The management of staff is a complicated issue for any company. When all the activity in an organisation is within your control, you feel you are the master of the outcome.
Introducing other people to the business is necessary if it is going to grow but with this comes issues of payroll, performance management, compliance, onboarding, communication, and more.
Dealing with this can at first appearing daunting and unmanageable.
HCM, or human capital management, has been trending towards digital HR for many years, seeing it as crucial to effective man-management.
HR management software for small businesses is not only the answer to issues of efficiency but can also make the whole process of employing people seem possible.
As with any software for small businesses, the functionality of the software needs to be proportionate to the size and needs of the company, and it also needs to be manageable within a tight budget.
You might even question whether HR management software is a realistic purchase at all when there are so many other priorities on the list.
The Pros and Cons of HR Management Software for Small Businesses
The benefits of HR Management software are enormous. It can help speed up shortlisting candidates by up to 50%, as the time from advertising to an appointment can be massively reduced.
And, when you save time, you save money.
The software can also help you better track performance. You can create customisable templates that are professional but also standardised across employees.
Finally, purchasing the right software can reduce working hours, as it prevents repeated data entry and problems through miscommunication.
The consequences of too much reliance on software in HR management is its impersonal nature.
IT cannot replace the human in human resource management. Therefore, it is not a solve all of the HR problems you might face. You will still need to meet with, talk to and manage personnel issues.
The platform may point you to the sort of things you should be concerned with and offer you a central repository for information, but it is not suddenly going to make you an excellent CEO or project manager.
If you want to ditch the multitude of spreadsheets and documents, the HR software will be brilliant. If you want something that can make your employees do their job effectively and efficiently, then you may be expecting too much of some code.
The Best HR Software for Small Businesses
Small businesses need software to solve four pain points felt by all minor employers, which include: no dedicated HR professional; keeping up with compliance; preventing employee attrition and managing visible performance gaps.
Compliance issues alone can tie you up, what with healthcare, tax codes, laws, pensions, etc. However, don’t underestimate the expertise needed in investing in talent to ensure you present an attractive workplace.
If these are the key issues you will face, then this is what functionality is needed in your software. You will need:
- employee self-service
- applicant tracking and onboarding
- benefits administration
- performance management
- time tracking
- collaboration tools
- reporting and analytics
Here are some of the best options on the market that cover these functions:
Namely is a SaaS, or online service software that stores information in the cloud. This is helpful for small businesses, where there might not be a developed IT infrastructure.
One of the significant compliance issues for small businesses is the protection of data of employees and a web-based platform specialising in HR will offer this as standard.
Namely covers payroll and benefits administration, time tracking, performance and centralised records of employees. There is also a social feed, which is helpful for communicating company news, as well as custom reports to help with individual and team analytics.
What sets Namely apart is it is designed to be simple. The point is to be user-friendly – and not to be too smart. Secondly, you receive a dedicated accounts manager – so if any issues with the software do arise, then you get help 24/ 7.
This platform is a stand-out HR management software because it is modular. This means you can build the application that is specific to your business’s needs.
The three primary modules include Hire, Learn and Schedule.
Hire is obviously an applicant tracking system – it’s unique because it includes social media recruiting, as well as custom career pages.
Learn helps you design online training programs and Schedule is focused on time tracking – along with a communication tool should employees want to swap shifts.
All modules are available via the internet, or you can download the native mobile apps.
As with most software aimed at small businesses, Bamboo HR is a cloud-based solution. It is a platform that excels at self-service – or giving your employees the access to manage their records and own time-tracking.
Therefore, the emphasis on Bamboo HR is user-friendliness – making sure all your professionals can engage successfully with the platform.
Bamboo HR has thought of everything and worked hard on providing levels of custom access. Therefore, as an administrator, you would have access to all data, as well as reports.
Employees, on the other hand, would only be able to access parts of the platform relevant to them.
The standout feature is its ability to integrate with many other applications, and there is a mobile app available for both iOS and Android.
Zenefits is a free HR solution. The primary business for this company is insurance brokerage – they just happen to offer an HR solution too.
However, if you want to go beyond the basic functionality of the free package, then you can invest in premium subscriptions that offer increasing levels of features.
The features include built-in payroll, time tracking, mobile apps, as well as HR management and benefits administration.
The reason you might choose EffortlessHR is that the pricing plan is based on the number of administration logins you need and not the number of employee logins.
This means that, for a long time, most small businesses will stay on the same flat rate. The platform comes with standardised templates for workflow and documentation and covers most personnel issues, including time tracking and an employee self-service portal.
You can even add on an applicant tracking function if required.
Jazz is not your all-around HR management tool but instead focuses on the appointment of employees.
If you are not yet ready for a full HR solution, then this might be a great starting point.
JazzHR assists companies looking to post jobs, screen applicants and manage interview processes. It stands out in this area because this is all that it does.
Therefore, it is better at accessing job sites, managing SEO in job titles and descriptions, as well as social media recruitment.
Cezanne is the choice software because it can scale up with your company.
It is cloud-based and offered as a monthly subscription. As you need more services, you can add modules to your subscription or increase the number of users. Each module is offered at a flat rate, so there is no complicated pricing structure.
If your business plan is demonstrating growth over a relatively short period, then it makes sense to choose a software that scales with you.
There would be nothing worse than having to make a second software purchase and go through the pain of installation, deployment and the migration of data.
The core module is called People and offers features for professional development, disciplinary and grievance, compliance, etc. There are further modules that provide analytics, payroll, etc.
Zoho offers a whole series of productivity apps for businesses of which Zoho people is one. It is a mostly administrative tool – offering essential appraisal features.
However, there is time and attendance tracking, leave management, customisation of forms, as well as employee self-service.
Access to the site is through a web-based system or via an app, available for iOS and Android. Zoho sells itself as an inexpensive HR solution but with the option to expand into other Zoho solutions that easily integrate.
This is another web-based system that aims to be easy-to-use. The claim is that you can be up and running in 15 minutes.
There are advanced job listing tools and features to track applications including social media screening.
The pricing plan is by the job advertised and not by the number of users – as this platform is aimed explicitly at recruitment.
Therefore, this software is best at the beginning of your business when you want to track the hiring pipeline.
Kin HR is probably one of the nicest looking and the easiest to use HR management software on the market.
The software manages onboarding, employee data and files, time off requests, employee reviews and gives you an excellent overview of the entire team.
Another benefit is that you don’t have to install anything, Kin HR works perfectly fine on your browser without a need for any additional installations.
One of the best features is the ability to monitor the calendar of the entire team in terms of who’s away during what time.
There are a lot of options on the market for small businesses, and a lot depends on where you are in the evolution of your company.
If all you need is something to help manage recruitment, then the limited functionality platforms are often cheaper.
However, if it might be more efficient to invest in an HR management software for small businesses that is aimed explicitly at scaling with you.
Spending a little more, in the beginning, may avoid hidden costs further down the line. And if you’re past that stage, check out our guide to the best CRM software for startups and the best project management software for startups.