not need some of these extras, however, and can find good value in the product for its foundational capabilities.

Read our in-depth review

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Choosing The Right HR Software For Your Small Business

When it comes to picking the right HR software for your small business, it helps to know what you need. If payroll is your biggest headache, you want to find a platform that meets your payroll needs first. If you hate the manual onboarding processes and the paperwork is taking years off your life, then you want to find an HR platform that takes that process online.

Automation of HR is fairly new, but the benefits for small businesses are immense: Where a small business was priced-out of running enterprise-level HR services, now the market is booming. As each company prices its services differently, you must prioritize your needs. However, no matter what, outsourcing HR saves small businesses money in the long run. A yearly software expense does eliminate the potential need for a full-time HR manager, relegating those duties within your company and saving on salary costs.

Any HR software worth checking out should have options for syncing employee information, managing payroll, assisting with onboarding, running benefits administration, managing worker performance, and navigating all aspects of your company’s legal HR compliance requirements.

Ultimately, HR is about hiring the best people, growing the best people, and retaining the best people for your company’s growth. HR is also about company culture and setting the stage for what work looks like at your business: An easy system for both employees and administrators will save you time and hassle. Look for programs that have highly-rated mobile apps or whose functionality has a modern/social media feel to its presentation.

No matter which option you choose, always remember to do your research, take advantage of free trials, and fully explore your options before making a commitment. Good luck!

FAQs About HR Software

What is HR software?

Human resources software, or HR software, is software that is used to simplify human resources tasks. HR software makes it easy for businesses to perform a variety of tasks, including but not limited to completing onboarding tasks, maintaining legal compliance, running payroll, managing benefits, and maintaining employee records.

What is HRIS software?

Human resources information system software, or HRIS software, is software that helps you manage and maintain information on your policies, procedures, and personnel. HRIS software may offer features such as payroll processing, employee hour tracking, and an employee directory.

What is the best small business HR software?

The best small business HR software is determined by the needs of your business. For example, if you want lots of different features and customization options, look at software like Zenefits. If you want to simplify payroll, give Gusto a try. All of the options on this list are reputable software programs that may best fit the needs of your business.

How much does HR software cost?

The cost of HR software varies by a number of factors, including the size of your business and the features you need. On the lower end, expect to pay around $6 – $8/month per employee. On the higher end, you may pay $60+/month per employee.

Are there any free HR software options for businesses?

There are free HR software options for small businesses, but many of these options are quite limited in functionality. Start your search with our five picks for the best free payroll and HR software.

Do I have to have an HR manager for my business?

It’s never a bad idea to have an HR manager for your business. If you’re a smaller business, you may be able to operate without an HR manager or only use one part-time if you have the right HR software. For businesses with 50+ employees, it’s generally a good idea to have an HR manager on your staff.

In Summary: The 5 Best HR Software Systems

  1. Gusto: Best HR software for payroll.
  2. Zenefits: Best HR software for advanced features & options.
  3. BambooHR: Best intuitive & customizable HR software.
  4. Namely: Best for businesses with 50+ employees.
  5. Paycor: Best for businesses with 10 employees or less.
Shelbi Wescott

Shelbi Wescott

Writer at Merchant Maverick
Shelbi Wescott is a writer and educator from Portland, Oregon. When she isn't writing about ways to help small businesses, she is a published author churning out pages for her science-fiction and mystery books. In 2015, her book After Life won an Honorable Mention for Best YA Mystery from the Library Journal. (It has ghosts. And mystery.) Shelbi has both a BA in English Literature and a Masters in Teaching from Lewis and Clark College.
Shelbi Wescott
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