The HR software market is growing fast. Vendors are turning out more solutions, and businesses are buying them. According to Deloitte’s Bersin division, 57 percent of companies plan to make a major HR software purchase in the next 18 months. But making a major software purchase is usually predicated on having excess funds.
Small businesses still need to centralize workflows and be efficient, especially when it comes to HR
What if you can’t afford to make a major purchase? What if you’re a small business or startup, and buying the latest incarnation of Peoplesoft sounds about as realistic buying all of your employees Teslas for their next bonus?
Despite tighter budgets and limited IT resources, small businesses still need to centralize workflows and be efficient, especially when it comes to human resources. In this article, we’ll take a look at some of the best HR software for small business—modern, cloud-based systems with industry-leading functionality at an affordable price point.
Small Business Pain Points
In a 2012 study by the Society for Human Resource Management, executives listed the top challenges HR departments will face in the coming decade: retaining and rewarding the best employees, developing the next generation of corporate leaders, and creating a corporate culture that attracts the best employees.
Businesses of every size have been impacted by the need for better talent management, and the software industry itself has evolved to meet new strategic demands. From a broad perspective, things are looking up. But small businesses still face a number of more nuanced challenges:
No dedicated HR staff: Many small businesses either assign HR responsibilities to a cross-functional manager or to a single, in-house HR administrator. In either scenario, a single person handles payroll and benefits, time tracking, grievances/disciplinary action, hiring, promotions, and so forth.
Record-keeping and regulatory compliance: HR regulations are in a constant state of flux. Small businesses must balance record-keeping etiquette with healthcare reform, tax codes, and labor laws. Armed with only a file cabinet and the Sunday paper, this is sure to result in mistakes, processing delays, and, in worst cases, legal fines.
Employee attrition: According to a Jobvite survey of over 2,000 adults, 51 percent of employed workers are actively seeking or at least open to a new job. Without a strategy for investing in talent and building an attractive work culture, small businesses lose good employees to competitors that offer higher salaries and better benefits.
Performance gaps: On smaller teams, it becomes quickly apparent if certain employees aren’t pulling their weight. But without a formal performance management or training system in place, how do you orchestrate consistent improvement?
Key Software Features
HR software can help small businesses alleviate these pain points by automating administrative tasks, record-keeping, and compliance, and by giving HR coordinators tools to find and keep the best talent. In the current market, most solutions are moving toward mobile access, multi-channel talent management, internal collaboration models, self-service access, and end-to-end integration.
In order to get the highest return on your investment, it’s important to choose a solution that offers modern capabilities and intuitive access. Although solutions vary from vendor to vendor, most will offer some combination the following features:
- Employee self-service
- Applicant tracking and onboarding
- Compensation and succession planning
- Payroll and benefits administration
- Performance management
- Time/attendance tracking
- Applicant screenings
- Social recruiting
- Collaboration tools (newsfeeds, internal messaging)
- Mobile access (through native app or web interface)
Types of Systems
There are many different ways to package HR software. Most small business solutions are cloud-based, which saves upfront cost and eliminates the need for IT infrastructure, but there are also on-premise options for the cloud-wary.
Beyond deployment models, there are three primary classes of HR software structured around use intent:
- Core HR: Core HR solutions help businesses perform the administrative functions of managing a workforce—payroll, benefits administration, time and attendance tracking, workforce planning, and regulatory compliance. The self-service portal—which lets employees access their work-related data and enter updates and requests—is also an integral feature for most core systems.
- Strategic HR: The primary focus of strategic HR solutions is to hire, retain, and develop the best employees, for which reason it’s often referred to as “talent management.” These solutions mostly address recruitment, performance management, training and development, and succession planning. Some may even be best-of-breed applications designed to address a specific aspect of talent management, such as the hiring process.
- Integrated HR suites: These solutions provide end-to-end functionality across most or all areas of HR management including administrative aspects as well as recruitment, talent management, and e-learning (or learning management systems). Some product suites are sold in modules, which can be purchased discretely, according to need.
Five Top Solutions for Small Business
Average User Rating: 4/5
PeopleMatter offers a modular suite of workforce management solutions aimed at companies in the service-industry. Their product is divided into three primary modules: HIRE, LEARN, and SCHEDULE.
HIRE is essentially an applicant tracking system, but rises above competitors by offering cutting edge tools such as social media recruiting and custom career webpages.
The LEARN module lets businesses design custom courses and online training programs for employees.
Finally, the SCHEDULE module helps managers build employee schedules and optimize shifts based on cost thresholds and employee availability, with integrated communication tools for last minute shift swaps and absences.
All three modules are accessible as web-based applications or through native mobile apps with custom access controls. PeopleMatter has been used by over 45,000 businesses of varying sizes, including grocers, convenience stores, retail stores, hotels, and restaurants.
Average User Rating: 3.8/5
Namely is a web-based platform specializing in core HR and talent management for growing companies. Their product can be purchased in separate modules, or as an end-to-end suite. Features cover payroll and benefits administration, time off tracking, and performance reviews, with a 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.
Average User Rating: 3.5/5
Unlike PeopleMatter and Namely, Jazz is a best-of-breed HR solution, meaning it’s designed for specialized use—in this case, applicant tracking and interview management. Jazz helps companies post jobs, screen applications, and manage the interview process through a centralized, real-time platform. Managers can create 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. Jazz 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 Jazz to more than double our team—from 20 employees to over 50 since 2013.
Average User Rating: 4/5
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 number of users.
The core module, “People,” 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 features 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.
Average User Rating: 4.6/5
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.
If you think your budget or scale makes HR software impractical for your business, think again. Thanks to modern innovations like software-as-a-service (SaaS), the market is brimming with affordable solutions for businesses of every size. Even if all you need to do is track time off and digitize employee records, a centralized HR solution can help you do this more efficiently and accurately. With a little luck, your business will start to grow, and you’ll be glad when your HR infrastructure can grow with you.
Need help choosing the best solution for your business? Use our HR software product selection tool to get a personalized recommendation based on your industry, company size, and the features you value most.