Human resource management software is an essential element of every business, regardless of size. HR software can streamline and simplify HR processes, making it easier to manage employee information, benefits, payroll and more.
Given that many HR software solutions offer a wide range of functionalities for different industries, small businesses may find it difficult to pick the right HR solution that fits their budget and size. Therefore, we have covered the best HR software for small businesses in 2023.
Feature comparison table for best HR software for small businesses
|Feature||Gusto||Rippling||Paychex Flex||Justworks||Papaya Global||Bamboo HR|
|Benefits administration capability||Yes||Yes||Yes||Yes||Yes||Yes|
|Employee onboarding features||Yes||Yes||Yes||Yes||Yes||Yes|
|Global payment features||No||Yes||No||No||Yes||No|
Best HR software for small businesses
Gusto: Best for time tracking
Gusto is a cloud-based HR software that provides payroll, benefits and HR management solutions for small and medium-sized businesses. The platform is designed to simplify the administrative tasks associated with running a business, making it easier for businesses to manage their workforce and stay compliant with tax laws.
With Gusto, employers can manage their HR tasks, including onboarding, time tracking and compliance. The platform also offers document storage and e-signature capabilities, allowing employers to manage all their HR documents in one place. Gusto’s HR management tools also include performance management features, allowing employers to set goals and track employee progress. Gusto also integrates with various other business applications, including accounting software and hiring tracking tools, which streamlines workflows and reduces manual data entry.
- Gusto simplifies payroll management by automating tax calculations, filings, direct deposits and W-2s.
- Employers can set up different pay schedules and customize employee pay rates.
- Gusto provides a range of benefits options, including health insurance, 401(k) retirement plans and automatic short-term savings for employees.
- Gusto provides tools to help employers manage their HR tasks, including onboarding, time tracking and compliance.
- The platform also offers document storage and e-signature capabilities.
- Gusto integrates with various other business applications, including accounting software and time-tracking tools.
- Gusto is user-friendly, offering an intuitive interface and a simple setup process.
- Gusto’s pricing is competitive, with transparent pricing plans and no hidden fees.
- Comprehensive: Gusto offers a range of HR management tools, making it a one-stop shop for small and medium-sized businesses.
- Customer Service: Gusto provides excellent customer service, with a dedicated support team available to help users with any issues.
- Gusto’s reporting capabilities are somewhat limited, which may be a drawback for businesses that need more detailed reports.
- Gusto is currently only available in the United States, which may be a drawback for businesses with an international presence.
- While Gusto provides a range of customization options, some users may find the platform’s flexibility limited.
Gusto offers three pricing plans:
- Simple: $40 per month plus $6/employee per month.
- Plus: $60 per month, plus $9/employee per month.
- Premium: Pricing information is available upon request.
Rippling: Best for global payroll
Rippling is another top HR software solution that can help small businesses automate their HR operations in one place. The platform offers a suite of tools that cover a wide range of HR activities, including payroll, benefits administration, employee onboarding, time and attendance tracking, and compliance management.
With Rippling, businesses can recruit and onboard local and international employees, contractors and freelancers on a single dashboard. Rippling also allows over 500 integration within the Rippling app, making it possible for businesses to integrate their preferred apps into the platform.
There is also a learning management system within the Rippling software with hosted courses and an opportunity to create custom employee training courses within the system. For small businesses, this can reduce the cost of employee training.
- Rippling HR allows employers to automate payroll processing, tax filing and employee compensation management for employees globally.
- There is a benefits management tool that helps employers manage and track employee benefits.
- The platform has an employee onboarding system that provides digital forms and workflows that streamline new-hire paperwork.
- Rippling features employee tracking capability that allows employers to track employee hours, manage time-off requests and enforce attendance policies.
- There is a training program on the software where employers can train their staff.
- Rippling allows all your employees and contractors to be paid in their local currencies without going through currency conversations.
- With Rippling, you can hire and onboard employers worldwide.
- The platform offers employee training with an option for businesses to design their course without extra charge.
- While the basic plan is affordable, the extra costs that come with the add-ons can be expensive for some businesses.
- There is an additional fee for businesses to access the payroll services.
- The HR support is charged as an add-on option which requires extra costs.
The basic plan starts at $8 a month per user, but there are other fees attached when organizations add other services.
Paychex Flex: Best for managing employee benefits
Paychex Flex is a cloud-based HR management and payroll system developed by Paychex. The platform is designed to help small and medium-sized businesses optimize their HR and payroll processes, streamline their administrative tasks and improve their overall efficiency.
Small businesses can bank on Paychex Flex to manage many HR processes like employee self-service, which allows employees to update their personal information, pay stubs and tax forms. For small businesses that can’t hire an HR expert, Paychex Flex can automate payroll processes, tax calculations and direct deposits, ensuring that businesses are tax compliant.
Also embedded in the Paychex Flex platform is an employee time and attendance tracking system for easy monitoring and recording of employees’ clock-in/out and time off requests.
- Offers employee benefits that provide group health insurance, retirement services and benefits administrations in the form of HSA and FSA benefits.
- Paychex Flex offers tax administration and automatically calculates, pays and files payroll taxes.
- It offers integrations with several other business software.
- Businesses can use the learning management system to equip their employees with new skills.
- Offers streamlined hiring services that make recruiting, screening and verifying candidates’ backgrounds easy.
- Offers one of the most extensive employee benefits for businesses.
- Phone and chat customer support that is available 24/7, irrespective of the plan you choose.
- Ensures you stay ahead of changing laws and tax regulations with compliance experts.
- Restricted to businesses based in the United States.
- Year-end W-2 and 1099 processing attracts an extra fee per employer.
- No detailed pricing for higher plans.
Paychex Flex offers three different pricing options:
- Paychex Flex Essentials: $39 per month, plus $5 per employee.
- Paychex Flex Select: Customized pricing based on your needs.
- Paychex Flex Pro: Customized pricing based on your needs
Justworks: Best for customizations
Justworks is another HR software solution designed to help small businesses achieve and optimize their HR management needs. This HR software is built to offer a single-layered platform for businesses to manage business operations like hiring, payroll, employee benefits and compliance.
Justworks offers a user-friendly interface, making it possible for those with little HR experience to use the software. In addition, the platform makes tracking employee data, payroll and employee benefits easy because they are all bundled on the platform.
- Justworks offers COBRA administration for employees.
- Comes with W-2 and 1099 filings.
- The platform offers employee recruitment and onboarding tracking.
- An automated payroll system that can handle payroll for both full-time employees and contractors.
- Offers integrations with many business software like QuickBooks, Xero and QBO.
- Subscription plans on Justworks are well-spelled out.
- Offers a mobile version for employees.
- Harassment prevention and inclusion training come with no extra cost.
- Two-tier pricing may be pricey for many small businesses.
- The COBRA administration comes with the higher plan.
- Unavailability of a trial version.
Justworks offers two-tier pricing:
- Basic plan: $59/month per employee and $49/month for your 50th employee onwards.
- Plus plan: $99/month per employee and $89/month for your 50th employee onwards.
Papaya Global: Best for handling global payments
Papaya Global is another HR software that simplifies hiring and workforce management through a suite of features. The software’s global employer of record services enable businesses to recruit local talent while remaining compliant with country-specific employment laws.
For businesses that employ from different parts of the world, Papaya Global provides international payroll services that ensure compliance for global payments and local tax form filings.
In addition to basic HR and payroll services, Papaya Global offers immigration services to help you obtain work permits for employees on long or short-term assignments outside their home countries.
- Papayal Global helps employers with cross-border payments to employees.
- The platform has features that allow employees to self-manage their POEs.
- The onboarding of employees is made easier with their employee automation tool.
- The platform has features that assist employers who want to bring their employees over to the US.
- It has features for predictive cost and analytics.
- The platform offers fraud automation for no extra cost.
- The platform offers immigration services to ease employee migration.
- All plans provide local compliance in over 160 countries.
- The basic plan mostly covers payroll processes.
- Accessing more features can be costly for a small business.
- The platform does not own legal entities in countries that it covers.
Papaya Global offers three pricing categories:
- Payroll: Starts from $20 a month per employee.
- Contractor management: Starts from $25 a month per employee.
- Global EOR: This plan goes for $770 a month per employee.
BambooHR: Best for employee performance tracking
BambooHR is another HR software suitable for small to medium-sized enterprises. Its extensive range of capabilities includes tracking job candidates, overseeing employee records, processing paid time off requests, monitoring employee engagement and conducting performance evaluations.
BambooHR’s customizable dashboard allows businesses to configure the software to meet their specific HR needs. The software also integrates with other HR tools and business software, including payroll and benefits administration software.
Prospective users can take advantage of BambooHR’s complimentary seven-day trial to explore its features before making a purchase.
- The platform offers reporting and analytics on HR-related data.
- Automates the process of requesting, approving and tracking paid time off for employees.
- Allow employers to streamline applicant tracking systems.
- It offers a mobile app option for easy access.
- The platform is easy to use and offers customization options.
- It comes with a performance measurement tool, which is important for many employees to boost productivity.
- There is a seven-day free trial, which is enough for businesses to check out the software.
- Pricing is not transparent for potential users.
- Employee time-tracking and performance management tools come as paid add-ons.
- BambooHR’s payroll feature is not proprietary. It’s powered by TRAXPayroll through integration.
How to choose the right HR software for your small business
As a small business owner, managing your workforce can be challenging, especially if you’re handling everything manually. With the right HR software, you can streamline your HR processes and manage your employees more efficiently.
Here are some tips to help you choose the right HR software for your small business.
Assess your HR needs
Before choosing any HR software for your small business, it’s essential to assess your HR needs. Consider the HR processes you’re currently handling manually and identify the areas that require automation. Doing this will help you determine the features and functionalities you need in HR software.
Some common features you may require include employee data management, payroll processing, time and attendance tracking, benefits administration and performance management.
Consider ease of use
Your HR software should be user-friendly and easy to navigate. Your employees should find it easy to use and access their information. Additionally, your HR software should integrate seamlessly with your other business software, such as your accounting software, to enhance efficiency.
Therefore, check out HR software that facilitates your HR process without involving many technicalities. Options like Gusto, Rippling and Paychex Flex have a dashboard you can jump on and start using in a matter of minutes.
Think about scalability
At some point, every business would want to scale to accommodate other offerings. As such, your HR needs to grow as your business expands. You need HR software that can adapt to your business requirements. The HR software you pick should be scalable and able to handle the needs of a growing workforce.
Check for customization options
Customization is another factor you should consider, especially if you run a brand-focused business. You want your products and services to reflect your brand identity consistently.
HR software like Justworks can be customized to meet your specific business needs. The platform allows businesses to view and tailor custom fields to their requirements.
Consider the vendor’s reputation and customer support
When choosing HR software, it’s essential to consider the vendor’s reputation and customer support. Look for a vendor with a track record of delivering quality HR software and excellent customer support. You want a vendor that is responsive and readily available to help you with any issues that may arise.
Consider the cost
Finally, consider the cost of the HR software. Look for HR software that offers value for money. Consider the features and functionalities offered and weigh them against the cost. Remember that the most expensive software is not necessarily the best.