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
| Company | Summary | Next Steps |
|---|---|---|
Gusto  | Best small business HR software for payroll | |
Zenefits  | Best small business HR software for features and options | |
BambooHR  | Best small business HR software for intuitive human resources management | |
Namely  | Best for businesses with 50+ employees | |
Paycor  | Best small business HR software for businesses with 10 employees or less |
Read more below to learn why we chose these options.
The 5 Best HR Software
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
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 who find their most time-consuming HR task is payroll but might be interested in adding a few additional services. 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
- HR resource center
- Dedicated HR support team
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
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. 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 core features are:
- 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
That does mean that payroll, benefits administration, and time and scheduling applications are extra fees per employee. However, with all data synced, the HR department or owner will spend less time navigating between platforms.
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3. BambooHR
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. The Advantage platform has the most features and offers up the best human resource management options out of the bunch. BambooHR’s Advantage features are:
- Onboarding/offboarding
- Application tracking systems
- Full company branding/customization
- Training tracking
- Webinar library
- Time-off management
- Employee directory and company organization chart
- Employee records
- Benefits tracking
- Document storage
- Standard workflow and approvals
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. 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
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.
Set up as an HR-centric program, Namely’s payroll and benefits management tools are an extra expense. The 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
Namely is best considered for larger companies on the hunt for an HR-specific platform, and while that 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
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. All plans include full-service payroll as a foundation and not an add-on, but the majority of the HR components are available at the Complete level. Paycor’s HR features at the top-tier price ($199 a month for up to 10 employees) includes:
- Online onboarding with assistance
- Full-service payroll
- HR support center with 1:1 guidance
- Hiring wizard
However, some of the big needs in HR are add-ons. The 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.
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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.
A Last Look At Our Top Picks
- Gusto
Summary - Best small business HR software for payroll - Zenefits
Summary - Best small business HR software for features and options - BambooHR
Summary - Best small business HR software for intuitive human resources management - Namely
Summary - Best for businesses with 50+ employees - Paycor
Summary - Best small business HR software for businesses with 10 employees or less
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.
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