21st September 2023

HR software for small businesses

Streamline your HR processes and save time and money

Small businesses face a number of challenges when it comes to HR. They often don’t have the time or resources to manage HR tasks manually, and they may not have the expertise to stay up-to-date on the latest HR regulations. 

HR software can help small business owners overcome these challenges by streamlining or even automating HR processes, reducing administrative burdens, enhancing compliance, and improving overall efficiency in managing their workforce.

The right HR software can help you:

  • Track leave and absences
  • Manage employee performance
  • Store and organise HR documents
  • Plan rotas and shifts
  • Implement accurate time tracking
  • Manage expenses, training, recruitment, and more

In this article, we’ll look at the benefits of using HR software for small businesses, the features you can expect, and how to choose the right solution for your business.

What is HR software, and why do small businesses need it?

HR software is typically a suite of tools that can help small businesses automate and streamline their HR processes, from recruitment and payroll to performance and time tracking. Some common features of HR software include:

Employee data management

Small businesses can use HR software to centralise employee data, making it easier to access and manage information related to personnel, such as contact details, employment history, performance reviews, and more.

Payroll processing

Many HR software solutions include payroll processing capabilities. This helps small businesses accurately calculate and disburse employee salaries, withhold taxes, and generate payroll reports, ensuring compliance with tax regulations.

Recruitment and onboarding

Some HR software offers tools for managing the recruitment and onboarding process. Small businesses can use these features to post job listings, track applicant information, conduct interviews, and streamline the new hire orientation process.

Benefits administration

Managing employee benefits can be complex. HR software can assist in enrolling employees in benefits programs, tracking contributions, and managing open enrolment periods.

Time and attendance tracking

HR software can help small businesses monitor employee time and attendance, which is crucial for accurate payroll processing and compliance with employment laws.

Employee self-service

Many HR software solutions offer self-service portals for employees, enabling them to update personal information, request time off, access pay stubs, and review their benefits. This reduces the administrative burden on HR staff and management.

Other common features

  • Document management
  • Reporting and analytics
  • Rotas and shift planning

Sometimes you will need multiple apps or bits of software to cover these features. However, there are some ‘HR-in-a-box’ solutions out there that are a one-stop shop for all the HR features you could ever need.

‘HR-in-a-box’ software solutions

An HR-in-a-box software solution is a pre-packaged suite of HR software that can be used by small businesses to automate and streamline their HR processes. These solutions typically include features for onboarding, payroll, benefits administration, time and attendance, and employee self-service.

One of the leading ‘all-in-one’ HR software solutions is BreathHR – easy-to-use HR-in-a-box software designed for small businesses based in the UK. BreatheHR is more cost-effective than its competitors, and importantly, there are no long-term contractual agreements.

Learn more about HR-in-a-box software

Benefits of using HR software for small businesses

Streamline HR processes

HR software can automate many time-consuming HR tasks, such as onboarding, payroll, and benefits administration. This can free up your time so you can focus on other aspects of your business.

Improve compliance

HR software can help you stay up-to-date on the latest HR regulations. This can help you avoid costly fines and penalties.

Protect your data

Good HR software will include data security features to protect sensitive employee information, ensuring that it is only accessible to authorised personnel.

Save time and money

HR software can save time and money by automating tasks and reducing costly errors. Self-service portals can also reduce the time you spend on repetitive admin tasks and emailing information that employees can easily access for themselves.

Improve employee productivity and engagement

HR software can help you improve employee productivity and engagement by providing employees with a self-service portal where they can manage their own information and requests.

Attract and retain top talent

By offering a comprehensive HR solution, you can show potential employees that you are committed to managing your workforce as effectively as possible. This can make it easier to attract and retain top talent.

Improve decision-making

HR software can provide you with valuable data and insights about your workforce. This data can help you make better decisions about your business, like when allocating resources or developing training programs.

Avoid distractions

With the right HR software in place, you can avoid the distractions that come with managing HR processes manually. Instead, you can focus on the more strategic tasks that move your business forward. 

Support growth

As your business grows, HR software can help you to manage your workforce more effectively. This can help you to scale your business efficiently and sustainably.

How to choose the right HR software for your small business

There’s a lot to think about when committing time and money to your new HR software. So it’s essential to plan ahead and think about what you need so you can make a well-informed and considered decision.

Decide on your budget

HR software can range in price from free to hundreds of pounds per month. It is crucial to find a solution that fits your budget now and in the long term.

Think about what features you really need

When choosing HR software, it is important to consider the specific needs of your business. Some factors to consider include the number of employees you have, the size of your budget, and the features you need. 

Your business’s size determines the features and functionality you need in your HR software.

Compare features and pricing

Make a list of the features you need in your HR software, such as payroll, benefits administration, and recruiting. You can then compare potential solutions based on the features you actually need, as well as price, avoiding the common trap of choosing the cheapest available product.

Consider usability

It is also important to ensure that the HR software you choose is easy to use and navigate. You don’t want to spend hours figuring out how to use the software or constantly refer to documentation in the first few months of usage.

Ensure support is available

Ensure the HR software vendor offers good customer support in case of any questions or problems. Sometimes, this will include a knowledge base of helpful user guides, live online support, phone support, email support, and a forum where existing customers ask (and even answer) support queries.

Read reviews

It’s reassuring to know that other small businesses have left positive reviews about the HR software you’re considering before you commit to making a purchase. 

It’s unusual for software and apps not to have reviews online somewhere – consider the following situations to be a ‘red flag’:

  • There are only a small number of reviews
  • There are no online reviews at all
  • The average review is less than four stars

It’s best to avoid the software if you come across these scenarios.

Get quotes from multiple vendors

If you’re commissioning custom-built HR software or the HR software requires complex installation, always get at least three quotes from potential providers. This will ensure you can make a fair and accurate assessment of the vendor’s capabilities and pricing.

Have a training and roll-out plan

Once you have chosen HR software, it is essential to train your employees on how to use it. This will help ensure that they can use the software effectively and efficiently. You can also contact us for support with HR training.

Not sure what HR software you need?

If you’re unsure what exactly you require from your new HR software or what solution would give you the most value, please get in touch.

Get advice about everything HR-related from the people management experts

For outsourced HR services and HR advice tailored to meet the needs of your business, call the people experts on 01382 211 222 or 01738 632 561. We are open from 9am to 5pm, Monday to Friday.