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The Best Human Resources Software of 2021

By Skye Schooley,
business.com Staff
| Updated
Apr 27, 2021

HR software can simplify your human resource responsibilities. Learn what the best HR software options can do for your small business.
Best for Easy Implementation
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Plans start at $8 per month per employee
Automated onboarding
Intuitive self-service dashboard
Best for Employee Onboarding
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Plans start at $5 per month per employee
Self-service employee onboarding
Workflow automation
Best for Small Businesses
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Four preset plans with add-ons
Comprehensive HR functions
Scalable HR software
Best for Performance Management
Two preset plans with add-ons
7-day free trial
Easy-to-use dashboard
HR software can simplify your human resource responsibilities. Learn what the best HR software options can do for your small business.
Updated 04/27/21

 We've updated this page to reflect updated pricing about Gusto's HR solution.

The best human resources software for small businesses streamlines employee onboarding, benefits and performance management, and integrates seamlessly into hiring and operational workflows to make HR management easy for not only HR leaders, but all employees. We examined more than two dozen HR applications, evaluating each on its price, ease of use and valuable features to determine the software we think is best for small businesses.

 

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How We Decided
Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.
26
Considered
12
Researched
4
Selected

Compare Our Best Picks

  GoCo Rippling Gusto BambooHR
Free trial No No No  7 days
Pricing Starts at $5 per employee per month Starts at $8 per employee, per month $39-$149 per month, plus $6-$12 per employee per month Rates are customized per plan
Cloud-based or installation Cloud-based Cloud-based Cloud-based Cloud-based
Mobile app iOS and Android iOS and Android iOS and Android iOS and Android
Customer support Phone and email (plus webchat with HR Support On-Demand add-on) Email and webchat (plus phone support with HR Help Desk add-on) Phone, email and webchat Phone and email

Our Reviews

Rippling: Best for Easy Implementation

Rippling can be implemented in less than four weeks.
It integrates with more than 400 applications.
The employee management platform doesn't include customer support via phone.
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With its HR and IT automation features, intuitive platform, and exhaustive app integration capabilities, Rippling is our choice as the easiest HR software to implement. Rippling software typically takes about 2.5 weeks to implement; once it's in full swing, it can streamline HR processes (e.g., onboarding can be reduced to a mere 90 seconds).

Pricing

Rippling's employee management platform starts at $8 per employee per month. For an added cost, you can customize your plan with advanced HR and IT features. Businesses that want quick access to the HR Help Desk pay an additional monthly fee, too. Rippling doesn't offer a free trial, like some of its competitors, but you can arrange for a free demo with a Rippling product expert, who will show you an up-close look at all of the features.

Features

Rippling's base plan, the employee management platform, comes with a foundational module that assists companies with onboarding, offboarding task management to name a few functions. From there, you can opt to add features like payroll, employee benefits, talent management, and app management and device management. Here's an expanded look at Ripplings' features:

  • Administration: Rippling's solution starts with a base software plan. This module includes a unified employee database, electronic document management and task management. If you want to expand the solution, you can add full-service payroll (e.g., tax filing, direct deposit, workers' comp and garnishments, year-end tax forms and new hire filing) and benefits administration (e.g., online new hire enrollment, open enrollment, employee self-service, payroll deductions and third-party broker support).
  • Employee management: Rippling users can access useful employee management features like onboarding and offboarding, workflow and approval automation, customizable position management, applicant tracking, background checks, e-verification and offer letters. One of things we especially liked about Rippling is that it lets you configure and automate the employee onboarding process. Rippling can also integrate with learning management systems to support employee career growth.
  • Legal compliance: Rippling can help your team maintain legal compliance with courses like sexual harassment training and cybersecurity practices. They can also help automate your ACA reporting and COBRA paperwork.
  • Reporting and analytics: Rippling has customizable reporting features to analyze various aspects of your organization. For example, you can create reports to study employee turnover within your company.

Ease of Use

For business owners and HR staff, tasks can easily be created and assigned to the appropriate employees and managed under one dashboard. Users can create automated workflows to streamline various aspects of HR.

The software is capable of integrating with more than 400 other platforms, which makes it a great asset to enhance any collection of business software. It only takes 2.5 weeks to completely implement the Rippling platform, which means your HR tasks will be streamlined in no time with minimal disruption to your business.

It's not just managers who can use Rippling, though, employees can easily use the software to manage their HR tasks from any device, which offers a big time savings to small companies.

Customer Support

All users of the  Employee Platform can receive real-time live chat and email support. Additionally, larger customers are paired with a dedicated support representative who they can call, text or video chat with questions. In addition, users who want one-on-one support from certified HR pros can add the HR Help Desk feature to their plan for a monthly fee.

As part of our research, we tested Rippling's customer support by contacting the company multiple times via webchat, posing as a small business owner. Rippling representatives were quick to respond to our questions, and while they didn't go into great depth in their answers about the software, they did offer to connect us with an expert, who would give us a demo of the software.

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GoCo: Best for Employee Onboarding

GoCo automates and streamlines hiring and onboarding.
You can access an embedded payroll option or sync your current payroll solution with GoCo's software.
GoCo is compatible with a limited number of third-party app integrations.
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Due to its flexibility, process automation and streamlined onboarding functions, GoCo is our choice as the best HR software for employee onboarding. GoCo automates your hiring and onboarding workflows and helps your company comply with federal and state employment laws and regulations. GoCo is great for those companies that need flexibility: You and your staff can use GoCo's embedded payroll software or synchronize their own payroll software. GoCo's prices are based on a per-employee, per-month basis. GoCo has a demo on its website.

Pricing

GoCo plans start at $5 per employee per month and include hiring and onboarding features, employee self-service capabilities, and MagicDocs (the ability to convert documents into forms that can be electronically signed). This base fee is one of the least-expensive rates we found in our research of HR software.

You can customize the software to include additional features like payroll, employee benefits, time off and time tracking, and HR workflows. These features cost extra, but a GoCo representative will work with you to assess your needs and generate a quote. Further, choosing annual and multiyear contracts can save you up to 20%. GoCo does not offer a free trial, like some of its competitors, but there is a free demo that demonstrates the software's features.

Features

GoCo plans are customizable. Each plan comes with essential hiring and onboarding features, and you can add on other HR functions like payroll, time tracking and automated workflows. Here's an overview of those features:

  • Administration: Many HR software companies offer one of two options with their payroll software: You can either use their proprietary software or the solution integrates with third-party payroll software you may already be using (e.g., QuickBooks). GoCo, however, gives you both options. You can sync GoCo with your current cloud-based payroll software or use the embedded payroll option, Execupay. Both options provide access to automated features like new hire setup, benefits deductions, employee changes, paycheck calculations, time tracking and paid time off. If you use ExecuPay, the embedded option, you have automatic access to payroll data, pay stubs are imported to GoCo, there is unified HR and payroll support, and you're assigned a single payroll login. GoCo works with any benefits broker, and your employees can easily enroll.
  • Employee management features: GoCo's employee management features are where this software shines. GoCo integrates with JazzHR and has essential recruiting and onboarding features like customized offer letters, new hire packets, e-signature capabilities, self-service onboarding, benefits previews, onboarding task assignment capabilities and performance evaluations. What impressed us about GoCo, though, is that there are so many aspects of a company's hiring and onboarding workflows that can be automated and significantly streamlined, saving staff-strapped small businesses countless hours.
  • Legal: GoCo's automated workflows help you comply with federal and state employment laws. For example, it can automatically detect and apply federal and state laws to your tax withholdings, send I-9 and W-4s to new hires, and digitally store and organize essential documents. GoCo also helps your company comply with regulations like the ACA, COBRA and ERISA.
  • Reporting and analytics: GoCo users can generate custom reports to gain insight about benefit changes, compensation, time-off requests and employee turnover.

Ease of Use

GoCo is a web-based platform, which means it's easily accessible from any device. GoCo has a mobile app for iOS and Android.

One limitation with GoCo's ease of use is that it doesn't have the number of third-party integrations that its competitors have. However, the platform is comprehensive enough that the lack of integrations does not present a barrier. GoCo does integrate with many cloud-based payroll systems, as well as other platforms and solutions, including Google, LinkedIn, JazzHR, Slack and GoodHire.

Customer Support

GoCo representatives can be reached by phone or email. Users can also add HR support on demand to their plan. This feature establishes a live chat with HR professionals, so you get valuable advice on a range of subjects, such as customizing your policies or employee handbook, or help with job descriptions, for instance. Further, GoCo has a blog, webinars, e-books and a searchable knowledgebase.

We reached out to GoCo, posing as a small business owner seeking an HR software solution, and were very pleased with how quickly and comprehensively representatives responded. After answering our questions, they offered to connect us with a specialist for a personalized demo.

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Gusto Payroll Software: Best for Small Businesses

Gusto has comprehensive payroll and benefits administration features.
Gusto integrates with 45 popular third-party applications.
The HR services don't include performance management features.
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Gusto not only handles all of your payroll processing and payroll tax responsibilities, but it can also serve all of your human resources needs. This cloud-hosted all-purpose solution combines top-notch payroll services with robust HR software, making it stand out from many payroll services. The software is easy to use and available in multiple service plans. You have the option to use it only as payroll software or to get a full HR software solution out of it too. The HR services include health insurance administration, time tracking, paid time off (PTO) management, and access to certified HR pros who can assist with any HR issue you run into. It is for all of these reasons and more that we chose Gusto as the best payroll software with added HR tools. 

We chose Gusto from a pool of more than 70 payroll companiesRead our reviews of other top payroll companies, see answers to frequently asked questions, and review a complete vendor list on our online payroll best picks page. 

Gusto Pricing and Service Plans 

Unlike some payroll services, Gusto gives businesses a choice of multiple service plans. While each of the four plan options includes payroll processing and payroll tax services, they differ in the number of HR features and tools they include. 

  • Core: Gusto's Core service plan has a base fee of $39 per month, plus $6 per employee. This plan includes full-service payroll across all 50 states, employee self-service, workers' compensation administration, PTO policies, two-day direct deposit, employee onboarding tools, accounting and time-tracking integrations, Payroll on Autopilot, health insurance administration, employee access to Gusto Wallet, and employee offers and document management.

  • Complete: Gusto's Complete service plan also has a base fee of $39 per month, but the per-employee fee is $12 a month. This plan includes everything in the Core plan, plus next-day direct deposit, time-off requests, permissions, employee directory and surveys, time and project tracking, and workforce costing.

  • Concierge: This is Gusto's most feature-rich plan, so it's significantly more expensive than the other plans. It has a base fee of $149 per month, plus $12 per employee. This plan offers everything in the Core and Complete plans with more extensive HR support, including on-demand access to HR professionals who can walk you through any questions or issues you have. It also includes an HR resource center that can help you create employee handbooks, job descriptions, HR guides and harassment training. On this plan, you'll be assigned a dedicated support team that you can contact should you have any problems with the service.

Gusto also offers a contractor-only plan for employers who don't have full-time employees and only work with independent contractors and freelancers. There is no base fee for this plan. You only pay $6 per contractor, per month. This plan allows you to pay contractors as often as you like, gives contractors self-service options, and handles all of the 1099 form creation and filings.

Having access to this range of service plans could be beneficial to businesses without a full-time HR team. One nice aspect is that you can switch plans at any time. For example, you could start with the Concierge plan to get help setting up your HR department and creating an employee handbook and job descriptions. Then, if you reach a point where you no longer need those services, you can change to one of the less expensive plans. 

There are no contracts with Gusto; you pay month to month. There are no setup fees or penalties for canceling the service either. This allows you to test the service for a couple of payroll runs and cancel for no charge if it isn't meeting your needs. 

The only other costs you may incur are for some of Gusto's added services, which you can tack on to any of the three service plans: 

  • Health benefits: No administration fees. You pay only for the premiums.
  • Retirement savings plans: $39 per month, plus $8 a month per participant. There is no setup fee.
  • Workers' compensation insurance: No administration fees. You pay only for the premiums.
  • 529 college savings plan: $6 a month per participant, with an $18 monthly minimum. There are no setup fees.
  • Health savings account: $2.50 per month, per participant. There is no minimum.
  • Flexible spending account: $4 per month, per participant. There is a $20 minimum.
  • Commuter benefits: $4 per month, per participant. There is a $20 minimum.

A $200 annual service charge covers all three tax-advantaged account types (HSA, FSA and commuter benefits).

Gusto Features

These are some of the features Gusto offers that small businesses will find especially valuable: 

Payroll Processing 

Once you've entered all the pertinent information – pay rate, hours worked, deductions, etc. – into the software, the system automatically calculates the payroll. Each pay period, the only new information it typically needs is how many hours each (hourly) employee worked and any bonuses or commissions earned. In all, payroll can be run in just a few minutes.

If you don't have much variation in your payroll each pay period, you can set the system to run on autopilot. With this setting, payroll automatically runs each pay period without any additional input from you. You can run payroll as many times as necessary each month for no additional cost. This flexibility is particularly valuable to employers that have both full-time and part-time employees and also use freelancers.

Payment Options 

Gusto gives you several ways to pay your employees each pay period: direct deposit, prepaid debit cards and printed checks. With direct deposit, paycheck amounts are automatically deposited into each worker's bank account on payday. Prepaid debit cards work in a similar fashion: Paychecks are automatically deposited onto the cards on payday. The final option is to print checks straight from your business's printer. While no special software is needed for this, it does require check stock paper.

Payroll Taxes 

Gusto handles all payroll tax responsibilities. The software automatically calculates your payroll taxes and fills out and files the required tax forms with each local, state and federal agency. Gusto also makes all the required payroll payments on your business's behalf.

Year-End Forms 

The software automatically generates all year-end W-2 and 1099 tax forms for your employees. It then sends digital copies of the forms to each employee and contractor.

Employee Types

You can use Gusto to pay all types of employee. This includes full- and part-time W-2 employees as well as freelancers, consultants, and other 1099 contractors. You are charged the same fee for each employee; there is no additional cost to pay 1099 contractors.

Paid Time Off 

Depending on the service plan you select, Gusto can manage some or all of your tasks related to PTO. All service plans can track PTO. You can set up policies for vacation and sick time and then track employees' accruals and balances. Both the Concierge and Complete plans can handle time-off requests: Employees can submit requests for time off in the software, and their managers can approve or deny those requests.

New-Hire Reporting 

Gusto completes and files all the required paperwork with the state for each new employee your company hires.

Integrations 

The software integrates with a wide range of programs for accounting, time and attendance, expense management, POS, tax preparation, business operations, learning and development, hiring, banking, and HR. These programs include QuickBooks, Xero, FreshBooks, TSheets, When I Work, On the Clock, Deputy, Clover, Shopify and Expensify.

Human Resources Services 

Gusto offers a wide range of HR services, including onboarding tools such as online offer letters and signature documents, employee directories, organizational charts, anonymous employee surveys and survey trend analysis, compliance help, on-demand access to HR professionals, employee relations advising, custom employee handbooks, job description templates, HR guides and policy templates, harassment prevention training, and proactive compliance updates.

Additional Services 

Other services available through Gusto include 401(k) retirement plans, 529 college savings plans, health benefits, workers' compensation insurance, health savings and flexible spending accounts, and commuter benefits. 

Gusto Pros

Part of Gusto's appeal is how simple it is to use. The cloud-hosted service doesn't require you to install or maintain any special software; you can access the payroll system from any web browser. The Gusto platform is also accessible from any smartphone or tablet. 

The platform's homepage prominently features your to-do items, such as Run Payroll and Time-Off Requests. You can easily see or edit employee details and reminders of which contractors need to be paid. 

You can run payroll within minutes. After logging in, you click on the Run Payroll tab and fill in the number of hours each employee worked, vacation or sick days taken, bonuses or commissions earned, and expense reimbursements. 

After clicking the Submit Payroll link, you'll receive a confirmation that the money is being sent via direct deposit or that you can print checks for those who need it. If you don't have much variation in your payroll each pay period, you can set the system to run on autopilot.

Adding an employee into the system is also a simple task. You click on the Add Employee link in the People section and add in all of their details, including their name, address, email address, compensation, banking information for direct deposit, and federal and state filing statuses. 

Gusto gives all your employees and contractors their own login credentials. They can then access the software to see their paystubs, time off and year-end forms. Gusto offers lifetime access to these accounts. This means that employees can log in to their accounts even after they have left your company.

Another huge plus with Gusto is all of the HR tools available. Unlike more traditional HR software, Gusto allows you to choose a basic payroll service or upgrade your plan to access valuable HR tools if your business needs those services. The access to certified HR professionals who can share their expertise is a real benefit for small businesses that can't afford a full-time HR staff member.

Gusto Cons

While there is a lot to like about Gusto, we uncovered a couple of drawbacks during our research. 

Gusto is not an accredited member of the Better Business Bureau, and it has a D- rating on the site. However, only 28 complaints have been filed against the company with the BBB over the past three years, which is relatively few complaints for a payroll service. 

Another potential downside is that the service is not the cheapest we found during our research. However, most of the cheaper options don't offer the wide range of payroll and HR services that Gusto does. That being said, if all you are looking for is software to run your payroll, you might save some money with another company.

Customer Service

We are very impressed with Gusto's customer support. To test its level of service, we contacted the company by phone and live chat numerous times, posing as a small business owner interested in the payroll software. 

Each time we called, we spoke with a friendly and helpful representative. At no time did any of the representatives pressure us to commit to the payroll service. Instead, they focused on our needs, listened to our questions, and gave detailed answers that left us with a clear understanding of what Gusto offers and how it works. 

We also tested Gusto's live chat support. Each time we sent a question, we received almost immediate attention. (Live chat tools from other companies we evaluated had us wait for lengthy periods before we were connected with a representative.) We were always pleased with the answers we received to our questions as well. With other payroll services, we were often left dissatisfied with the support, because we were unable to get answers to our questions. Many times, we were told that we would have to reach the company by phone to get the answers we needed – which discounts the value of live chat. 

In addition to the personal attention you can receive, Gusto provides several valuable resource tools on its website. One of the most impressive is the demo of the payroll software. The website includes a full simulation of the software for you to test. You can see what the software looks like and browse every aspect of it. You can try adding employees in and other important functions. The website also includes a help center and answers to frequently asked questions. 

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BambooHR: Best for Performance Management

You can add performance management features to any BambooHR plan.
You can run customized reports so you can manage your business better.
BambooHR doesn't list pricing online, and some users say it can be expensive.

With its customizable plans, easy-to-use software, and advanced performance-management features, BambooHR is our choice as the best HR software for employee performance management. BambooHR's flexible plans automatically come with traditional HR management features, but businesses that want a comprehensive platform can add on advanced functions like payroll, time tracking and performance management.

Pricing

BambooHR has two separate HR software plans (Essentials and Advantage) that users can customize with add-on options like TRAXPayroll, time tracking and performance management. Like other HR solutions we evaluated, you're charged on a per-employee, per-month basis. You're not bound by a long-term contract, and there are no cancellation fees. BambooHR is ideal for small businesses that want a flexible software option.

BambooHR does not list their pricing online; BambooHR will work with you to come up with a customized quote. Your costs hinge on the number of employees you have, what type of HR functionalities you want access to and how soon you want to implement the software.

According to some user reviews, BambooHR's software is more expensive compared to other HR platforms, however, those same users say the features are well worth the cost. BambooHR offers an online demo and a seven-day free trial.

Features

BambooHR has two HR software plans: Essentials and Advantage. For this review, we evaluated the Advantage plan, as it is more comprehensive. With either plan, users have the option to add on advanced HR features like payroll, time tracking and performance management. Here's more about BambooHR's features:

  • Administration: BambooHR plans come with essential HR capabilities like employee records tracking, HR document storage and employee self-service. BambooHR is not an employee benefits broker, but it can connect you with one, and once your benefits are set up, it can help track and manage them. Companies add TRAXPayroll, which as part of its payroll solution, offers help with tax filings and end-of-year tax forms. Users can also add time tracking, which opens up features like daily time entry, employee timesheets, automatic overtime calculations, approval workflow and payroll reports.
  • Employee management: BambooHR helps you manage employees from recruitment to offboarding. With the software, you can post and track job openings and distribute them via social media and your website's career page, which makes recruiting easier for busy hiring managers and business owners. Using the software, you can review and rate candidates, send emails and track the status of candidates, send offer letters and new hire packets, and onboard with e-signature capabilities.

    BambooHR's performance management capabilities are an add-on; they aren't included with either the Essentials or Advantage plan. With the add-on, you can create and monitor employee goals, elicit peer feedback, and perform self and manager assessments. You also have access to employee and company performance reports. These are essential in managing employee performance and not something that all of BambooHR's competitors offer.
  • Legal compliance: Each plan gives users access to workflows and approvals. Automating certain processes helps your business comply with certain federal and state laws and regulations. With BambooHR, you can create custom access levels, which protects employees' privacy and ensures that only team members with the appropriate level of authority can view HR information relevant to them. An essential, but somewhat unique compliance feature BambooHR offers is its audit trail function. This features tracks each change that a member of your company has made to the system.
  • Reporting and analytics: The software comes with varying levels of reporting, depending on your plan type. Advantage plans give you access to custom reports.

Ease of Use

One of BambooHR's standout features is its usability. The web-based platform means any of your team can access the software from any device, including smartphones and tablets. The dashboard is user-friendly and doesn't require a lot of training to understand the features. However, BambooHR offers several online videos that break down each feature and function for those who would prefer an online tutorial.

To make the platform even easier to use, BambooHR's open API lets businesses integrate other applications into the software. Additionally, BambooHR's marketplace offers various other HR solutions and customizable third-party development options.

Customer Support

Users can turn to BambooHR's blogs, library, webinars, HR glossary, and HR crisis recovery platform for additional help regarding any HR issue or question they have. The company has also provided several demo videos that explain the software's features in detail.

If you do have a question or concern and prefer to speak with a BambooHR representative, you can call the company, email them, or there's a contact form on the website that will relay your message to the right person. As part of our evaluation, we reached out to BambooHR a few times, posing as a small business owner interested in purchasing HR software. In our interactions with their reps, we were pleased with their support and their thorough answers to our questions.

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How Much Does HR Software Cost?

The cost of HR software varies depending on the size of your business, your industry and the features you need. Most HR software pricing is based on a per-employee basis, averaging somewhere between $5 and $30 per employee per month. Some HR software providers charge an additional monthly fee, ranging roughly from $100 to $200 per month, on top of the per-employee fees if you want features like payroll software and employee benefits.

Some HR software solutions are month to month basis with no long-term requirements, while others require that you sign an annual contract.   

One provider ‒ BambooHR ‒ offers a short free trial (seven days). Our other best picks, while they don't have a free trial, instead have either an online demo or a demo that you can schedule with a company rep that walk you through all of the software's features.

 

Buying Guide

What Is HR Software?

Human resources software helps businesses recruit, onboard and manage employees. It integrates time scheduling and management tools to organize a company's workforce; its payroll features accurately compensate employees; and performance management and reporting features facilitate and track employee development.

When conducting your research about HR software, you likely came across terms like "human resources information systems (HRIS)," "human resource management systems (HRMS)," or "human capital management (HCM)" – although these sound different, they're all referring to HR software.

What HR Software Can Do for Your Company

Small business owners and HR professionals know how time-consuming managing human resources can be. Although employers were previously limited to manually performing HR functions, human resource software has automated and simplified the process. Some companies offer specific types of HR software, like those for recruiting, employee scheduling, and time and attendance, while others offer comprehensive HR solutions to handle nearly every aspect of workforce management.

The best HR solutions streamline employee recruiting; automate onboarding and offboarding; administer and track employee payroll and benefits; and manage employee attendance and performance. Additionally, HR technology should help your company comply with employment and labor laws.

These solutions can also provide great insight into your workforce. All HR software offers reports that provide a treasure trove of data that can be used to improve underperforming areas.

Most of today's HR software is cloud-based. The self-service portals and intuitive dashboards make it easy for employees to take control of HR-related functions like managing their benefits and compensation, requesting time off, and accessing performance reviews.  

Standard Features in HR Software

The features available in each HR software package can vary, but here are some standard ones that most providers offer:

  • Recruiting and onboarding: Tools used to recruit, onboard and offboard employees are commonly found in most HR software. To look at this more closely, these features include job posting and syndication, configurable job applications, interview and assessment functionality, offer letter templates, new hire packets, e-signatures capabilities, workflow automation, and training tracking.
  • Payroll: Most HR software either comes with a built-in payroll option, or it integrates with third-party payroll software. Built-in payroll modules typically include the ability to accurately calculate employee paychecks, pay employees via direct deposit, handle all payroll tax responsibilities and provide online pay stubs.
  • Time and attendance: Many HR software options include time and attendance systems so employers can accurately track when employees are on and off the clock. These systems also manage paid time-off requests and accruals. This data is automatically synced into payroll solutions to streamline payroll processing.
  • Benefits administration: HR software can help companies administer employee benefits like medical, dental, and vision insurance; employee retirement accounts; life insurance; short- and long-term disability insurance; health savings accounts; and flexible spending accounts. Some HR software companies also help employees with benefits enrollment and tracking.
  • Performance management: Standard HR software allows you to track and manage employee performance. This can include tools for goal setting and monitoring, succession planning and performance evaluations. They can also include personalized dashboards and learning management systems (LMS) with training courses so you can easily provide mandatory (sexual harassment) training or professional development training.
  • Legal compliance: HR software helps you maintain audit-ready records and compliance with employment and labor laws such as the Affordable Care Act (ACA) and the Consolidated Omnibus Budget Reconciliation Act (COBRA).
  • Reporting: Most HR software provides helpful reporting and analytics. You may, depending on the type of reports you want, have to sign up for a more advanced software plan, but basic plans typically provide data on your team, payroll, taxes and more.
  • Self-service dashboard: Employees can use the software to access a self-service dashboard to manage their benefits, request time off and to complete their performance evaluations. Since most systems are cloud-based and offer mobile apps for iOS and Android devices, employees can access the software wherever they have an internet connection.

 

How to Choose the Right HR Software for Your Small Business

The right HR software package for your company depends on the functions you want to streamline and how the solution will complement other software programs your company is already using. Some businesses need a comprehensive, full-service HR platform to manage all aspects of HR, whereas others may want specialized software to help with one or two aspects of HR.

A key factor to consider is the software's integration capabilities, primarily if you are already using programs that perform some HR functions. For example, if you need a solution to help onboard and manage employees but want to keep your current payroll system, you want employee onboarding HR software that integrates with your current payroll platform.

Small businesses should also pay attention to platform functionality. It should be intuitive and easy for the whole team to use. Customer support is also important. Since HR software handles a lot of the critical functions of running a business, you want to make sure help is available when you need it, regardless of whether it is in the middle of a workday, at night, or over the weekend.

Cost and contractual obligations are other key aspects to consider. Some HR software allows you to use their services on a month-to-month basis; others require to sign an annual contract.

HR Software FAQs

How can HR software help your company's bottom line?

By automating your HR processes, human resource software saves your HR team time that they would otherwise spend manually performing administrative functions. This gives your HR department more time to execute other important tasks. In addition, most HR software helps you comply with federal, state, and local laws, which can reduce the possibility of costly legal issues.

What should you look for in an HR software package?

Making sure the solution has all of the functionality and features your team needs is of critical importance when looking for HR management software. Are you in need of a recruiting, applicant tracking and onboarding solution? Do you need payroll, time and attendance tracking, and benefits administration? Analyze your current HR process to determine which functions you want the HR software to manage.

If the HR software package is missing a few of the features you want, ask the vendors you're considering if the solution will at least integrate with other platforms that fulfill those needs. Additional features to look for in an HR software package are reporting and analytics capabilities to track your processes, a self-service portal for employees to access and manage their information, a mobile app, and great customer support. 

How do you know when your small business needs an HR software solution?

If you are a small startup with a few employees or you can easily manage all of your HR tasks by hand, you may be fine handling all of your HR responsibilities manually. However, as soon as your HR functions take up too much time or you expand, it is time to invest in HR software.

Regardless of how small or large your business is, HR software is a great way to streamline common core HR tasks like record-keeping, payroll and talent management. It is also a great way to help your business maintain compliance with employment and labor laws.

If your business needs help with any of these functions, consider getting an HR software solution. 

What do the best HR software solutions have in common?

The best HR software solutions automate and streamline your HR processes. Not only do they help with recruiting, onboarding, employee engagement, administrative tasks, time tracking, employee compensation, and benefits administration, but they also allow you to comply with employment and labor laws.

The best HR solutions are cloud-based and intuitive, they come with easy-to-use dashboards and mobile applications, and they provide quick and responsive customer support.  

What special features can you add to HR software packages to customize them to your needs?

Many HR software solutions provide preset service plans; some companies let you add customizable features – this is a great option for small businesses that only need specific HR management functions.

For example, you may be able to add on components like payroll, benefits administration, time tracking, performance management, learning management systems, advanced HR support and advisory services. Some providers even offer industry-specific HR software that is customized to each business's unique needs.

Community Expert Insight

We reached out to several small business owners and HR professionals to learn which software applications they use and what features they find most valuable.

John Ross, president and CEO of the online education company Test Prep Insight, recently switched to Gusto. He was in search of a comprehensive, one-stop-shop platform that could handle all of his HR needs.

"Being a small business owner, I have very limited time, and I do not want to be jumping from platform to platform to handle all of my different HR needs," Ross told business.com. "I like that Gusto handles our time tracking, payroll, onboarding, workers comp and benefit plans. The efficiency of having everything in one place is the most appealing aspect to me."

Other Gusto features Ross finds most helpful are its automation tools and great customer support.

"I have only had one small issue with switching over our medical plan, and their customer support was awesome when I needed help," said Ross. "Having only 10 employees, we are not big enough to warrant having a full-time HR person, so Gusto acts as our HR guru."  

Vincent Scaramuzzo, founder and president of the recruiting firm Ed-Exec, wanted an HR solution to simplify his HR process as well, which is why he chose BambooHR. The platform's usability, integrations, and applicant tracking are what he finds most appealing. Having the ability to easily track a candidate through the entire hiring process was an essential feature for his firm.

Scaramuzzo said BambooHR has been easy to integrate into his company's existing HR processes because of its ease of use for employees and administrators.

"It isn't the cheapest software around, but it takes the fuss out of processes such as payroll management, employment contract management and talent acquisition," Scaramuzzo said.

"Before buying software, identify areas in your existing HR system that need improvement, then go for a solution that will fill in those gaps effectively and within your budget," said Scaramuzzo. "This way, you will avoid the all-too-common mistake of buying software just because it is from a popular vendor and not because it meets your company's needs."

Our Methodology

At business.com, we strive to be fair and objective in our research and review process. We began with a list of 26 HR software companies. We discovered these companies through performing extensive searches for HR software, identifying key industry players and analyzing other review site recommendations. We also sought out small business owners and asked them which software solutions they used and would recommend.

After performing an analysis of each HR software company, we reduced our list to 12 solutions. Next, we researched the features each software offered, scrutinizing recruiting, employee onboarding and offboarding, payroll, time and attendance, benefits administration, performance management, legal compliance, reporting and analytics, integrations, and dashboards.

From these 12 companies, we selected four that stood out as the best for small businesses, employee onboarding, performance management and easy implementation.

We analyzed these four best picks further by watching demos and contacting their customer support by phone, webchat, and email, posing as small business owners in need of HR software. We inquired about pricing structures, contract requirements, features and any details we couldn't find online.

Skye Schooley
Skye Schooley
business.com Staff
See Skye Schooley's Profile
Skye Schooley is a staff writer at business.com and Business News Daily, where she has written more than 200 articles on B2B-focused topics including human resources operations, management leadership, and business technology. In addition to researching and analyzing products that help business owners launch and grow their business, Skye writes on topics aimed at building better professional culture, like protecting employee privacy, managing human capital, improving communication, and fostering workplace diversity and culture.
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