The Best HR Software for Small Businesses

If you own or manage a small business, you know that employees often juggle multiple roles — from sales to operations to management. But when it comes to human resources, multitasking can pose several challenges.

Without a dedicated HR pro, you may be losing the best talent to larger companies with full-time recruiters. In addition, having an untrained employee handle HR tasks can take valuable time away from more productive activities. Plus, any mistakes in payroll or compliance could lead to potential lawsuits.

Hiring a human resources employee, however, may be outside of your budget. In fact, 70% of small businesses don’t have any HR staff, according to an ADP study. It just isn’t worth the cost for many companies. So what’s a better way to effectively manage your employees?

HR software is a more affordable solution for small businesses. Not only can it save time and energy by streamlining human resources, but it can also give your business a competitive advantage in finding and keeping the best talent.

To help you understand the benefits of this technology, we’ve researched the four common types of HR software and popular vendors. Here’s a list of the best HR software for small businesses.

Human Resource Management Systems

Human resource management systems (HRMS) streamline core and strategic HR functions into one solution. Due to its comprehensive features, HRMS software often has high prices and is generally marketed toward large and enterprise-level customers. However, small businesses with little HR experience and limited time will benefit from the ability to:

• Reduce administrative tasks and data entry with employee self-service portals
• Maintain accurate compliance and payroll records with a single, secure database
• Generate standard HR documents from templates

The following HRMS solutions are designed for small businesses:

BambooHR has extensive applicant tracking, talent management and recordkeeping functionality, but doesn’t feature a learning management module. With prices below $10 per employee, per month for the advanced-features package and awards for customer service, BambooHR is one of the best all-around HRMS options.

Zenefits gives employees access to a variety of HR processes through a single dashboard. It targets small businesses that want comprehensive functionality. Feature packages range between $6 and $12 per employee, per month. Customers can also purchase add-on modules for payroll, time and attendance, and performance management.

Sage HR (formerly CakeHR) is a cloud-based solution with core HR functionality. While it doesn’t have applicant tracking or learning management features, it does come with its own mobile app and integrates with Slack and Google Apps. Targeting small businesses with strict budgets, prices start at less than $5 per employee, per month.

Applicant Tracking Systems

Applicant tracking systems (ATS) streamline recruitment by collecting and parsing resumes, identifying top candidates and organizing interviews. If you want your small business to grow, you need to stay competitive to attract top talent even without dedicated recruiters.

With ATS software, you’ll have the ability to:

• Create a professional, branded recruitment portal
• Automate communication and feedback with applicants
• Track applicants through the interview process with a visual pipeline

Here are some popular ATS solutions for small businesses:

Fitzii offers a free unlimited applicant tracking system. Users can create a branded careers page, customize emails, collaborate with hiring teams, and post jobs to Glassdoor, Indeed and SimplyHired. Fitzii also integrates with BambooHR to transfer applicant info to employee records.

SmartRecruiters typically supports large and enterprise-level customers, but also has a free plan for small businesses called SmartStart. It features team collaboration, a career website and one-click job postings to over 200 resume boards. However, the free version only allows you to manage up to 10 active jobs.

Comeet offers visual workflows, task automation, team collaboration and interview optimization. Tasks are automatically assigned to specific individuals, which keeps recruitment agile and productive. Comeet integrates with most online job boards and scheduling systems.

Learning Management Systems

Learning management systems (LMS) help businesses create, track and manage their online education programs. For small businesses, LMS solutions offer the benefits of employee training without the costs of in-person classrooms and teachers.

LMS features allow you to:

• Onboard new employees efficiently
• Customize content to your specific location or business practices
• Track course completion and performance
• Generate reports and records for compliance training

Here are three LMS solutions suited for small businesses:

Moodle is an open-source learning management platform. The free version includes up to 50 users and 200MB of file uploads with no time limit. Other features include a mobile app, video conferencing, screen-sharing, gamification of quizzes and tests, and product upgrades.

Edmego LMS is a web-based platform designed to train small business employees using customized content or a built-in course catalog. It has document management functionality, integrates with other HR technology and can be implemented within three hours. Prospective customers start with a 30-day free trial.

EdTek Services offers cloud-hosted, online learning systems and support. Prospective customers can access an unlimited free trial, which includes building out a portion of a customized course. Customers also receive free upgrades, instructor training, course development support and a dedicated client service consultant to help run the program.

Talent Management Systems

Talent management systems help businesses attract, develop and retain key employees. Talent management solutions may include applicant tracking and learning management modules, but are most commonly purchased for their performance review and succession planning features.

In a small business, a single employee can have an enormous impact, so you’ll want to be sure everyone is pulling their weight. Talent management systems help you engage and retain top talent, and allow you to:

• Organize and audit performance reviews
• Develop careers with talent pool comparison and analytics tools
• Identify talent gaps and future needs with succession assessments

Small businesses should consider these three talent management solutions:

Engagedly is a cloud-based solution that provides continuous performance evaluation with real-time feedback and ongoing check-ins throughout the year. It includes social and employee recognition tools, such as badges and reward points, to help increase employee engagement, collaboration and value recognition.

Saba TalentSpace is an interactive talent management solution intended for small to medium-sized businesses. It empowers employees to create their own experience while keeping them aligned to the performance goals of the business. It connects learning and development directly to the employee assessment process.

Cornerstone OnDemand offers a Growth Edition for companies with less than 400 employees, which provides recruiting, performance management and learning functionalities. The Connect feature allows employees and managers to create profiles, connect with each other and collaborate on tasks.

Looking For More?

If you’re looking for more software options, check out our vendor comparison guides for HRMS, ATS, LMS and talent management.