Small Business Owner’s Guide to Choosing HR Software

For small businesses, human resources (aka HR) is a critical part of growing and retaining top talent. While HR departments often get a bad reputation as nothing more than a group of pencil pushers, there’s more to the story. If an HR department is run well, employees will feel connected and dedicated to the organization where they work. This connection and dedication, in turn, helps small businesses achieve their goals and objectives. HR software can help.

HR staff members handle many thankless tasks that require keen attention to detail and high emotional intelligence. From new hire training to payroll, performance reviews to exit interviews, HR isn’t an easy job to do.

Companies that prioritize candidate experience boost the caliber of their hires by a whopping 70%. Thankfully, several software tools on the market today make HR’s job easier and more efficient. However, choosing one can be daunting. Let’s take a look at some of the top HR software tools and how to ensure you select the perfect one for your team.

Small business HR software comparison

The best software for small HR teams automates and simplifies:

• Benefits
• Hiring
• Payroll
• Performance management

Some HR solutions software systems offer comprehensive options, while others offer features like payroll a la carte.

Companies that prioritize candidate experience boost the caliber of their hires by a whopping 70%.

To find the software that’s best for your organization, you need to understand your current needs as well as your future ones. For example:

• How many employees do you have?
• What kind of experience does your team have?
• What industry are you in, and how does that affect human resources management?
• How big is your customer base?
• What kind of budget are you working with?

These are all critical questions to ask yourself before searching for a new HR software.

Some of the most popular small business HR software companies include:

• Rippling
• Paychex
• Zenefits
• Gusto
• Bamboo HR, to name a few

HR software is a growing industry. The HR software market is expected to pass $10 billion by 2022; however, not every platform has the features your team needs. Here’s a look at some of the most sought-after features and which companies have them or don’t.

Rippling

At first glance, Rippling brings a lot to the table regarding software functionality for the price. Rippling offers a robust suite of features, including onboarding, payroll, training, and benefits management. Things begin to go downhill once you read the fine print, however. Rippling’s employee management feature must be added before users can access other functions. Moreover, each added feature costs extra, so things get expensive quickly.

Moreover, their mobile app has only basic functionality, requiring users to get different 3rd party integrations for performance management and employee engagement tools. With Rippling, you’re forced to work with multiple partners to stitch together an “all in one” system if you want to move beyond the basics.

Review: Per PC Mag, “Rippling offers comprehensive employee management features and customizability at a reasonable price. The depth of its tools and flexibility may overwhelm some smaller businesses.”

Paychex

Paychex is similar to Rippling because they offer attractive features for a reasonable price. However, their initial pricing structure is smoke and mirrors. For example, their payroll and tax features cost extra, which isn’t always evident upfront.

While they have added more applications over the years, they all require 3rd party integrations, which don’t provide a seamless customer journey. Multiple logins with barebones functionality for benefits, scheduling, time and attendance, goals, and performance management provides a lackluster experience. Finally, there are separate customer service contacts for Paychex’s HR and payroll products. Yikes!

Review: Per PC Mag, “The excellent Paychex Flex is more expensive than the other online payroll services we’ve reviewed, but it’s also more robust and scalable.”

Gusto

Gusto has a few popular features but lacks major ones like learning and performance management. What’s more, their benefits coverage is spotty. Ultimately, Gusto can be an administrative challenge. Gusto also has no mobile app, which seems unthinkable in 2022, but what do we know?

Gusto also lacks features that growing small businesses need, such as:

• Approval workflow
• Bulk actions
• Reporting capabilities
• User permissions

Gusto’s separate applications for different features and time-consuming administrative tools are all just a headache that no small business owner should deal with.

Review: Per PC Mag, “Gusto offers an exceptional user experience; however, there is no time tracking included with Gusto Simple. The payroll run page can be confusing, and contractors and time off require separate links or screens.”

Bamboo HR

Bamboo HR is the least comprehensive HR software on the list. However, Bamboo fails to offer payroll and employee benefits tools with its basic plan. Additionally, its 3rd-party partnership model offers multiple disconnected apps for HR basics creating headaches for employees and administrators alike. Enjoy being nickel and dimed? You’re in luck because payroll, time tracking, and performance management cost extra.

Review: Per PC Mag, “BambooHR brings a holistic and thorough approach to human resources (HR) management software; however, it’s pricier than competing products, lacking in benefits administration (BA) features compared to rival solutions, and lacks benefits data in the mobile app.”

Zenefits

While many of their competitors fail to offer one or two of the most sought-after HR software features, Zenefits has them all and is easy to use. Zenefits is optimized for mobile with a holistic system that performs:

• Benefits
• Compliance
• HR
• Payroll

Zenefits offers:

• Performance
• Scheduling
• Supplementary benefits
• Time and attendance

Zenefits offers flexibility and control with an all-in-one mobile app that gives employees and administrators the visibility they need to succeed. They offer various affordable plans with multiple options and the most robust compliance tools on the market.

Zenefits has the features you need with transparent pricing, an easy-to-use app, and room to grow as your organization grows.

Review: Per PC Mag, “It’s one of the best-designed HR software solutions for startups and small businesses. It brings an impressive set of functionalities, including intuitive administration features and the ability to add on services as needed. Zenefits complements its solution with access to help from actual human advisers.”

Next steps

While selecting the right HR software takes time, certain features you should pay special attention to may speed up your decision. Functions that are essential for every small business include quality:

• Mobile application and onboarding
• Time tracking
• Payroll
• Benefits
• Learning
• Performance management

Once you’ve completed your research, it’s time to start the demo process. When searching for the right HR software, ask vendors to give demos of their products.

Here are some suggestions:

• Ask for a demo of their software. This is like asking them if they can show you what their software does in action. For example: “Can you show me a demonstration of your product?”
• Ask for a trial of the software (if available). A trial allows you to use the product before committing to purchase it and decide whether or not it’s right for your needs and budget. For example: “What kind of trials do you offer?”

Remember that the process of converting to a new system may take some time, so be patient with yourself as you go through each step.

The bottom line

Choosing the right HR software for your company can be difficult with so many options available. But don’t worry – we’ve got you covered with our list of tips and tricks for finding the best fit for your needs!

At the end of the day, Zenefits has the features you need with transparent pricing, an easy-to-use app, and room to grow as your organization grows. Compare Zenefits with more competitors here.