• >
  • Business>
  • Our Best HR Software for Small Businesses

Our best HR software for small businesses

HR software can help manage processes and employee information for your small business

We’ll help you determine what HR software is, what features and tools it can offer, plus help you find the perfect fit for your business needs.
Last updated
November 29th, 2023

What is HR software? 

Keeping on top of your HR duties can be time-consuming and difficult at the best of times. HR software helps businesses improve their human resources offering, with the aim of improving employee management and boosting satisfaction and productivity in the workplace. HR packages offer a wide range of features, including:

  • Centralised storage of all employee data

  • Recruitment and onboarding

  • Day-to-day management, such as time, attendance and payroll duties

  • Staff development – training and nurturing

  • Benefits administration

  • Reporting, analytics and compliance

HR software has played a major role in innovating new HR systems and processes thanks to its agile nature, which sees new features rolling out quickly in response to developments in the workplace. This was particularly true during the Covid-19 pandemic when businesses were shuttered, and employees were forced to work from home or go on furlough.

Do I need HR software for my business? 

Whether you have a fully fledged human resources department in place or you’re a small business looking at ways to better manage your workforce, HR management system software may be a good choice for your company. Benefits include:

  • Ensuring management processes remain compliant

  • Reducing administrative costs

  • Boosting employee satisfaction

  • Improving communication and therefore productivity across the company

  • Gaining a better understanding of your workforce

  • Attracting, hiring and retaining new talent

HR software can streamline a range of tasks to save you time and maximise resources"

What features should you look for?

Consider the following when evaluating your options:

Recruitment

In-house acquisition teams should look for recruitment tools that help to source, track, screen and interview candidates.

Onboarding

Provide new employees with easy access to key information and resources to help give them the best possible start to their new career.

Employee Engagement

Monitor your employees’ levels of satisfaction and find new ways to motivate them through feedback and survey tools

Self-service

Some services provide portals or apps for employees to manage selected parts of their own work affairs, including managing expenses, viewing payslips and booking annual leave.

Benefits Administration

If you offer your employees perks like private healthcare or pension contributions, look for tools that make these benefits easy to set up, administer and track.

Absence management

These tools help your HR team track and administer both planned (e.g. annual leave) and unplanned (e.g. sickness or injury) staff absences, along with managing their return to work.

Communication

Look for tools that make it easier to deliver news and information to employees, plus provide them with a safe environment to communicate concerns or constructive feedback.

Performance management

Tools that help evaluate employee performance should cover everything from performance appraisals to setting goals and rewarding good work.

Reporting

Helps keep an eye on the company’s performance, alerting it to potential areas of concern through key metrics and trends. Plays a key role in helping keep your business compliant.

How much does HR software cost?

This depends on several factors, the features offered in the package and the type of subscription.

Typically this is priced annually or monthly, and may be calculated one of two ways:

A good rule of thumb is that pricing costs around £3-10 per month per user for a typical HR software system, while Breathe HR’s entry level Core package charges £18 per month for “micro” businesses of 1-10 people, scaling all the way to £500/month for businesses employing up to 200 people.

Examine carefully what you get for your money – many features may be restricted to higher tiers or optional add-ons. These are often charged separately at a flat additional rate, such as £10-20 per module from Breathe HR. Sage HR’s Recruitment package for in-house acquisition teams costs a further £150 per month.

Many HR providers don’t publish their prices online; instead, contact them directly with details of your business type and size for a personal quotation. Also be aware than prices typically exclude VAT.

Examine carefully what you get for your money – many features may be restricted to higher tiers or optional add-ons"

Pros and cons

Pros

Centralise employee data in one place to gain a holistic view of your entire workforce
Can streamline and automate many repetitive tasks to help maximise resources
Improve communication between employees, management and departments – even if spread across multiple sites
Align processes and objectives to provide a consistent, compliant approach
Improve employee satisfaction to boost engagement and productivity
Flexible pricing models allowing you to pick and choose what components your business needs

Cons

Can require significant initial investment in time, money and training
Off-the-shelf solutions can prove difficult to tailor to your business’s specific needs
May need to invest in multiple products from different providers to get the full range of HR features.

Choosing the best HR software for your small business

Determine your priorities

What are you looking for from your HR system? Is it better visibility of your workforce, or are you looking to improve your employees’ experience? Make a note of what you need.

Identify the features you need

Armed with this insight, identify what features would help you achieve your HR goals. Check your current software to see whether it can meet these needs, or whether you’ll need to upgrade or switch.

Determine your budget

Decide how much you wish to spend per month or year on HR software – then divide it into the number of employees within your organisation so your figures align with most pricing models.

Conduct research

Use the links on this page or perform a web search for ‘hr software uk’ to track down a list of potential providers. Visit each site to compare features, packages and prices against your budget and wish list.

Evaluate shortlist

Once you’ve narrowed down the field to a selection of suitable providers that can meet your needs, contact them for more details – many offer free consultations and trials so you can verify the product meets your needs.

Choosing the best HR software for your small business

Determine your priorities

What are you looking for from your HR system? Is it better visibility of your workforce, or are you looking to improve your employees’ experience? Make a note of what you need.

Identify the features you need

Armed with this insight, identify what features would help you achieve your HR goals. Check your current software to see whether it can meet these needs, or whether you’ll need to upgrade or switch.

Determine your budget

Decide how much you wish to spend per month or year on HR software – then divide it into the number of employees within your organisation so your figures align with most pricing models.

Conduct research

Use the links on this page or perform a web search for ‘hr software uk’ to track down a list of potential providers. Visit each site to compare features, packages and prices against your budget and wish list.

Evaluate shortlist

Once you’ve narrowed down the field to a selection of suitable providers that can meet your needs, contact them for more details – many offer free consultations and trials so you can verify the product meets your needs.

The workplace is ever-changing, as demonstrated by the enforced switch to home working during the Covid-19 pandemic. HR teams have also had to adapt to cultural shifts like a switch to hybrid working or a focus on ensuring companies are more diverse, inclusive and equal.

And the challenges keep coming, whether it’s from an increased use of AI in the workplace or a shift towards the “employee experience” (EX) as part of improving workers’ wellbeing.

The good news is that many HR software companies have long mastered the art of agile working practices, ensuring that they can quickly translate developments in the workplace to new and improved services, so your company is ready to face change as it happens.

HR software can help keep your business compliant in the management of human resources, plus its agile nature means it can roll out new features quickly in the event of unforeseen developments. Just check that you're happy with the costs of the software and its ability to fit with your business needs first.

FAQs

Can HR software be customised for specific needs?

Yes, most HR software is designed to be customised for specific needs, but not all and not always off the shelf. It varies from platform to platform, so make sure you ask potential providers the question when evaluating different HR software platforms for your company.

How do I choose the right HR software for a small business

When it comes to choosing the right HR software for a small business, make sure you know exactly what you need, what your budget is and what questions to ask potential providers. These might include what core features it offers, what optional add-ons are available, how customisable the software or platform is, and whether it’s easy to scale up and down according to your business’s changing needs.

What is the cost of HR software?

The cost of HR software varies depending on the type of product you’re looking at (such as a specific type such as recruitment software or a more general-purpose HR platform), the provider and its pricing model. Many providers charge a monthly or annual subscription based on the number of employees you have while others offer different tiers based on your business size and need.

About the author

Nick Peers
Nick Peers has been a professional writer for 30 years and has been published extensively both online and in print in the UK, US, Australia and Europe. He’s been a self-employed sole trader since 2003 and has written for several business-focused organisations, including Vodafone, Dell, Experian and Microsoft.

Customer Reviews

Rated 4.2 out of 5
by 1,060 people