At a glance: Our top pick for small business HR software
If you’re a technophile, and have a very specific idea of how you want to run your small business, consider using Connecteam. This flexible software lets you build an HR system that adapts to your business operations.
But our frontrunner is Homebase’s all-in-one HR software solution. Designed with small businesses in mind, Homebase has a team of experts who can assist you with all compliance and policy matters. It’s the perfect choice for shops, cafes, and restaurants which don’t have the budget for an HR department but still need to protect themselves against catastrophes like hefty fines and lawsuits.
What to look for in HR services for small businesses
When you’re new to HR software, you probably don’t know all the features you need. So we’ve created this checklist of all the essentials for small businesses.
Document storage and tracking
Paperwork is a necessary evil of doing business. It protects management and employees but requires lots of your time and energy. If you get something wrong, the stakes are high with penalties reaching into the tens of thousands. Plus, paperwork is just plain boring.
A great HR platform shoulders most of the burden by:
- Providing a safe and secure storage digital storage system
- Letting all relevant staff members access the documents to view and edit them
- Using granular permissions to prevent the wrong people from seeing sensitive files
- Storing documents for as long as mandated by state and federal law
- Keeping all documents in one central location to make your file management easier
- Tracking documents so you can tell whether they’ve been uploaded, completed, and verified
- Sending you notifications when documents are reaching their expiry date
Access to HR Professionals
Navigating the complex US labor laws can overwhelm even the most experienced managers. The rules vary according to state and frequently change and it’s your responsibility to keep up with them. You can miss one small detail and end up facing a large fine or an employee lawsuit.
Be mindful that HR platforms which rely on international helplines and chatbots won’t be able to get into the finer points of your business situation. You need access to certified professionals with experience dealing with small business HR that can confidently point you in the right direction. So look for an HR platform that includes this service.
Affordable pricing
The aim of small business HR software is to avoid the costs of outsourcing these tasks or hiring an HR manager. So whatever software you choose should also be cost-effective or it removes the point.
As small businesses can have anywhere between five and 100 employees, sometimes getting the right price can be tricky. Some HR platforms target businesses at the higher end of this scale. They might start their payment plans at prohibitive costs for small teams or offer better deals for using their services at greater volumes.
If you’re a small business but plan to grow, you’re better off finding software with flexible yet affordable plans. That way you can upgrade your software instead of overhauling it when you hire more employees or open a new location and your HR needs change.
Extensive hiring and onboarding tools
Hiring and onboarding often come with a high price tag. Recruitment agencies can charge as much as 25% of a candidate’s salary for the first year. Then training usually costs an average of US$1270 per employee too. Even if you handle the hiring process yourself, it’s a full-time job which means you’ll inevitably lose money in labor costs.
HR solutions can reduce hiring and onboarding costs by managing much of the process. Effective software should include features like:
- Customizable job description templates
- Automations that load your job posting to all the most popular sites
- Background checks
- Applicant trackers
- Screener questions to filter applicants
- Onboarding welcome packages
Automations, notifications, and reminders
With HR software, you want the program to handle as many of your administrative tasks as possible through automations. We’ve already mentioned job listings but you can also automate tasks like scheduling, time tracking, and payroll with the right software. This helps you to reduce errors and avoid problems like accidentally underpaying your staff.
Sometimes you’ll need to take over for tasks like verifying a document or confirming a new hire. A great HR software should notify you when it’s your turn. Then it should keep reminding you until you’ve completed the task.
The same applies to your employees. For example, if they haven’t clocked in or taken a break — which can cause compliance issues for your business — some HR software can notify and remind them.
An all-in-one solution
The best HR solutions give you access to all the tools you need either on the platform or via integrations. That way you can manage all your HR tasks in the same place and don’t have to keep switching between different programs.
Look for HR software that offers all of the above and:
- Payroll
- Scheduling
- Time tracking (including a time clock)
- Team communication
Top 5 small business HR software comparison chart
Before we look at the best small business HR in more detail, here’s an overview of what each product offers.
Platform |
Cost per month |
User rating* |
Tools and popular integrations |
Stand-out features |
Free plan |
4.5 |
– Hiring and onboarding – Time tracking with time clock – Scheduling – Payroll – Team chat app |
– Access to HR professionals – Custom made employee handbook service |
|
14 day free trial Free plan for up to 10 users Upgrades start from $29 plus $0.5 per employee (after the first 30 users) |
4.6 |
– Hiring and onboarding -Timetracking with time clock – Scheduling – Team chat app |
– Employee timeline | |
Free for the first three months Prices otherwise not readily available |
4.5 |
– Onboarding – Scheduling – Time tracking – Payroll – ZipRecruiter and Quickbooks integrations |
– Access to HR professionals – Employee handbook builder |
|
Free 30 day trial Prices start from $5.50 per employee Recruitment is $200 |
4.4 |
– Hiring and onboarding – Scheduling – Time tracking – Sage Payroll integration |
– Workflow builder – Recruitment pipeline |
|
|
Plans start at $40 plus $6 per employee |
4.3 |
– Hiring and onboarding – Scheduling – Time tracking and time clock – Payroll – Slack and MS chat integrations |
– Access to HR professionals – Email provisioning |
*Average rating across G2, Capterra, and GetApp
5 top-notch HR systems for small businesses
To understand what each software can offer you, it’s best to check how it distinguishes itself from the competition, its pros and cons, and what price plans are available. That’s why we’ve broken down our top five picks into these categories.
1. Homebase
Homebase is an all-in-one HR solution for small businesses. The Homebase team prides themselves on boosting small, local businesses like cafes, restaurants, and independent shops. To date, the software has a user base of 100,000 small businesses and that number is still growing.
Homebase pinpoints what small businesses need to offer them features like slick search and filter settings on the hiring dashboard
Source: https://joinhomebase.com/
Stand-out features
Homebase’s biggest stand-out feature is its HR assistance. This feature gives you access to a team of experienced HR professionals that help you stay compliant with employment laws like FMLA, workplace safety, and wage and hour laws. They can help you get proactive about potential issues and help your business survive tough situations like lawsuits and high penalties.
But Homebase’s custom handbook builder is a close second. You can contact Homebase, answer some questions, and they will create an employee handbook tailored to your business. And if you already have a handbook in place at your business, our experts will take a look at it for you and make sure you are providing the best company policies to your employees.
There are also email alerts on labor law changes for your state. That means you can make sure your business stays compliant and won’t risk accidentally violating a rule and incurring a fine. That’s crucial when one-time FLSA violations can cost you up to US$10,000.
Homebase ensures you stay compliant with nifty features like document tracking and custom welcome packets for new hires
Pros and cons
Homebase’s greatest advantage is that it’s a holistic solution for small businesses. It combines HR with other essential features that businesses need. So you can go through the whole process of hiring a new candidate, onboarding them, adding them to your schedule, and paying them in one place — with Homebase’s expert HR available to you at every stage.
As Homebase specializes in businesses with less than 100 employees, their HR pros are experts in small business matters. They have specific knowledge about local and state laws and experience in handling challenging situations like terminations and changing labor laws that adversely affect your business.
With paid plans starting at just $20 a month, Homebase is also one of the most affordable options. The cost is based on location only so you won’t have to pay extra for each new employee either.
One potential con is that some businesses may not need the whole HR suite. If that’s you, check for simpler options on the market.
Pricing
Homebase offers four simple plans.
- The Basic free plan for one location which includes hiring and timesheets
- Essentials for US$20 per month per location that has clock-in tracking, payroll integrations, and basic HR chat support
- Plus at $48 per month per location which adds on time-off and overtime tracking
- All-in-One which gives you full document management, onboarding management, and access to Homebase’s team of HR professionals
Even Homebase’s highest cost plan is more cost-effective than some competing software’s medium price plans.