The HR software market is growing fast. Vendors are turning out more solutions, and businesses are buying them. According to the 2019 KMPG Digital Trends Survey, “two-thirds of HR executives believe that HR has undergone or is undergoing a digital transformation.”

But companies feel they’ll only succeed in driving digital transformation by making a large software purchase, which requires a reliable—and often large—budget.

What if you can’t afford to make a major technology purchase? What if you’re a small business or startup, and buying the latest incarnation of Peoplesoft sounds about as realistic as gifting employees a total of $10 million for their Christmas bonus?

Despite tighter budgets and limited IT resources, small businesses need to centralize workflows and be efficient, especially when it comes to HR. In this article, we’ll take a look at some of the best HR software for small businesses—modern, cloud-based systems with industry-leading functionality at an affordable price point.

• What is the Best Payroll Software for Small Business?
• Which HR Software is Best?
• What is HR software?
• How to Find the Best HR Software For Your Business
• How can HR Support the Business?
• What Benefits does HR Software Provide?
• How does HR Improve Business Performance?

What is the Best Payroll Software for Small Business?

the shocking part of payroll is the ridiculous length of time small business owners and bookkeepers spend on payroll and federal employment tax compliance management. Just consider: one in three small businesses report spending more than 80 hours – the equivalent of two full weeks of work – each year on federal taxes, including payroll (employment) taxes.

Read Also: Employee Management Software for Small Business

In addition, 11% of small businesses report spending over 10 hours a month on payroll management. With numbers like these, it is no wonder employers and bookkeepers are pulling their hair when it’s time to manage payroll. After all, payroll is the last thing you want to deal with, but it is the first thing you should get right. It’s a double-edged sword!

1. QuickBooks Online Payroll (QBOP)

The prom queen of payroll software is QBOP (QuickBooks Online Payroll). QBOP is definitely the most popular when it comes to online payroll software solutions (especially in North America but is also coming along in Australia, New Zealand, and the United Kingdom). It’s important to acknowledge that payroll systems are complex and rightfully so. That means that it takes time to learn how to use each one so wouldn’t you want to know how to use the most popular one?

Why choose QBOP?

• The most popular software solution, so very likely to be used for general accounting, inventory management, invoices, etc.
• Many integrations available
• Employee self-service portal
• Affordable for small businesses
• Versatility for various industries
• You can do in-house bookkeeping

2. Intuit Online Payroll (IOP)

Many bookkeepers may not be aware of the difference between QBOP and IOP. We’re here to set the record straight. IOP is best for bookkeepers or payroll services companies that run payroll for many clients. It acts as a payroll center for all of a bookkeeper’s accounts manageable from one place and easily integrates with our Quickbooks and Intuit software. So, if you run accounting on QBOP then you can also run the payroll on IOP and integrate between them.

In addition, another difference between QBOP and IOP is that IOP can be offered as a white-labeled solution. That means that your clients will not be aware that IOP is being used as your payroll backend and you can market it as your own payroll solution. That should get some of those wheels turning.

Why choose IOP?

• If you run many payroll accounts, it’s more affordable than QBOP
• If you are already proficient in Quickbooks
• If you’re looking for a solution that easily integrates with Quickbooks solutions
• Client portal with various levels of access

3. Gusto

Nothing affects the length of time spent on payroll management like the application user experience. The word on the bookkeeping street is that Gusto is the most user-friendly solution available on the market right now, which makes Gusto one of the front-runners in the category. This is one of the reasons we expect to see Gusto grow its share on the market.

Why choose Gusto?

• Superb user experience
• Payroll reminders
• Employee self-service portal including employee onboarding
• Services available for both W-2 employees and 1099 contractors
• Unlimited monthly payroll runs
• Reasonable pricing

4. Paychex Flex

Paychex is one of the most popular payroll software for small business but also one of the more expensive solutions, mostly due to public demand. Rumor around the accounting department’s water cooler is that Paychex is robust but not simple, easy to use, or set up.

That can be a huge factor for small businesses when they’re looking for the best payroll software. Paychex requires a lot of personal information to get started and running reports comes with its share of red tape and added costs.

Why choose Paychex Flex?

• Great import and export capabilities
• Good cross-platform support for payroll and self-service functionality
• Useful payroll reminders
• Unlimited number of custom fields

5. RUN by ADP

The solutions offered by ADP, and specifically their small-business oriented RUN, are very similar to those offered by above mentioned Paychex – expensive but popular. This solution is for you if you prefer to send employees physical paychecks rather than direct deposit as ADP can (for an additional fee) print, sign, and mail paychecks on your behalf.

Why choose RUN by ADP?

• Popularity on the market – many accountants and bookkeepers are familiar with the interface
• Printing and mailing of paychecks
• Automatic wage garnishments and other withholdings

6. Sage Payroll

One of the cheapest payroll solutions out there for small businesses, Sage Payroll. Now it may lack the bells and whistles that other payroll software have to offer, but for many businesses, it is more than enough in terms of functionality. One of its main strengths is security – your payroll information in the cloud is fully encrypted, and user access permissions can be customized to ensure data security and integrity.

Why choose Sage Payroll?

• Superb reporting capabilities
• Affordable
• Custom user access permissions
• Top-notch security

7. SurePayroll

The jury is still out on SurePayroll’s ability to faithfully serve the needs of small businesses. While some claim it has a user-friendly and intuitive interface, others complain that the user experience is clunky and it takes a while before processes are properly streamlined.

In addition, some users are happy with the broad pre-defined set of fields and variables in the application database, and others despise the complex and long employee registration process. We’re not telling you this to provide you a wishy-washy review that’s neither here nor there. Payroll software has to be flexible and SurePayroll demonstrates their ability to be flexible through their user experience, which is a sign of a good payroll solution.

Why choose SurePayroll?

• Customizable dashboard
• Highly detailed employee profiles
• Excellent service and customer support

8. Wagepoint

If you’re looking for the best-rated service and support, you should really check out what Wagepoint’s offering. And since they’re Canadian, you can probably trust their claim to have the friendliest support and service staff around. In addition to clear and affordable pricing, Wagepoint offers a free trial period to let you try before you buy so that you can see just how helpful and friendly these Canadians (and their software) are.

Why choose Wagepoint?

• Superior service and customer support
• Free trial
• Affordable pricing

9. Xero

Here’s the thing, Xero is not just payroll software, it offers a web-based accounting system designed for small and growing businesses. In addition to payroll management, it has robust asset management capabilities, offers approval levels, inventory tracking and so much more. Therefore if you’re looking for an all-in-one small business accounting suite, this just might be it.

Why choose Xero?

• Thorough records and transaction forms
• Customizable reports
• 30-day trial option

10. PayCor Perform

Like many other payroll software solutions, PayCor is about much more than just payroll. It is a modular system that can be used for payroll alone, or use additional modules offered on the platform to manage all employee “lifetimes” within the company, from recruiting to departure. Did we already mention that flexibility is important to payroll software?

Why choose PayCor?

• Important notifications and reminders
• Ease of use
• Integration with additional PayCor Perform Modules for an all-in-one solution

Which HR Software is Best?

1. Namely

Namely is a web-based platform specializing in core HR and talent management for growing companies. Their product covers payroll and benefits administration, time tracking, performance reviews, and of course, serves as a system of record for all of your employee data. Namely also offers built-in social news feed and custom reports for individual and team metrics.

The system is designed to be adaptable and user-friendly, which makes it stand out against more complicated enterprise solutions. But Namely’s penchant for small and growing companies doesn’t mean they skimp on resources: business clients receive 24/7 customer service through a dedicated Namely account manager.

Namely has been used by thousands of small businesses across the globe, as well as some larger brands like Kayak, Mashable, and Vimeo.

2. JazzHR

Unlike PeopleMatter and Namely, JazzHR is a best-of-breed HR solution, meaning it’s designed for specialized use—in this case, applicant tracking and interview management. JazzHR helps companies post jobs, screen applications, and manage the interview process through a centralized, real-time platform.

Managers can create a custom recruiting stages with automated to-dos (e.g. follow-up emails, reminders), and add stakeholders to the process as users with varying permissions and privacy levels.

Post directly to job search sites like indeed, Glassdoor, and CareerBuilder, and use built-in SEO tools to make sure you’ve chosen the right title and job description. JazzHR also offers social recruiting, employee referral programs, applicant screening, background checks, resume review, branded career sites, interview guides, recruitment calendars, and more.

Although it doesn’t have a native mobile app, career sites and interfaces are automatically optimized for the device in use. Along with 3,000 other businesses, TechnologyAdvice has used JazzHR to more than double our team—from 20 employees to over 50 since 2013.

3. Cezanne

Cezanne offers comprehensive HR management tools that are accessible to smaller companies but designed to scale with future growth and advancement. The system is cloud-based and priced on a monthly subscription according to modules implemented and the number of users.

The core module, People Management, offers features for training and development, disciplinary actions and grievances, health and safety compliance, doc management, and reporting.

Clients can choose to add on any or all additional modules, including absence management, time tracking, performance management, and applicant tracking. Unlike larger vendors with complicated pricing structures, Cezanne offers each module for the same flat rate per user, so you know exactly what you’ll pay ahead of time.

Beyond its primary feature sets, Cezanne also provides workforce analytics tools and complementary solutions for payroll. The platform is accessible to employees and managers on the go through a native mobile app for Android and iOS devices.

4. BambooHR

BambooHR is a cloud-based core HR solution designed to meet small business administrative needs and give employees efficient self-service access. Although BambooHR doesn’t offer some of the robust features of its competitors, the price point is hard to beat, and the user experience is simple.

The web application serves as a central repository of employee information, such as job and salary history, benefits, and training. Employees can access company documents, request time off, as well as view and edit their personal data.

With varying levels of custom access, administrators can manage time-off requests, set accrual policies, and generate custom reports based on any data in the system. For expanded use, BambooHR integrates with many popular applications for applicant tracking, eSignatures, payroll, and performance management. The system is also accessible on mobile devices through native apps for iOS and Android.

5. Zenefits

Zenefits started out as a free, core HR solution, but their product (and company) has come a long way in recent years. Zenefits now offers built-in payroll, time tracking, native mobile apps, and impressive integrations in addition to the platform’s main functions: HR management and benefits administration.

Zenefits offers two tiers with a monthly subscription cost per employee plus add-on apps. What you pay will depend on which features you need, but in general, the cost is still much lower than solutions from the enterprise market. Zenefits boasted serving over 250,000 people across the U.S.

6. Zoho People

Zoho People is part of Zoho’s online suite of productivity apps for businesses. If you know anything about Zoho, you know they tend to play the less-expensive underdog role in a number of other software categories, and their human resource management is no exception.

People bills itself as a “complete online HR solution,” but if you look closer, it’s mostly an administrative HR tool with a basic performance appraisal feature. The good news is, if you need to expand your HR stack into recruiting/ATS, People integrates with Zoho Recruit (and for that matter, every other app in the Zoho universe). Other People features include time and attendance tracking, leave management, custom forms and permissions, and employee self-service.

Users can access the system online, or via native mobile apps for iOS and Android.

7. EffortlessHR

EffortlessHR is a Tucson-based provider of online HR software designed specifically for small and medium-sized companies. The platform itself covers personnel management, PTO and time tracking, and an employee self-service portal. Applicant tracking is available as an add-on.

While Effortless isn’t one of the more robust systems on this list, they are one of the more affordable—priced at a flat rate per month instead of charging for the number of employees. That gives you the flexibility to grow your team without upgrading pricing tiers every time you add a few more employees.

Another nice feature is that Effortless comes out-of-the-box with over 100 HR form templates, so you won’t have to create common workflows and documents from scratch.

What is HR software?

Human resources software helps businesses of all sizes manage various aspects of HR processes. From employee onboarding to payroll, benefits, training, and more, HR software makes everything easier for your HR staff and employees alike by giving you the tools you need.

Without HR software, organizations face a bottleneck in the HR department. The only way for employees to access information is by calling HR, sending an email, or physically visiting the HR office.

These scenarios aren’t realistic for the modern workforce, especially with so many people working remotely or in the field.

How to Find the Best HR Software For Your Business

With so many HR solutions on the market today, finding the best option for your business can feel like a daunting task.

Fortunately, we will explain what factors and elements you need to take into consideration as you’re evaluating prospective solutions. This is the methodology that we used to pick the winners on our list.

Business Size

The first way to narrow your options down is by the number of employees you have. Startups and small businesses with 20 employees won’t have the same needs as a company with 200 or 2,000 employees.

Startups and small businesses should look to solutions like Zenefits or Gusto. Namely and SAP SuccessFactors are better for medium businesses.

It’s important to make sure that your HR software can scale with you as your company grows.

HR Needs

What exactly do you need HR software for?

My needs might not be the same as yours. Not all software provides every single HR capability. So you need to identify the main reason why you’re seeking HR software.

For example, you won’t find payroll on the feature list for the majority of software on our list. In most cases, you’ll have to pay extra to get payroll on the few platforms that do offer it.

Other solutions address specific needs, like human capital management (HCM), applicant tracking systems (ATS), and human resources management system (HRMS). Some providers address ultra-specific needs, such as HR software for managing international employees.

Additional Features

In addition to your core needs, you should look to see what other additional features are offered by the software you’re evaluating.

Mobile apps and employee self-service tools are nice to have. Time tracking, time-off management, onboarding tools, and dozens of other features won’t necessarily fall into the “core HR” feature list. But they’re still great to have if you’re trying to optimize your HR department.

Just don’t let a long list of additional features distract from your primary HR needs.

Price

Most HR software is billed on a monthly basis per employee. These rates can start as low as $5 per employee per month.

Some platforms charge a base rate for your core plan, and then charge a per employee rate on top of it. Other software has different per employee rates based on the features available in the plan you select.

Not every HR solution has transparent pricing available online. In some cases, you’ll have to contact the sales team to request a quote and demo. Always test out the software with a free trial when it’s available before you commit to anything long-term.

How can HR Support the Business?

HR is different from one organisation to the other; each one is unique and individual. The tasks that HR might cover will include any and all of the following:

• Recruitment and Hiring
• Onboarding and Induction
• Performance Management
• Training and Development
• Employee Motivation and Engagement
• Compensation, Rewards and Benefits
• Communications
• Organisational Design and more.
• In some organisations Payroll and Pensions is part of Human Resources too.

The way in which these tasks will be carried out within the organization depends on the uniqueness and brand of the organization itself. Its size and numbers, its culture, its location, and the budget available.

Human Resources covers a plethora of skills and knowledge to meet the ‘people related’ demands of a workforce. And it has undergone a revolution in recent years. The HR professional probably has a degree, or a professional qualification from its own Chartered Institute. 

They will have a good understanding of business management and practice and will be an expert in the laws that govern the employment of people. They will also know how to work with senior business leaders in the development of strategy and planning.

In summary, HR is concerned with:

• Getting the right people in the right place at the right time
• Keeping staff. This is through motivators such as salary and benefits, job satisfaction, development and progression
• Getting the most from staff. Done by ensuring they have the best possible level of knowledge and skills to perform their maximum

Within these three core functions, there are a host of specialisms and roles.  There are generalists, with a broad range of knowledge who can work within a business of any size, and specialists. Their areas vary from Compensation and Benefits, Recruitment and Pensions through to Organisational Development, Talent Management and Business Information Analysis.

What Benefits does HR Software Provide?

Whether you’re looking to invest in your first specialist HR system or upgrade your existing software to something more sophisticated, here are five top benefits of using HR software.

1. It’ll improve the efficiency of your HR team

One of the most immediate benefits of using specialist HR software – once you’ve completed the implementation and launch phase – is an improvement in the efficiency of your HR team. Repetitive, admin-intensive tasks such as chasing managers to complete probation or annual reviews can be automated, and others – such as approving holiday or certifying absence – can be delegated to managers and employees through self-service functionality.

2. It’ll improve your employee experience

Rapid advancements in consumer technology means workers expect even more from the digital devices and services their employers provide. If you’re used to using your mobile for everything from booking an Uber to order a new outfit, you’d expect to be able to do the same for booking holiday or viewing your benefits – and certainly not have to send a form to HR, for example.

User-friendly, well-designed HR software can help to transform your employees’ perceptions of your HR department, from regarding it as an outdated or ‘behind-the-times’ function to seeing it as one that is forward-thinking, and a strategically relevant enabler of good work.

Choosing to integrate your HR software with other applications – such as learning management systems, expense management systems, and time and attendance systems – and enabling single-sign-on, will help take your users’ experience to the next level.

3. It’ll save you money – or enable you to redeploy staff on other projects

Implementing HR software will of course involve one-off setup fees and, if using a cloud-based system, annual subscription costs. But, in the medium and long-term, your organization should find that the efficiencies the software brings and time it saves will either allow you to reduce staffing costs or allow you to redeploy your HR team on more strategic projects. Better data accuracy should mean you experience fewer costly errors, too.

4. It’ll help you make better decisions

One of the most common frustrations associated with keeping people data in disparate sources, or in unsophisticated HR systems, is an inability to frequently, automatically and accurately report on key people management metrics.

Good HR software should make it easy for you to find, analyze and report on the people data that matters most to each function in your organization – enabling you, managers, and senior stakeholders to make smarter, more timely decisions. Being able to provide evidence quickly and easy for your ideas and initiatives will also help to cement the credibility of HR with the wider organization.

5. It’ll improve your regulatory compliance

Because you’ll store all your people data and related information in one place and be able to send automated reminders when action needs to be taken, your compliance with regulatory requirements will be much improved.

Specific compliance areas where HR solutions can play a significant role include GDPR compliance (especially around data security and data-retention periods), right-to-work checks, and health and safety training compliance. You’ll also find that HR software will help you report on gender pay gaps, too.

How does HR Improve Business Performance?

Human resources professionals have many roles within an organization. They are responsible for formulating strategies that focus on recruiting and retaining top employees as well as overseeing projects that promote company-wide productivity. Most human resources departments control the overall operations of a business, making the department a key component of a company’s success in achieving its objectives.

Training and Development

Human resources specialists often are charged with creating training programs to strengthen the quality of work within an organization. The Bureau of Labor Statistics indicates that “enhancing employee skills can increase individual and organizational performance and help to achieve business results.”

Read Also: Business Performance Management Software

The role of human resources in training and development includes assessing training needs, creating training manuals, facilitating instruction, and ensuring training objectives have been met.

Employee Acquisition

An organization’s human resources department is responsible for many aspects of hiring and developing employees. According to the Society for Human Resources Management, employee acquisition and retention strategies are vital to the success of a company. Human resources managers implement these strategies to reduce turnover, improve employee skills, and increase overall company productivity.

Project Management

Deliberate planning methods often are overlooked when conducting a company project. According to the CUPA Human Resources Journal, “project management can be a critical tool for the HR organization in meeting and institution’s strategic goals.” Human resources involvement in project management helps companies remain organized by outlining project goals, identifying costs and benefits and assessing the risks of the project.

Compliance Management

Human resources managers handle the labor relations and dispute resolution operations of a company. Their role is to ensure that the organization is familiar with government regulations in regard to wage, labor and equal opportunity requirements. Strict compliance management can help a company avoid lawsuits and liabilities when disputes arise between employers and their employees.

Cost and Quality Control

Human resources specialists help businesses conserve costs when developing compensation packages, benefit materials and employee assistance programs. Further, technological advances increase the need for highly developed training programs that HR representatives are most qualified to implement. Human resources managers also are responsible for quality control, which is directly related to the successful accomplishment of company goals.

Finally

What’s the best HR software on the market today? Generally speaking, there is no “best for everyone” solution.

If your priority is small business payroll, choose Gusto. For a complete HRMS, try BambooHR or Zenefits.  Mid-sized organizations should learn towards solutions like Namely. People HR is our top recommendation for applicant tracking and recruitment.

Check out SAP SuccessFactors for an HCM product suite. For mid-sized organizations with international employees, we recommend Sage Business Cloud People.

Regardless of your business size, industry, or HR needs, you can find what you’re looking for using this article.