In the fast-paced world of small businesses, finding efficient solutions to manage human resources can be a game-changer.

The best HR software for small business automates payroll, performance management and employee onboarding, freeing up valuable time for you to focus on growing your business. However, with a plethora of options available, choosing the most suitable software can be overwhelming.

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Fear not, for we’ve researched for you! In this article, we’ll explore the top five HR software solutions best suited for small businesses.

Best HR Software for Small Business

Imagine being a small business owner with a growing team of talented individuals. Juggling employee records, time-off requests and payroll calculations on spreadsheets consume lots of your precious time and energy. As your company expands, so do your responsibilities — the daunting task of managing HR processes.

One day, you stumble upon a game-changing solution: human resources software for small business. As a result, your once-overwhelming business transforms into an efficient machine. That sounds like a comprehensive win, right? But how to get there?

Here are the top five HR solutions that bring transformative power to your small business and propel you toward long-term growth.

Rippling

Rippling is a game-changing cloud-based HR solution for small businesses. It offers seamless handling of employee data, payroll, benefits and more.

With a single click, Rippling lets administrators manage HR operations effortlessly. Its key capabilities are custom reporting and graphs, digital document management, time tracking and workflow approval management. Users can also automate administrative tasks from onboarding new hires to offboarding.

Rippling’s streamlined HR and IT management can transform how you manage your employees and their data.

Admin dashboard by Rippling. Source

Top Benefits

• Workflow Automation: Rippling offers comprehensive workflow and approval automation capabilities to ensure seamless processes. Users can also set up personalized hiring workflows, tailor interview stages to specific positions and effortlessly create customized approval flows and alerts for all their open roles.
• Integrations: Rippling offers seamless integration with various platforms like Zendesk, 15Five, DocuSign, Box, Xero, Deputy, Jira, JazzHR, Betterment and others.
• Hardware Management: With Rippling, you gain complete control over the lifecycle of your employees’ devices. It also lets you schedule device disablement, data wiping and even handle device storage until it’s needed again.
• Real-Time Monitoring: Rippling lets you view employees’ devices and monitor app activity in real-time. You can track who used which app, when, and where, along with the location log.
• Expense Management: Rippling allows reimbursements processing in your local currency. Employees can upload receipts from mobile devices. Additionally, it enables translating the receipt’s line items into other languages and converting the currency for review.

Primary Features

• Job Posting and Onboarding: Publish available opportunities to various job boards, such as Indeed, LinkedIn, etc. It also lets you simplify setting up new employees’ payroll, benefits, devices and apps during onboarding.
• Payroll Management: Run payroll across the organization and send payments to employees via direct deposit or check. It also calculates and files local, state, and federal taxes automatically. You can also enable warning alerts or notifications for payroll.
• Benefits Management: Manage employee benefits with open enrollment to benefits plans — medical, dental, commuter and others. Its self-service portal lets you view and update personal information.
• Time Management: Track employees’ time and let them clock in and out with a tablet kiosk, mobile app, or desktop. It also includes geolocation restrictions, QR codes and selfie clock-ins for geo-validation. It also offers custom time tracking alerts via email, phone calls or time card displays.
• Survey Management: Build a survey from scratch or use the preloaded survey templates. Trigger event-based surveys for onboarding, pulse and exits. You can also set start and end dates for the surveys while building them.

Limitations

• Doesn’t offer benefits management through its native mobile applications.
• Doesn’t offer a free trial.
• Only administrators can access the payroll calendar.

Product Pricing

Rippling offers flexible pricing starting at $8 per user per month. Its products are billed on a per-employee, per-month basis, with some including a monthly base fee.

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Gusto

Gusto is a web-based HRIS for small businesses. It handles employee benefits, compliance, direct deposit, employee self-service, employee management, payment processing, and taxes, all in one place.

By leveraging its automation, calculators, and various administrative and HR modules, you streamline the payroll process — saving time and reducing errors. Gusto scans the laws of over 50 states, ensuring accurate state and federal payments and helping you steer clear of penalties.

A peek into hiring and onboarding by Gusto. Source

Top Benefits

• Native Integrations: Gusto seamlessly integrates with various software categories like accounting, point of sale (POS) and learning management. Its native integrations cover Xero, 15Five, ActiveCampaign, Asana, Clover, Trainual, TSheets, QuickBooks and more.
• eSignatures: Gusto allows you to customize signature fields and efficiently collect electronic signatures to ts, streamline the process of obtaining necessary employee signatures. In the long run, this capability eliminates physical paperwork and accelerates workflows.
• 529 College Savings Benefits: Gusto allows employees to participate in 529 plans, allowing them to save for future educational expenses, as part of its comprehensive benefits package.
• Anonymous Surveys: You can create surveys that ensure employee anonymity, encouraging honest and open responses. You can analyze and compare the feedback over time to track trends, identify improvement areas and measure the effectiveness of implemented changes.
• Federal R&D Tax Credit: Gusto provides small businesses access to the Federal R&D Tax Credit to encourage greater investment in research and development. This incentive allows eligible organizations to claim a credit of up to $250,000 per fiscal year. The credit is applied against Social Security taxes and has the added benefit of carrying over into future years if not fully utilized.

Primary Features

• Job Posting and Onboarding: Manage and track job applicants by posting job openings on popular job boards like LinkedIn and Indeed. Create personalized offer letters to ensure a tailored approach to employment offers. To facilitate smooth onboarding, it offers customizable checklists that guide organizations through the necessary steps to ensure a personalized onboarding experience.
• Payroll Management: Utilize unlimited payroll runs and an innovative AutoPilot capability, which automates the payroll process each pay period. Handle your payroll needs effortlessly, saving time and ensuring accurate and timely employee payments. Gusto also simplifies the issuing and filing of W2s and 1099s, including state and federal taxes. You can rely on it to generate and distribute the forms to streamline the tax reporting process.
• Benefits Management: Manage your employees’ benefits, including health, dental, vision, HSA and FSA. It streamlines employee benefits administration for seamless enrollment and easy management of plan details. It also offers open enrollment to enable employees to enroll in benefits, add dependents and review their selected plans conveniently.
• Time and Attendance Tracking: Simplify your team’s time and attendance management, including hours worked, time off, holidays and workforce costs. Enable employees to clock in and out with a desktop or mobile application. Gusto also offers added transparency by allowing verification of hours through geolocation.
• Performance Management: Collect self-evaluations and manager reviews to foster a culture of continuous improvement. You can also gather and analyze valuable feedback and set up and track review cycles.

Limitations

• Doesn’t have an in-built applicant tracking system.
• Doesn’t provide in-built goals or OKRs management.
• Doesn’t offer peer reviews as part of performance management.

Product Pricing

Gusto plans are month-to-month and can be canceled at any time. Its three pricing plans are:

• Simple Plan: You pay base price of $40 per month and $6 per person per month.
• Plus Plan: You pay base price of $60 per month and $9 per person per month.
• Premium Plan: You pay quote-based pricing.

Gusto also offers add-on benefits and insurance options for an extra cost.

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Paylocity

Paylocity stands out as an all-around cloud-based HRIS solution tailored for small businesses. It handles talent acquisition, time and labor management, and other core processes. Paylocity also offers multiple configuration options that allow companies to customize the platform for their specific needs and workflows.

Paylocity helps streamline your payroll processes, maximize efficiency and manage your workforce effectively. The tool also prioritizes data security with robust measures like encryption, real-time backups and secure data centers.

Time & attendance management by Paylocity. Source

Top Benefits

• Native Integrations: Paylocity seamlessly integrates with various tools from different categories, offering native integrations to enhance its functionality. These platforms include Clover, Concur, 24HourFlex, 7Shifts, Alight, ASi, BreezyHR, Betterment, Bonusly and more.
• Workflow Automation: You can automate and streamline various workflows, including employee status, position or compensation changes. It helps eliminate manual, time-consuming tasks and create efficient workflows for productivity and accuracy.
• Self-Service Portal: With a convenient self-service portal accessible through desktop and mobile applications, you can enhance employee engagement, streamline administrative tasks and foster a more connected and informed workforce.
• Temperature Scanning: Use advanced features to assess employee health, including thermal temperature scans and attestation prompts for follow-up questions. With thermal temperature scans, you can quickly and accurately monitor employee temperatures and identify potential health concerns.
• AI-based Capabilities: You can streamline communication and announcement drafting with AI Assist, a proprietary AI and machine learning algorithm. It helps generate ready-to-send communications effortlessly, saving valuable time and ensuring effective messaging.

Primary Features

• Job Posting and Recruitment: Manage job listings and automatically post them across multiple job portals, maximizing visibility and attracting top talent. Utilize real-time access to candidate information so hiring teams can make informed decisions swiftly.
• Payroll Management: Preview, revise, and verify payroll registers in real-time before processing payroll. Automatically calculate employees’ state and local taxes based on their home and work locations. You can also view employees designated for prorated or retro pay, simplifying the calculation of payroll changes and facilitating efficient compensation adjustments.
• Benefits Management: Handle employee benefits like HSA, FSA, medical, dental and commuter benefits. Your employees can review their account balances and file claims anytime on mobile or desktop. The tool also streamlines the open enrollment process, allowing employees to choose their preferred benefit plan and specific offerings.
• Time and Attendance Management: Ensure accurate time tracking and prevent fraudulent practices with secure options like fingerprint scans, facial recognition and photo capture. It lets employees clock in and out seamlessly from their mobile devices using geofencing, IP address verification and clock restrictions. Employees can also easily view their current and future accrual balances and request time off.
• Compensation Management: Create competitive employee compensation packages using employee data and budget planning. Ensure compliance with compensation laws and reflects the current labor market through accurate compensation data. Users can also implement automated compensation plans, saving time and ensuring consistency in compensation practices.

Limitations

• Doesn’t offer a free trial.
• Doesn’t offer succession planning as a part of its capabilities.
• Its timecard adjustments can be glitchy.

Product Pricing

Paylocity pricing is based on a per employee per month (PEPM) model, which varies depending on the selected plan features.

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Paycor

Paycor is a comprehensive cloud-based human resource software designed for small businesses. It offers all the tools, from hiring to payroll management, to streamline core HR functions and automate HR processes.

Users can customize the platform to meet the specific needs of various industries, such as food service and healthcare. With Paycor, users can effectively manage recruiting, talent acquisition, development, learning and more, making it a versatile SaaS solution for businesses across different sectors.

Recruiting dashboard of Paycor. Source

Top Benefits

• AI-based Capabilities: AI-based capabilities help curate a prioritized list of candidates for hire. Paycor Smart Sourcing offers an AI-based recruiting capability to automate sourcing and increase candidate diversity.
• Succession Planning: Create career strategies, facilitate internal movement, and identify talent risks with an organizational chart. You can also define the role responsibilities and set expectations to receive feedback about the development plan.
• Employee Engagement: Gather and convert employee feedback into real insights with employee pulse surveys. The solution also offers Natural Language Processing to perform sentiment analysis.
• Employee Scheduling and Budget Capping: Control labor costs and track daily expenses by monitoring schedules, shifts or jobs and establish budget caps. You can also set a daily or weekly scheduling rule with minimum rest times.

Primary Features

• Recruitment Management: Simplify candidate sourcing by allowing users to automatically post job openings to popular platforms like Indeed, LinkedIn, Glassdoor and ZipRecruiter. Facilitate employee referrals by sharing job posts on various job portals. Furthermore, you can use it to streamline the interview feedback process by automatically displaying scorecards on recruiters’ screens and ensuring comprehensive feedback collection.
• Compensation Planning: Manage company-wide compensation and salary bands efficiently. Ensure that compensation aligns with your company’s budget, local job market and government regulations. The tool also helps plan and execute pay increases, bonuses and rewards to promote fair and competitive compensation practices.
• Time and Attendance Management: Track absence and attendance with multiple timekeeping options like Wi-Fi connectivity, PIN entry, badge proximity entry and a multi-language badge reader to record every employee’s time punch. You can also use geo-validation to capture the exact time and location where employees punch in or out.
• Payroll Management: Maintain and manage payroll records, deductions, state and federal tax filings and garnishments. It lets employees choose how to receive their pay — direct deposit, pay cards or on-demand payment. You can also enable compliance warnings and alerts to identify missing information and ensure accurate tax setup.
• Benefits Administration: Set rules for benefits open enrollment and compare benefits plans side-by-side for health insurance, 401k, FSA, dental insurance and more. Its self-service functionality lets employees adjust or update their profiles and demographic information and add major life events for accurate and up-to-date benefit administration.

Limitations

• Doesn’t offer a free trial of the product.
• Doesn’t allow setting blackout dates for employee time offs.
• Slow reporting with buggy updates.

Product Pricing

Paycor offers four pricing plans:

• Basic Plan: Includes features from payroll, reporting, and garnishments.
• Essential Plan: Includes features from the Basic Plan and additional features like general ledger, HR support center and more.
• Core Plan: Includes features from the Essential Plan and additional features like expense management, employee import and more.
• Complete Plan: Includes features from the Core Plan and additional features like talent development and more.

Paycor provides pricing of all the plans upon request.

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BambooHR

BambooHR is a cloud-based HRIS for small businesses across industries. It simplifies data collection throughout the employee lifecycle by storing information in a centralized database for easy access by managers and employees.

BambooHR supports core HR processes like hiring, onboarding, compensation administration, performance management and employee self-service. It also offers customization options, multi-administrator functionality and a native mobile application for Android and iOS devices.

Payroll management by BambooHR. Source

Top Benefits

• Native Integrations: BambooHR seamlessly integrates with 50+ third-party applications across categories, including Lattice, Deputy, Human Interest, Slack and more. It also provides services for custom integrations through a dedicated developer, ensuring flexibility and compatibility with other software systems.
• Workflow Automation: Manage requests efficiently by creating automation workflows. Managers and administrators can easily approve or deny requests, while requesters and admins can track progress through a visual progress bar, informing them about approvals.
• Self-service Portal: Portals provide access to time off accruals, time off requests and company directories. Managers can access specific reports and documents through self-service portals and handle time off requests. You can also customize the permission levels to ensure appropriate access.
• eSignature: Enable electronic signature requests for all or selected employees, accompanied by personalized messages. Access the reminder feature for outstanding forms. Users can also track the status of completed and pending forms.
• Offboarding: Automated checklists ensure adherence to regulations during compliant offboarding. It streamlines the process with automatic reminders to admins, managers and relevant parties regarding exit procedures.

Primary Features

• Applicant Tracking System: Simplify job posting by allowing users to post open positions on popular job boards like Indeed, Glassdoor, and ZipRecruiter, as well as on social media platforms such as LinkedIn, Facebook, and Twitter. The BambooHR Hiring app helps review candidates, coordinate with hiring team members and directly communication with applicants through mobile.
• Onboarding: Streamline the onboarding process with self-onboarding capabilities for employees, configurable welcome emails and IT checklists. Customize the new hire packets to provide crucial information about day one expectations, team introductions and assigning essential onboarding tasks.
• Compensation Planning: Configure regular salary or hourly pay with additional components like overtime, bonus pay, retirement benefits, health benefits, stock options and non-monetary incentives. It also supports indirect compensation elements such as relocation expenses, tuition reimbursement, employee assistance, learning and development programs and career advancement opportunities.
• Time Tracking: Enable your employees to clock in and out from the home screen or mobile phones with a user-friendly punch card. Managers can conveniently review and approve timesheets with automated reminders for timely submissions. Track hours spent on specific projects or tasks and make necessary edits.
• Payroll Management: Provide easy access to and control over employees’ pay-related information — pay stubs, direct deposit setup, deductions and federal withholdings. Streamline tax filing for U.S.-based workers by handling federal, state, and local tax submissions.

Limitations

• Doesn’t allow on-demand pay processing or advance salaries.
• Doesn’t offer in-built biometric time clocking.
• Lacks custom report filters.

Product Pricing

BambooHR offers per-employee, per-month pricing for companies with 20+ employees. Its two pricing plans are available upon request:

• Essential Plan: Includes basic features such as employee records, reporting and analytics and more.
• Advantage Plan: Includes everything from Essential Plan and onboarding, offboarding, open API access and more.

Companies with less than 20 employees are charged a monthly flat rate. Annual contracts are not required.

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How We Choose Products

Our team of writers and analysts at SelectHub is committed to giving you the best recommendations based on our data. To make our list, products had to meet two criteria:

1. Closely match the topic
2. Earn a top-5 analyst score in our selection platform

Our analyst scores are based on an in-depth research process using primary and secondary sources. This includes SelectHub Analyst Briefings, direct communication with vendors, and reviewing materials such as user reviews, product brochures, specification sheets, case studies, user manuals, and technical documentation.

Our platform’s Scoring Engine processes the research and computes the analyst score. The score also factors in platform settings such as industry and company size.

Learn more about our research methodology and editorial standards

How To Choose the Best HR Software

When choosing the best HR software for your small business, there are several key factors to consider.

• Evaluate your specific HR needs and determine which features are essential for your business.
• Consider software scalability. As your small business grows, you’ll want a solution that can accommodate your expanding needs without incurring significant additional costs.
• Look for a user-friendly interface and intuitive navigation to make it easier for everyone to use the software effectively.
• Integration capabilities are crucial. Check if the software can integrate with your current systems seamlessly, such as accounting or applicant tracking software.
• Ensure that the software provider offers robust security measures and complies with relevant data protection regulations.
• Evaluate customer support and training options. Look for a provider that offers reliable customer support and training resources.
• As a small business, budget constraints are often a key consideration. Look for solutions that offer a pricing structure that aligns with your budget while providing a good return on investment.

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FAQs

Do small businesses require HR? And why?

Straight up: Yes. Small businesses require HR because it plays a vital role in their functioning for several reasons:

• HR ensures compliance with employment laws and regulations so you can focus on other pressing responsibilities. It helps navigate legal complexities and minimize the risk of legal disputes or penalties.
• HR handles employee-related matters, including recruitment, onboarding, performance management, and employee relations. It ensures quality talent, supports employee development and maintains a positive work environment.
• HR manages payroll, benefits administration, and maintains employee records, ensuring accurate and timely processing. It also helps create and implement HR policies, procedures and employee handbooks.
• HR acts as a liaison between management and employees. It addresses concerns, conflicts and promotes effective communication.

Do startups need HR software?

Yes, startups need HR. While startups may initially have a small team, having HR functions in place helps ensure legal compliance, effective employee management and a strong company culture from the start.

HR can assist with hiring, onboarding, performance management and other crucial HR processes that contribute to the growth and success of a startup.

Is HR software suitable for small businesses with limited resources?

Yes, HR software can be beneficial for small businesses with limited resources. It helps automate manual HR tasks, reduce administrative burden and improve overall efficiency.

Many HR software solutions offer pricing plans tailored for small businesses, making them cost-effective and scalable options.

What integrations are important for HR software for small businesses?

Common integrations are accounting software, time and attendance systems, applicant tracking systems, performance management tools and collaboration platforms.

Assess your existing software ecosystem and determine which integrations are crucial for your HR processes. Look for HR software that offers integrations with the tools you already use or plan to use in the future.

What is the cost of implementing HR software for a small business?

Generally, small business HR software can range from a few hundred dollars per year to a few thousand dollars per year, with additional costs for implementation, training and support services.

It’s important to consider the features, scalability, and support offered by the software provider when evaluating the overall cost.

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Next Steps

HR tools are invaluable for small businesses seeking to streamline their human resources processes. From recruitment and onboarding to payroll management and employee self-service, these tools offer all the features designed to enhance efficiency, save time and ensure compliance.

By automating repetitive tasks, empowering employees with self-service options and providing robust data management capabilities, these tools allow you to focus on strategic initiatives and employee development.

Investing in the right HR tools can significantly impact your business’s overall productivity and success. Our free comparison report makes it easy to see how leading HR systems stack up.

Which of these HR software for small business stand out to you? And why? Share your thoughts and insights in the comments below.