As a small business owner, you might be spending way too much time manually managing processes like payroll, PTO requests, and benefits administration. Or if you use multiple tools to help with these tasks, you’re not being as effective as you could be.
HR software isn’t just a nice extra for SMBs: With 94% of small business owners stating that technology helps them run their business more efficiently*, why wouldn’t you make the most of specialized platforms?
We’ve put together a list of the 10 best small business HR software tools, categorizing them into their ideal use cases, so you can choose a tool that makes HR easier and lets you focus on what’s important — your business.**
*U.S. Chamber of Commerce, 2022
Key features to look for in small business HR software
With all the comprehensive solutions out there, your HR and payroll software should cover a number of essential functions, allowing you to centralize all your work on one convenient platform. Keep an eye out for these features when choosing a tool for your small business:
-
- Employee onboarding and offboarding: You want a tool that improves the hiring and termination processes, which can be the most time-consuming phases of the employee lifecycle.
- Time tracking and attendance management: Accurately tracking employee hours and attendance manually can eat up a significant part of your week, so be sure the tool you choose has a powerful time clock, timesheets, and attendance management features.
- Performance tracking and management: By tracking employee performance, you have a better basis for evaluations and motivate your team to grow. HR software can help you do this more efficiently and objectively.
- Benefits administration: Your people are your biggest asset, so making them feel appreciated is essential for helping them stick around. The ideal solution helps you distribute employee benefits while maintaining compliance.
- Document management: Instead of storing them in disorganized folders somewhere on your computer, find an HR tool that helps you store and easily access all your essential HR-related documents.
- Payroll: As it’s such an important part of your HR operations, you need a tool with strong payroll capabilities. It should let your employees track their time and allow you to pay them, all in one place.
- Compliance: On top of everything else you need to keep track of, proper recordkeeping is essential to keeping your business up and running. Be sure the solution you choose helps you stay compliant with federal, state, and local regulations.
Our top pick for small business HR software solutions in 2023 (+ the rest ranked)
Our pick for the best HR software solution for small businesses is Homebase. That’s because Homebase comes with a complete suite of features that are designed to fit the specific needs of small business owners.
Whether you’re just getting started and only have a handful of employees, or have been in the business for a while and work with a dedicated team, we have plan options that will help make HR less of a headache.
We offer:
- A free plan that allows for unlimited employees and comes with timesheets, time clocks, scheduling, and messaging features.
- Location-based pricing that makes Homebase a more sustainable option as you grow your team.
- Transparent pricing so you know exactly what you’ll be paying (and getting) when you sign up for a paid plan.
- A mobile app that makes Homebase easy for you and your employees to use wherever you are.
- Easy setup so you can start using the tool as soon as you like, without having to talk to a customer service representative or do a demo.
But if you’re looking for a solution that fits a more specific use case, there are a number of other great options on the market. Here’s how we’ve categorized them:
- Best all-in-one: Homebase
- Best for hiring and onboarding: BambooHR
- Best for payroll: Paylocity
- Best for employee benefits: Zenefits
- Best for talent management: Gusto
- Best for leave management: PurelyHR
- Best for employee engagement: Grove HR
- Best for remote teams: Rippling
- Best for deskless teams: Connecteam
- Best for global teams: Deel
Comparison chart: Top 10 small business HR software solutions in 2023
A breakdown of the 10 best small business HR software solutions
1. Best all-in-one solution: Homebase
Source: https://demo1.joinhomebase.com/schedule_builder#week/employee/2/23/2023
Caption: Homebase’s advanced scheduling tool makes it easy to see exactly who’s working (and who can’t work) each day.
Top features
If you want to keep all your HR processes under the same roof, turn to Homebase.
A big differentiating factor for Homebase is its HR and compliance feature. The tool helps you organize all your team information in one safe place, set custom PTO policies, and accurately track and report employee hours so you can ensure you’re following local, state, and federal guidelines.
Plus, you get access to a team of expert HR advisors who can help answer your questions and guide you through compliance. Some of Homebase’s other key features include:
Homebase also helps you promote employee happiness by giving your team early access to their wages, tracking performance metrics, and collecting feedback so you can make your business a better place to work.
Pros and cons
One of the big pros for Homebase is that it offers a robust free plan with time and attendance tracking, time clocks, scheduling, job posts, applicant tracking, and an employee app.
And as we mentioned, Homebase offers live HR guidance so you never have to feel lost or confused about compliance issues. We’ll even notify you when laws change at the state or federal level, so you can be sure you’re always following regulations.
However, Homebase doesn’t offer the robust performance management or learning and development tools that some other platforms do, which is important to keep in mind if those features are essential to you.
Pricing
Homebase offers a free plan that comes with unlimited employees. Paid plans include:
- The Essentials plan, which starts at $24.95 per location per month. It provides more features for team announcements and employee performance tracking.
- The Plus plan, which starts at $59.95 per location per month. It gives you more tools to track labor costs, budgeting, and employee PTO.
- The All-In-One plan, which starts at $99.95 per location per month. It has more features for new hire onboarding and employee document storage, as well as more robust HR and compliance options, including access to in-person HR experts.
You can also add payroll to any plan for $39 per month and $6 per person per month.
2. Best for hiring and onboarding: BambooHR
Source: https://www.bamboohr.com/hr-software/employee-self-onboarding/
Caption: BambooHR makes it easy for new team members to introduce themselves and feel integrated with their coworkers.
Top features
BambooHR comes with numerous useful features, like time tracking, PTO management, benefits administration, and payroll. But where they really shine is their hiring, onboarding, and offboarding features.
The tool has a built-in applicant tracking system (ATS), a mobile hiring app, and comprehensive new-hire onboarding features like customizable templates and tasks. You also get digital signature capabilities and offboarding tools that make things easier when team members leave you.
Pros and cons
Customers state that BambooHR is incredibly user-friendly, allowing you to get up and running in a short period of time. The hiring and onboarding features also make it easy for business owners who have to hire a number of employees in a short period of time.
But some users say that some features, like the ATS and performance management tool, are still pretty basic.1 And other users complain about the limitations of the tool’s reporting feature.2
Pricing
You can’t find any transparent pricing on the BambooHR website, but review sites say the Essentials package starts at around $6 per employee, and the Advantage plan starts at around $8 per employee. The platform also offers add-ons for features like payroll, time tracking, and performance management.
3. Best for payroll: Paylocity
Source: https://www.paylocity.com/our-products/payroll/
Caption: Paylocity makes expense management easier, lets you offer employees early access to earned wages, and makes it easy to pay team members in other countries.
Top features
Paylocity really stands out for its advanced payroll feature. The HR and payroll software helps with expense management, offers tax support, and facilitates global payroll. Plus, the platform offers expert support for garnishment management so you can ensure you’re staying compliant.
Some of Paylocity’s other noteworthy features include time and attendance, employee scheduling, compliance, recruiting, onboarding, and benefits administration.
Pros and cons
Paylocity offers a wide range of features, meaning it allows you to centralize all your HR processes. And it’s an especially helpful tool when it comes to running payroll and filing taxes.
But some users state that customer support isn’t as helpful as they’d like, and they don’t always get an answer to their questions in a timely manner.3 That means implementation and adoption of the tool can be a challenge.
Pricing
Paylocity’s pricing isn’t readily available, but review sites say plans can range between $18 and $15 per employee per month, depending on the features you choose for your plan.
4. Best for employee benefits: Zenefits
Source:https://www.zenefits.com/benefits/
Caption: Zenefits makes it easy for employees to understand their benefits, and you get insights into how your benefits strategy is working.
Top features
Employee benefits is where Zenefits shines (which doesn’t come as a surprise given the tool’s name). The platform lets you carefully select your benefits plan and brokers, educate and enroll your employees in plans, and analyze how your benefits strategy is performing.
Zenefits also offers other HR features like onboarding, performance management, time and scheduling, recruiting, people analytics, and payroll.
Pros and cons
Zenefits is easy to use, both for employees and employers, thanks to its clean and intuitive interface. Another benefit is that it really is an all-in-one platform, which makes it easy for you to centralize your HR processes.
But be aware that some Zenefits users have had issues with customer support4, and data transfer can be cumbersome if you’re moving over from another HR system.5
Pricing
Zenefits has three base plans: Essentials ($10 per month per employee), Growth ($20 PMPE), and Zen ($27 PMPE). You can also choose to add on other features, which include:
- Payroll ($6 PMPE)
- Advisory services ($10 PMPE)
- Benefits admin using your own broker ($5 PMPE)
- Recruiting (starting at $62/month)
5. Best for talent management: Gusto
Source: https://gusto.com/product/hr/talent-management
Caption: Gusto facilitates employee reviews, performance tracking, and team development.
Top features
You need to invest in your employees if you want them to stick around, and the performance management features that Gusto offers can help you promote team growth and retain staff. These tools make it easy to give and receive feedback, set up performance reviews, track progress, and invest in your employees’ professional development.
Gusto’s other features include payroll, employee benefits, time and attendance, hiring and onboarding, insights and reporting, and access to HR experts.
Pros and cons
Customers like how easy the platform is to navigate. And because it has a talent management feature, it can be a good option for growing businesses that are concerned about employee retention and development.
But many users complain about the tool’s customer service.6 And the Gusto mobile app offers limited capabilities for employees, which can cause issues for people who manage their team remotely.
Pricing
Gusto offers three paid plan options:
- The Simple plan starts at $40 per month plus $6 per person per month
- The Plus plan starts at $60 per month plus $9 per person per month
- Contact the sales team to get a custom quote on the Premium plan
For contractor-only businesses, you pay nothing for six months, then pay $35 per month plus $6 per person per month.
6. Best for leave management: PurelyHR
Source: https://www.purelyhr.com/product/timeoff/
Caption: PurelyHR’s time off feature makes it easy to track time off, customize time off policies, and approve PTO requests.
Top features
PurelyHR started as a leave management tool over a decade ago, and that’s still the area where it excels. The platform makes it easy for employees to submit (and you to approve) time off requests, and the tool’s shared leave calendar syncs with Outlook, Apple, and Google calendars.
You can also create custom time off policies, automate policy changes and balance renewals, and easily generate reports. Some of PurelyHR’s other features include time clocks and time sheets, performance management, and a centralized hub for all your employee information.
Pros and cons
If tracking time off causes real issues for you, PurelyHR can be an excellent tool to ease your workload. Customers love how easy it is to use and that you can clearly see whether teammates are working or out on any given day.
But the tool lacks key features, like employee scheduling and payroll, that many small businesses require. Another factor to consider is that it doesn’t have a mobile app.
Pricing
PurelyHR’s pricing starts at $5 per month and increases depending on how many employees you have and which features you choose to adopt. For example, for a team of 10 that signs up for all the tool’s features, the price would be $10.50 per employee per month.
7. Best for employee engagement: Grove HR
Source: https://www.grovehr.com/products/performance-enablement
Caption: Grove HR’s performance enablement tool can help you invest in your employees’ progress and growth.
Top features
Grove HR helps you engage your employees and make them feel connected and appreciated. Its employee engagement tool helps team members communicate through a company social feed and interest groups, and the performance enablement feature makes it easy to organize and track performance reviews.
Grove HR also comes with recruitment, onboarding, employee management, time and attendance tracking, and payroll features.
Pros and cons
Grove HR users like how well it fosters team interaction and makes it easy for staff to clock in and out. Plus, the tool is easy to navigate, and opinions regarding customer service are generally positive.
However, some customers state that the onboarding feature could use some improvement7, and the tool doesn’t help with scheduling.
Pricing
The Grove Essentials plan is free for teams with up to 50 active employees. If you have more team members, the Essentials plan starts at $3 per month per employee.
Grove HR also offers a Perform plan that starts at $4 PMPE and an Engage plan that starts at $6 PMPE.
8. Best for remote teams: Rippling
Source: https://www.rippling.com/benefits
Caption: Rippling makes it easy for new hires to set up their benefits 100% online, and the platform supports any broker you choose.
Top features
Rippling can make it easier for you to manage a fully remote team, with features like 100% online new hire benefits enrollment, global workforce management, country-specific policies, and a role-based permission system.
You can also enjoy features like workflow automation, talent management, workforce analytics, and payroll.
Pros and cons
Rippling helps you order and ship a work computer to your remote employees, meaning they can get onboarded and up to speed in no time. The platform is also good for managing employee expenses and corporate cards remotely.
Just be aware that implementation can be quite complex8, so if you’re looking for a tool that you can sign up for today and start using tomorrow, Rippling may not be the best choice.
Pricing
The monthly cost for Rippling starts at $8 per user, but you’ll have to contact the sales team for a custom quote depending on the size of your business and the features you need.
9. Best for deskless teams: Connecteam
Source: https://connecteam.com/employee-time-clock-app/
Caption: Connecteam helps your employees track their time while they’re on the go and gives you full visibility of them wherever you are.
Top features
Connecteam is a great tool for teams that aren’t confined to a desk or office. The platform’s features let staff clock in and out while they’re on the go, and you get visibility over where your employees are when they’re tracking their time.
It gives you a real-time overview of employee schedules and makes it easy to notify staff of any changes or updates. Other key features include a staff directory, knowledge base, surveys, instant messaging, employee recognition, training, and onboarding.
Pros and cons
Connecteam makes it easy to manage deskless teams, especially when your staff is spread out over a large geographic area. The time tracking feature is easy to use, and both you and your employees have access to a convenient mobile app.
However, if you want access to all the tool’s features, it can get quite expensive.9 And it lacks a time off feature, which a number of customers state is a limitation of the platform.10
Pricing
Connecteam organizes its pricing options into three main “hubs” — Operations, Communications, and HR and Skills.
Each of these “hubs” has three plan options:
- Basic plan for $35 per month
- Advanced plan for $59 per month
- Expert plan for $119 per month
Connecteam also offers a Small Business Plan, which is free for teams with up to ten active employees for each of these categories.
And be aware that prices go up after you reach 30 users.
10. Best for global teams: Deel
Source: https://www.deel.com/global-payroll
Caption: Deel lets you pay employees in over 90 countries while maintaining compliance and making all the necessary tax and benefits deductions.
Top features
Deel is designed with global teams in mind, making it simple to hire, pay, and manage your employees wherever they are. Its payroll tool is equipped to pay employees in over 90 countries, and you can easily send and manage team equipment.
The platform even serves as an employer of record (EOR) to ensure you stay compliant when hiring staff globally. Deel also comes with other helpful features like background checks, onboarding, employee records, and global expense reports.
Pros and cons
If you’ve got employees around the world, Deel is one of the most comprehensive solutions you can find. It even offers visa support for over a dozen countries, making it easy to hire global talent and bring them to you.
But Deel doesn’t have a mobile app, and it lacks employee scheduling and team communication capabilities, so it may not be the right choice if these are priorities for you. And you may not need all its functionalities if you don’t plan on hiring international employees.
Pricing
Deel plans include:
- A free plan, which lets you manage employees in 90 countries and comes with payroll, onboarding and offboarding, benefits, and time off management features.
- A Contractors plan that starts at $49 per month, which gives you more advanced features for hiring and managing international freelancers.
- An EOR Employees plan that starts at $599 per month, where Deel acts as EOR for you and handles localized agreements, taxes, and benefits.
How to buy small business HR software
Remember that when buying HR software for your small business, you can’t just turn to any old tool. Software that’s geared towards larger companies and enterprises won’t have the features your business needs, and you may not get the attention you need to make the most of the platform.
Here’s what you need to do to pick the best software for your business:
- Do your research. Look into a tool’s features, and take note of whether the tool will let you consolidate all your HR processes.
- Consider the costs. Compare pricing options and costs to ensure it’s a sustainable, long-term solution.
- Read user reviews. You can find the opinions of real users on websites like G2 and Capterra. That way, you can get people’s honest thoughts about the tool.
- Look into ease of use. You want a tool that minimizes hassle, and doesn’t cause you headaches. So read user reviews about how easy each product is to use.
- Think about customer support. G2 and Capterra reviews are a good place to turn to for honest user opinions about how much onboarding and ongoing support you’ll get.
Common pitfalls to avoid when using small business HR software
Just because you’ve purchased the right tool doesn’t mean you can fully let go of the reins. The best HR software will help automate and simplify your job, but you still have to take the time to set it up and periodically review all your employee information.
To make your software work for you, avoid these common mistakes that small businesses can make when using HR software:
- Not properly setting up employee information. In order to avoid errors and make sure your HR recordkeeping is accurate, take the time to set up all your employee information and double check that it’s all correct.
- Not regularly reviewing and updating employee information. It’s important to make a habit of staying up-to-date on employee information. Failing to do so could mean compliance issues and potential fines.
- Not properly training employees on the software. You want your employees to make the most of the software you’re paying for to make your and their jobs easier, so be sure to train your employees on the tool and ensure their efficient and accurate use of it.
- Not regularly backing up data. No software is foolproof, and you want to manually back up your information periodically to protect yourself against data loss in case you experience technical problems or an unforeseen disaster.
- Not making the most of all the features. Just because you purchase a tool primarily for payroll doesn’t mean you should ignore its other features—take advantage of all the tools available to you, and experiment to see how they can help ease your workload.
Find the HR tool that will work for your small business
With all the small business HR software platforms out there, we’re sure you’ll be able to find one that’s a perfect fit for your business. Remember to prioritize the features that are most important to you, read reviews from real users, and take pricing into consideration.
When you’re setting up your software, take the time to accurately input all your data and properly onboard your employees so they make the most of the tool. And finally, enjoy the time you get back in your week thanks to the ways your tool automates and centralizes your HR processes.
References
- G2 review for BambooHR
- G2 review for BambooHR
- G2 review for Paylocity
- G2 review for Zenefits
- G2 review for Zenefits
- G2 review for Gusto
- G2 review for Grove HR
- G2 review for Rippling
- Capterra review for Connecteam
- Capterra review for Connecteam
**The information above is based on our research on staff management software. All user feedback referenced in the text has been sourced from independent software review platforms, such as G2 and Capterra, in February 2023.
