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Top HR Software for Small Businesses 2021

By Kaiti Norton
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Human resources software supports the heart and soul of your company—your employees. These tools will make your HR tasks more efficient and improve your employee experience overall. There are many vendors vying for your business in this market, so it's important to consider the software solutions that are best suited to your needs. We've rounded up the best HR software for small businesses so you can find the best fit for your business.

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Top HR software comparison

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Vendor

BambooHR

 

BambooHR Logo

 

Namely

Namely logo

Zenefits

Zenefits Logo

Gusto

Gusto Logo

Deputy

Deputy Logo

Freshteam

Freshteam Logo

Zoho People

Zoho People Logo

Applicant tracking

Yes

Yes

No

No

No

Yes

No

Payroll

Yes

Yes

Yes

Yes

No

No

No

Benefits administration

Yes

Yes

Yes

Yes

No

No

No

Performance management

Yes

Yes

Yes

No

Yes

No

Yes

Shift scheduling

No

Yes

Yes

No

Yes

No

Yes

Learning management

No

No

No

No

No

No

Yes

Employee engagement

No

Yes

Yes

No

No

No

Yes

BambooHR: Best HR software for ease of use

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Screenshot of BambooHR dashboard.

Pros

One of the biggest accolades BambooHR receives from its existing users is how intuitive the interface is. It was built specifically for small and midsize businesses who are looking for their first dedicated HR software, and it has customizations and flexibility that exceed expectations. One user even commented that the BambooHR interface is "almost like Facebook for recruiting." It has automation capabilities and workflows that make it easy to manage your people data, onboard new hires, and grow your company culture among other HR functions.

Cons

Where BambooHR excels in ease of use, it sorely lacks in its range of features. Many features, like time tracking, performance management, and automated overtime calculations, are only available as add-ons to the main packages. Other features, like employee engagement, learning management, and shift scheduling aren't available at all. This means you'll likely need to adopt additional software to accomplish these goals or look for an alternative solution altogether.

Pricing

BambooHR is available in two different editions—Essentials and Advantage—but pricing is only available by requesting a free quote.

Namely: Best HR software for integrations

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Screenshot of Namely dashboard.

Pros

Many users love how well Namely integrates with a wide range of third-party systems. These include accounting systems, resource planning software, and CRM software. This means Namely acts as a single, centralized system of record for all of your internal data. Many other users have touted how easy it is to configure Namely, so it's perfect if you're looking for an out-of-the-box solution.

Cons

Some users have noted that Namely's customizations are a bit lackluster, especially when it comes to reporting. Although the capabilities exist, they aren't always reliable and can sometimes create frustrating road bumps. Additionally, Namely's technical support channels have gotten some criticism from customers.

Pricing

Namely is available in three different editions—HR Fundamentals, HR Complete, and Managed Services—but pricing is only available by requesting a free quote.

Zenefits: Best HR software for benefits administration

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Screenshot of Zenefits benefit administration dashboard.

Pros

Unlike some of the other vendors on this list, Zenefits makes it easy to administer benefits for your employees. This is because it started as a benefits administration company that has evolved into a full service HR software vendor. If you have your own benefits broker, you can integrate their plans with the Zenefits platform for an additional fee. Or, you can browse the Zenefits library of thousands of brokers to find one that is best suited for your business. Zenefits also provides the need-to-know information to simplify the decision making process for both you and your employees.

Cons

A common thread among customer testimonials is that Zenefits customer service leaves a lot to be desired. The Zenefits help center has an extensive library of how-to articles, but many customers have reported a significant delay in getting a response from the Zenefits customer service team. Often, when a customer is able to get in touch with a support representative, they provide links to articles in the help center instead of creating personalized interactions. If you have limited technical expertise, you might find better customer support with a different HR software vendor.

Pricing

Zenefits is available in three different editions:

  • Essentials: $8 per month per employee
  • Growth: $14 per month per employee
  • Zen: $21 per month per employee

Gusto: Best HR software for payroll

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Screenshot of Gusto dashboard.

Pros

If payroll is your biggest need, Gusto is likely the best HR software solution for you. It's a relatively bare bones system, but its payroll feature is as simple and straightforward as they come. You can manage all of your payroll filings and taxes, and your employees can access and modify their information from an easy-to-use self-service portal. Gusto also sends automated alerts, so you can always stay on top of your payroll schedule or changes in the tax code.

Cons

Unfortunately, if you're looking for a full-service HR software, you'll be disappointed by the lack of features Gusto offers. You won't find any learning management, hiring, onboarding, performance management, or employee engagement tools with Gusto. This may not be an issue if you already have tools or programs in place to meet these needs. However, you should look elsewhere if you want an HR software application that will serve a variety of purposes.

Pricing

Gusto is available in four different editions:

  • Core: $39 per month base price + $6 per person per month
  • Complete: $39 per month base price + $12 per person per month
  • Concierge: $149 per month base price + $12 per person per month
  • Contractor: $6 per person per month

Deputy: Best HR software for shift scheduling

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Screenshot of Deputy scheduling dashboard.

Pros

Deputy is an ideal solution if you need a powerful shift scheduling or time tracking platform. With this tool, you can simplify the shift planning process and, in some cases, automate scheduling altogether. Deputy makes it easy to stay on top of fair workweek and break planning compliance, and the demand forecasting features help ensure you have the right number of staff at each of your locations at all times.

Cons

Deputy is less effective when it comes to other areas of HR management. Although it does have integrations for third-party payroll systems, you won't find any tools for benefits administration, employee engagement, or learning management. If you need a comprehensive HR software tool, Deputy most likely will not meet your needs.

Pricing

Deputy is available in four different editions:

  • Scheduling: $2.50 per user per month
  • Time & Attendance: $2.50 per user per month
  • Premium: $4.50 per user per month
  • Enterprise: Contact sales

Freshteam: Best HR software for growing teams

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Screenshot of Freshteam dashboard.

Pros

One of the biggest benefits of Freshteam is how well it integrates with job boards, social media, and external recruiter portals so you can keep track of all open positions. It also has impressive features for tracking applicant engagement through custom links, job-specific email addresses, and employee referrals. Once you've found the best candidate for the job, Freshteam seamlessly transitions to an onboarding platform that helps you welcome new hires and manage all employment-related documents.

Cons

Like Gusto and Deputy, Freshteam isn't a full-service HR software. It's primary focus is on talent acquisition and onboarding, so you won't be able to use Freshteam for your broader HR needs like performance management, payroll, or benefits administration. Some users have also commented that the user interface can be a bit confusing at times, and others have commented that the pricing structure is relatively difficult to scale.

Pricing

Freshteam is available in four different editions:

  • Sprout: Free
  • Blossom: $50 per month per 50 users
  • Garden: $100 per month per 50 users
  • Estate: $200 per month per 50 users

Zoho People: Best HR software for performance management

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Screenshot of Zoho People dashboard.

Pros

If you're looking for an HR software solution that prioritizes performance management, Zoho People may be the perfect fit for your business. Zoho People believes feedback should be an ongoing process from a 360-degree perspective, which is why it supports peer reviews, anonymous feedback, and multi-rater feedback. It also allows employees to tag their unique skill sets and key resulting areas (KRAs), so you can identify the right people for specific projects.

Cons

Zoho People has faced criticism for its confusing interface and frustrating customer support. Some users have commented that they felt they needed a developer to help them implement the software, and that navigating the platform once it's up and running can be a challenge. Customers have also expressed disappointment by the quality of customer support. The documentation can be difficult to understand, and the only way to reach their support team is by submitting a ticket.

Pricing

Zoho People is available in five different editions:

  • Essential HR: $1.25 per user per month
  • Professional: $2 per user per month
  • Premium: $3 per user per month
  • Enterprise: $4.50 per user per month
  • People Plus: $9 per user per month

Who needs HR software?

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Most companies can benefit from HR software, but there are a few exceptions. If you work with mostly freelancers or only have a handful of in-house employees, HR software won't be as valuable. Instead, you can find smaller applications that can address your needs, like payroll or shift scheduling. Although HR software is relatively inexpensive, this will prevent you from paying for tools or features you don't actually need. 

On the other hand, if you have more than a handful of employees, HR software can streamline the tools you use to manage them. Instead of using multiple tools that serve different HR functions, you can adopt a single platform that meets a variety of needs. HR software lets you manage performance, benefits, employee records, internal documents, payroll, and more all in one place.

Why is HR software important?

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HR software offers a number of benefits, especially for small businesses with a limited number of HR staff. You can use this software to help with recruiting the right talent, bringing them onboard, and minimizing attrition. It also helps you identify top performers so you can nurture them and elevate internally.

HR software also helps ensure your business is compliant with employment regulations like the Fair Labor Standards Act. You can document and organize all overtime pay, hiring and promotion decisions, and compensation history for all of your employees. Plus, most HR software has automation tools that help save time with manual, repetitive tasks like following up with candidates.

HR software features

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Depending on your HR needs, you should look for HR software that has the right features for your business. Below are some of the most common HR software features, how they work, and why you might need them. If you're not sure whether you need all of these features, compare seat prices and annual subscription pricing for stand-alone systems and all-in-one HR software to determine which one is more economical.

Applicant tracking

Applicant tracking tools help you keep track of all of your open positions and the candidates who are applying for them. Ideally, these features would integrate with external job boards, career sites, and social media platforms, so you can promote your open positions and attract the right talent. Applicant tracking also helps you centralize all relevant information about a job or candidate, so all interview participants have all the right information on hand.

Related: 5 Must-Have Integrations for Your ATS

Payroll

Payroll is a fundamental part of any business. Whether you have one employee or 100, you need a way to make sure they are being appropriately compensated for their work. As such, payroll tools within a broader HR system give you a way to minimize accounting errors, record deductions, and provide employees with necessary tax documentation. Look for HR software that will integrate with your accounting software so you can streamline your financial tasks and reporting.

Benefits administration

Like payroll, benefits administration is a huge part of HR. These features will help you coordinate your employees' options for health and dental benefits, 401(k) retirement plans, and PTO. Compliance plays a prominent role in benefits administration as well, so look for tools that will ensure you're compliant with laws like the Affordable Care Act (ACA) and the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Performance management

Performance management tools allow you to keep a record of your employees' job performance over time. With the right features, you can set company-wide objectives, your employees can set individual targets, and everyone can track goal progress in real time. This helps with making decisions during performance reviews and also helps keep everyone on the same page with the company's performance as a whole.

Shift scheduling

Especially for retail or food service businesses, shift scheduling plays a critical role in keeping everything running smoothly. These tools allow you to easily coordinate all of your employees' availability and time off requests with the staffing needs of your business at any given time. Plus, you can empower your team to manage their own shift swaps once the calendar is published. This helps eliminate the extraneous administrative tasks that can be extremely time consuming.

Recommended: Maximize Your Time with Online Scheduling Software

Learning management

The backbone of a knowledgeable staff is the learning management tool you use to provide ongoing training and support. In the context of a broader HR system, these tools can help ensure you're compliant with mandatory trainings, like sexual harassment, non-discrimination, first aid, or HIPAA. You can also use these tools to onboard new or recently promoted employees and make sure they know everything about their new roles.

Employee engagement

Employee engagement features offer a way for your team to celebrate accomplishments, acknowledge a job well done, and share their feedback about your company. This might look like a platform for giving recognition or gratitude to a peer, customizable surveys, or a way to redeem points they earn through the recognition program.

Third-party integrations

From a high level, your HR software should integrate with the tools you use in other areas of your business. This could include CRM software like Salesforce, accounting software like Quickbooks, or communication tools like Slack and Outlook. A well-integrated solution will help streamline the tools you use to run your business and reduce the manual processes you need to make them work together.

Mobile app

As with any software you choose to implement, mobility should be a top priority. It's naive to think that your business's HR needs are confined to your physical location. You might need to access your company calendar while traveling, or your employees will likely need to access tax forms from their home computer. A solid mobile app will allow you—and your employees—to manage all necessary HR functions while away from the office.

How to choose the right HR software

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There are numerous vendors that offer robust HR software solutions, but not all will be well-suited to your business. To narrow down your list after reading our comparison, look at reviews and testimonials from other businesses that are similar to yours. Then, request a free trial or live demonstration to see for yourself how the software might meet your unique needs.


This article was originally published on June 03, 2021
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