The case for HR software tools has grown as more businesses shift towards a hybrid or remote working model.
Plus, having HR software tools in place can help to increase productivity, provide working insights, more benefits for employees.
An HR tool – also known as HR management tool – can mean a whole platform or it can be one component such as recruitment or absence management software.
Maciek Kubiak, head of people at PhotoAiD, simply uses a recruitment platform. “It is useful for conducting pre-employment tests for potential candidates,” he told Small Business. “It makes the recruitment process quicker and more effective. Plus, it is easy to use and permits to save time and focus on valuable applications, managing talent more efficiently.”
For the purposes of this article, we’ll be looking at platforms which provide multiple HR functions.
See also: A guide to outsourcing HR
Which HR software should I go for?
Before you make your decision, consider these factors for your employees and HR team and well as the business as a whole.
Pam Hinds, head of HR at RotaCloud, comments: “When it comes to choosing HR software tools, one of the main things you need to consider is – does it have all the features you need? This could be anything from absence and annual leave tracking to recruitment support or performance management tools. You don’t want to risk paying for a system that has lots of functionality that you won’t use, or a service that doesn’t do everything you need it to. So, it’s important to know the key features you need from your software, or problems you need to address, from the outset.
Once you’ve narrowed down a shortlist of software that has the features you require, Hinds highlights other key points to consider:
- Useability. How easy is it to set up and use? Will it take time for you and your team to learn it or can you jump straight in?
- Integrations. Does it integrate with the software and tools you already use? For instance, if you’re looking for time and attendance software, does it integrate with your payroll software?
- Security. Will you be storing important or sensitive information? How secure is the system?
- Customer service. Is it easy enough to get help should you have a problem?
- Scalability. How scalable is it? Is it easy to add or remove employees from the system as you grow, and is the price for doing this clear and transparent?
- Price. Is it within your budget?
Alper Yurder, general manager of Witco, advises to look for customisation, for features that are essential to your business and can grow with your business.
“You’re not just getting HR software tools for now, you’re getting tools for the business you want to be. It’s about future-proofing,” he told Small Business.
“The right software depends on the culture of your business too – and in some cases even the sector you operate. For example, if you’re in a highly regulated business such as healthcare or finance, certain tools might be a better fit than others.”
You’ll want to factor in the ethics of the software company you go with. “Make sure the values of your provider that you go with are in-line with the ethics of your own company,” said Yurder.
>See also: Top 10 HR tips
Should I use paid-for or free HR software?
Another important question you want to ask yourself is how much you want to pay or if you’d be willing to go for a ‘freemium’ product which comes with free features and extra costs for additional features.
Hinds points out that there are plenty of free or lower cost options on the market, depending on what your needs are. “However, there are often limits or caps with free systems, on things like number of users, amount of storage, the features you can use and access to support,” she said. “So, it’s important to look at what’s included, and excluded, in free versions of software to save you from getting set up and trained, then realising that a specific feature you need is in a paid tier.”
>See also: How to decide on HR policy for your small business
Cloud-based vs on-site server
Another point to consider is choosing between something that’s cloud-based or on an on-premises physical server.
“Cloud software is always available, and everyone can log into it, from anywhere,” Hinds told Small Business. “But with server-based software, you can often only access it from a set location, and if your server goes down, all your software goes down with it and remains inaccessible until it’s fixed.”
Cloud-based systems are popular because of the ease of access from virtually anywhere along and you don’t need a hefty on-site server to run it. However, some argue that having data saved on a physical server is more secure than saving it in the cloud, as there is restricted access, according to Hinds. “Which option is best for you may depend on the existing hardware and infrastructure set-up of your business.”
“More and more services are moving towards the cloud these days. There are more pros than cons,” said Yurder. “Cloud-based software is more agile – you benefit from product updates instantly. It’s also more secure, given that providers create infrastructure that you wouldn’t be able to create yourself.”
Best HR software tools for small businesses
As you’ve gathered, every small business has differing needs. We’ve listed some of the best HR software tools below, giving you a run-down key features and integrations that can work with your existing software. A lot of software providers offer largely similar services, but the core features listed are those on their most basic package.
| Provider | Recruitment | Onboarding | Performance management | Absence management | Time tracking | Document storage | Training | Reporting | Employee wellbeing |
|---|---|---|---|---|---|---|---|---|---|
| Monday.com | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
| Breathe HR | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
| Factorial HR | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||
| CharlieHR | ✔ | ✔ | ✔ | ✔ | |||||
| Zoho People | ✔ | ✔ | ✔ | ||||||
| Staffology | ✔ | ✔ |
Best for recruitment
You’ve probably come across Monday.com before. This platform gives you the ability to manage several different functions on top of HR such as software development, marketing and project management.
With the recruitment pipeline, it’s easy to track where each candidate is in the hiring process. Various HR templates are available for your current employees and they’re customisable – you’ve got a recruitment tracker, attendance tracker, holiday tracker, feedback tracker and an employee info template.
If you’re a newer business, there are lots of helpful articles on the website to help you with HR and other areas of your small business.
Key features
- Recruitment
- Onboarding
- Employee wellbeing modules
- Training and development
- Performance management
Integrations: Teams, Gmail, LinkedIn, Slack and more.
Pricing (per month, billed annually)
Individual (up to two seats): £0
Basic (per seat per month): £7
Standard (per seat per month): £9
Pro (per seat per month): £14
Enterprise: Bespoke
Best for customisation
BreatheHR is a small UK-based HR provider.
It’s all built around the Core HR package, which has a staff holiday planner, sickness and absence tracking, performance management and an HR dashboard with tracking. It’s customisable, so you can add on modules. A free pro-rata holiday entitlement calculator is available on the website too.
Key features:
- Absence management
- Performance management
- Shift tracker
- Reporting
- Document storage
Integrations: API
Pricing
Core HR plan: £12 per month per account
Module add-ons
Additional HR users: £5 per month
Recruitment: £5 per month
Expenses: £5 per month
Recruitment Pro (with unlimited vacancies): £20 per business per month
A 14-day free trial is available.
Best for security
Factorial HR is big on security. It has data security and firewall along with single sign on so you don’t need to create a username and password. Set custom folders and assign permissions to different employees. Plus, you can safely store sensitive information like medical leave documents and contracts, enabling digital signatures for extra security.
As for performance management, you’ve got personalised questionnaires where employees can leave feedback. The time tracking app lets you track wage compliance and management as well as approve employee time sheets and reject extra hours. Automate and personalise onboarding and offboarding to make the process smoother.
An app is available for employees on App Store and Google Play.
Key features:
- Document management
- Performance reviews
- Reporting
- Onboarding
- Employee self-service
- Absence management
- Time tracking
Integrations: Gmail, Outlook, Slack, Zapier, API
Pricing
Business: £5.25 a month per employee per month
Enterprise (includes facial recognition, automated processes with custom workflows, document creation and more): bespoke
Recruitment add-ons
Basic (up to ten job offers): £49 per month
Pro (unlimited job offers): £129 per month
Best for businesses with no HR team
CharlieHR has a lot of ‘self-serve’ features so that your employees can see to their own admin. They can also choose the right perks for them. Plus, they’re quick and easy to roll out. Perks come free with Charlie subscription, with over 30,000 deals and discounts available.
Create engagement surveys so that your team can give regular feedback including light-touch micro polls that guarantee engagement. Results are anonymous to improve honesty.
Custom onboarding forms can be filled out by the new starter – and it’s all legally compliant. Follow onboarding checklists so that new employees can get support from the right people. Offboarding is just as straightforward as the offboarding checklist makes sure that everything’s covered before the employees leave.
Key features:
- Employee self-service
- Employee perks
- Employee surveys
- Onboarding and offboarding
- Reporting
- Absence management
Integrations: Slack, Trello, Google Calendar, Outlook
Pricing
CharlieHR (light): for businesses of any size, £4 per employee.
CharlieHR + HR Advice (Junior): For smaller teams of ten or fewer, from £179 a month + £4 per employee
CharlieHR + HR Advice (Standard): For teams of 10-100 people, from £299 per month + £4 per employee
CharlieHR + HR Advice (Large): For teams of 100+ people, £599 per month + £4 per employee
There’s a two-week free trial on all packages.
Best for affordability
Zoho People is a good shout for businesses that also use Zoho software, such as the CRM. It also works for businesses with grand growth plans. Employee database management with a cloud-based employee database management system mean you can scale as your company grows.
Documents are stored in a classified central vault including policy documents, company handbook and leave policies. Reprimands, offer letters and appraisals can too be stored in here with increased privacy. For extra security, there are customisable e-signature workflows.
Zoho People works in a variety of languages: French, German, Dutch, Swedish, Portuguese, Italian, Korean, Spanish and more. Perfect for international teams.
Key features:
- Employee database management
- Document management
- Absence management
- Reporting
- Employee self-service
Integrations: Other Zoho applications (such as CRM, Analytics, Projects), Zapier, Google Calendar, Docusign, Microsoft
Pricing (per user per month)
Essential HR: 83p
Professional: £1.50
Premium: £2.50
Enterprise: £4
People Plus: £7
Add-ons
Employee profiles: Start at 25p per person per month
Zoho Recruit (corporate version): £480 per recruiter per year
Learning management system: £14.40 per user per year
A 30-day free trial is available on all packages.
A ‘Forever free’ service is another option for businesses which have up to five users. It’s a simplified version with absence management and an employee database.
Best for employees
Staffology, as its name suggests, is designed with staff in mind. It’s great for businesses which have staff who work variable hours as there is a customisable work patterns function for part-time or flexible workers.
Staff can manage their expenses too. The expenses management module means staff can submit and manage their own expenses, which can be submitted from anywhere. You as an employer can run reports into how much each department is spending in order to locate areas of high spend. Build up your HR by using other modules including recruitment, training and performance.
Key features:
- Absence management
- Employee database
- Reporting
Integrations: Payroll software
Pricing (per employee per month)
Foundation: 50p (a minimum spend of £5 per month applies)
Essential: £1.50 (a minimum spend of £10 per month applies)
Professional: £3
Ultimate: £4.50
I still don’t know which HR software tool is right for my business
Sometimes it’s a case of trying HR software out to get a feel for different tools. Make use of those trial periods where you can! If you’re having trouble pinning down your business’ needs, check out the link below.