HR – Boring but Necessary (Let’s Make It Easy)

HR – it’s not exactly thrilling, is it? But let’s be real – every business, big or small, needs it. Whether it’s tracking holidays, keeping employee records, or sorting out payroll, HR is the glue that keeps your team running smoothly.

The good news? It doesn’t have to be a nightmare. With the right HR software for small businesses, you can automate the dull bits, reduce admin stress, and focus on what you actually enjoy – like growing your business (or sneaking off for a tea break ).

This isn’t about drowning you in jargon or stuffing your brain with unnecessary details. This is about making HR simple – no fuss, no faff, just easy solutions that keep things ticking over.

 

Why Bother with HR Software For Small Businesses?

The days of overflowing filing cabinets, lost sticky notes, and endless spreadsheets are long gone. In today’s fast-paced business world, HR software for small businesses is more than just a luxury—it’s an essential tool for keeping everything organized, efficient, and compliant. Whether you're managing holiday requests, payroll, recruitment, or performance tracking, a reliable HR system for small businesses can save time, money, and a whole lot of stress.

Let’s break it down. A great HR tool for small businesses means:

Fewer Mistakes – Say goodbye to lost holiday requests, forgotten pay raises, and missed compliance deadlines. Automation reduces human error, ensuring that critical HR processes run smoothly.

Less Paperwork – Low-cost HR software automates everything from employee onboarding to payroll processing, eliminating manual admin work. No more digging through old emails or misplacing important documents.

More Time to Focus on Growth – Instead of spending hours sorting through HR paperwork, business owners and managers can focus on scaling their business, improving team productivity, and fostering company culture.

HR software for small businesses doesn’t have to be complex or expensive. Depending on your needs, you can invest in specialized HR tools for small business or opt for a full-service HR system that covers everything.

Two types of HR software options to consider:

Targeted HR tools – If you only need to streamline a specific HR function, such as tracking employee absences or handling payroll, standalone low-cost HR software options can do the job without breaking the bank.

All-in-One HR Systems for Small Businesses – A comprehensive HR system can handle everything in one place, from recruitment, payroll, performance reviews, and compliance tracking to employee engagement and training.

Maciek Kubiak, Head of People at PhotoAiD, highlights the impact of HR software in recruitment:

“It makes hiring quicker and less painful. It’s easy to use and lets us focus on the best candidates instead of getting buried in admin.”

This is a key advantage—the right HR tools for small business can streamline hiring, track applications, and even integrate with job boards to attract the best talent without drowning in spreadsheets and paperwork.

 

 

What’s Inside This Guide

• How to pick the right HR software

• Free vs paid options

• Cloud-based vs on-site?

• The top HR systems for small businesses

• Feature comparison – what’s actually worth paying for?

• Next steps to get going

 

Picking the Right HR Software – No Fuss, No Faff

Before signing up for anything, think about what you actually need.

Lucy Barker, Head of HR at WorkSwift, puts it simply:

“The key is to choose software that fits your actual needs. You don’t want to pay for bells and whistles you’ll never use, but you also don’t want to realise too late that you’re missing essential features.”

Once you’ve got a shortlist, consider:

• Ease of use – Can you and your team get the hang of it quickly?

• Integration – Does it work with payroll, accounting, or project management tools?

• Security – Does it protect employee data?

• Support – How easy is it to get help when things go wrong?

• Scalability – Can it grow with your business?

• Cost – Is it worth the price tag?

James Delaney, General Manager at PeopleFlow, says to think ahead:

“You’re not just investing in HR software for today – you’re setting up your business for the future. Choose a system that can adapt and scale with your growth.”

Also, make sure the company’s values align with yours – after all, you don’t want to work with a provider that doesn’t match your ethics.

 

 

Free vs Paid HR Software – What’s the Deal?

Money matters. You can go for a free option or invest in a premium system. But beware—free software isn’t always the best choice.

Risks of Free HR Software

• Limited Features – Many free plans only offer basic HR functions, meaning you may need to pay for essential extras like payroll or performance tracking.

• User & Storage Caps – Free versions often restrict the number of users or the amount of data you can store.

• Security Concerns – Free tools may lack advanced security protections, making your employee data more vulnerable to breaches.

• Lack of Support – Customer service is often limited or non-existent with free HR software.

• Flexibility Issues – Many free options don’t scale well, meaning you may outgrow them quickly and need to migrate to a paid platform.

Lucy Barker warns:

“Free HR software can be a great starting point, but businesses need to be aware of the limitations. Many end up upgrading sooner than they expect.”

Why Paid HR Software Might Be Worth It For Your Small Business

• More Features – Covers all HR needs, from onboarding and time tracking to payroll and compliance.

• Better Security – Protects sensitive employee data with advanced encryption and compliance tools.

• Dedicated Support – Access to customer service and technical support when you need it.

• Scalability – Grows with your business, allowing you to add features and users as needed.

• Integration with Other Tools – Seamlessly connects with accounting, payroll, and other business systems.

James Delaney adds:

“Investing in a paid HR system means fewer headaches down the line for your small business. It’s about making HR hassle-free and future-proof.”

If you need flexibility, paid hr software is usually the better option – especially if it saves you hours of admin time and prevents costly mistakes. Many providers also offer free trials, so you can test out features before committing.

 

Cloud-Based or On-Site? vs

One of the biggest decisions when selecting HR software for small businesses is whether to opt for a cloud-based solution or an on-site system. Each option has its advantages, and the best choice depends on factors like budget, security requirements, scalability, and how your business operates daily.

With HR software playing a crucial role in managing employee records, payroll, recruitment, and compliance, picking the right system can streamline HR processes and future-proof your business. Let’s explore the key differences.

☁ Cloud-Based HR Software: The Flexible, Scalable Choice

Cloud-based HR software for small businesses has surged in popularity because of its ease of use, accessibility, and lower upfront costs. Instead of being installed on local servers, everything runs on the cloud—meaning you can access your HR system from anywhere with an internet connection.

✔ Accessible from Anywhere – Whether you’re working remotely, managing employees across multiple locations, or on the go, a cloud-based HR system for small businesses allows you to log in from any device, anytime.

✔ Automatic Updates & Security Patches – Software providers handle all updates, ensuring you always have the latest security features and compliance tools.

✔ No Expensive Servers or IT Maintenance – Cloud solutions eliminate the need for in-house IT teams to maintain hardware or perform manual updates.

✔ Scales Easily as Your Business Grows – Need to hire more employees or expand internationally? A cloud-based system grows with you, without needing costly infrastructure upgrades.

✔ Integrates with Other Cloud-Based Tools – Many cloud-based HR systems seamlessly connect with payroll, accounting, and project management tools, creating a fully integrated business ecosystem.

Did You Know? The majority of HR software providers now prioritize cloud-based solutions because of their convenience and efficiency. Many even offer mobile apps, allowing employees to request leave, check payslips, or update their details on the go.

Lucy Barker, an HR consultant, explains:

“Cloud-based HR software is the go-to choice for most small businesses because of its flexibility and ease of access. But if security and data control are your top priorities, an on-site solution might be better.”

 

On-Site HR Software: Full Control Over Data & Security

For businesses that prioritize maximum data security or operate in environments with unreliable internet connectivity, an on-site HR system can be the better option. With an on-premises setup, all employee records, payroll data, and HR processes are stored on company-owned servers instead of in the cloud.

✔ Gives Full Control Over Data Storage & Security – Businesses with strict data protection policies or compliance requirements can manage their own security protocols instead of relying on external cloud providers.

✔ Works Without Internet Access – Unlike cloud-based systems, an on-site HR solution can function offline, making it ideal for businesses operating in remote areas with unreliable internet access.

✔ Requires In-House IT Expertise for Maintenance – On-site systems demand regular software updates, security patches, and IT support, making them more resource-intensive than cloud-based alternatives.

✔ Can Be a One-Time Cost Instead of a Monthly Subscription – While cloud-based HR software typically comes with a monthly or annual fee, on-site software often requires a one-time purchase, potentially saving money in the long run.

Did You Know? Large enterprises and organizations with strict data security policies, such as finance, healthcare, and government sectors, often prefer on-premises HR software to ensure complete control over sensitive employee data.

James Delaney, a tech advisor, adds:

“Think about how your business operates daily. If remote work is part of your setup, cloud-based is the obvious choice. If you need maximum data control, an on-site system could be a safer bet.”

Ultimately, the decision comes down to your business model, security concerns, and budget. Many HR software for small businesses providers offer both options, so take advantage of free trials to find what works best for you.

 

 

The Top HR Systems for Small Businesses

Finding the best HR software can be overwhelming. To make things easier, we’ve reviewed five of the top options available for small businesses. Each has its strengths, pricing, and potential drawbacks, so you can choose the one that fits your needs best.

BreatheHR – Best for UK-Based Small Businesses

BreatheHR is designed with UK small businesses in mind, offering an intuitive interface and essential HR tools. It simplifies absence tracking, performance management, and document storage.

Pros:

• Easy to set up and use.

• Affordable for small businesses.

• GDPR-compliant with secure document storage.

• Great customer support.

Cons:

• Limited advanced reporting features.

• No built-in payroll system.

Pricing: Starts at £13 per month for small teams, with scaling prices based on the number of employees.

BambooHR – Best for Growing Teams

BambooHR is a well-rounded HR software that excels in recruitment and employee self-service. It’s ideal for small businesses that plan to grow rapidly.

Pros:

• User-friendly interface.

• Strong recruitment and applicant tracking features.

• Employee self-service tools.

Cons:

• No built-in payroll for UK users.

• Pricing can be expensive for small teams.

Pricing: Custom pricing based on the number of employees, but typically starts around £4 per user per month.

Zoho People – Best for Budget-Conscious Businesses

Zoho People is a great fit for small businesses looking for affordable HR software with solid functionality. It integrates seamlessly with other Zoho products, making it a good choice if you already use Zoho tools.

Pros:

• Low-cost plans suitable for startups.

• Cloud-based and highly scalable.

• Multi-language support.

Cons:

• Can be overwhelming for beginners.

• Basic plan lacks advanced HR features.

Pricing: Starts at just 83p per user per month, with a free plan available for businesses with up to five employees.

Access PeopleHR – Best for Automation

Access PeopleHR is designed to automate HR processes, reducing manual work and streamlining employee management.

Pros:

• Strong automation features.

• Customisable workflows.

• Great for managing employee records and onboarding.

Cons:

• Not as beginner-friendly as other options.

• Can get expensive for larger teams.

Pricing: Starts at around £3 per user per month.

HiBob – Best for Company Culture & Engagement

HiBob (or Bob) focuses on not just HR management but also employee engagement and company culture. It’s a great choice for businesses that want to keep their teams motivated.

Pros:

• Excellent employee engagement tools.

• Modern and visually appealing interface.

• Good integrations with payroll and project management software.

Cons:

• Higher cost than some alternatives.

• Might be too feature-heavy for very small teams.

Pricing: Starts at around £5 per user per month, with custom quotes for larger teams.

 

 

Feature Comparison – What’s Actually Worth Paying For?

Not all HR software features are created equal, and small businesses should prioritise what truly matters. Here’s a breakdown of key HR features and whether they’re worth paying for:

Must-Have Features

• Employee Database Management – Essential for keeping all staff records in one place.

• Payroll Integration – Saves time and reduces errors when processing salaries.

• Time & Attendance Tracking – Helps manage shift workers and remote employees effectively.

• Leave & Absence Management – Ensures a smooth approval process for holidays and sick leave.

• Compliance & GDPR Features – Protects sensitive employee data and ensures legal compliance.

Worth paying for if you want a smooth and legally compliant HR system.

Nice-to-Have Features

• Recruitment & Applicant Tracking – Useful if your business is actively hiring.

• Performance Management – Helps track employee progress and set goals.

• Employee Engagement Tools – Great for improving workplace morale and retention.

Consider if your business is scaling and wants to invest in culture and retention.

Premium Features (Only If You Need Them)

• AI-Powered Insights & Analytics – Advanced reporting for larger businesses.

• Custom Automation Workflows – Reduces manual HR tasks, but can be costly.

• Full Suite Integration (Payroll, Accounting, Benefits) – Ideal for growing businesses with multiple HR needs.

Only worth paying for if you need deep analytics and automation.

 

 

Next Steps to Get Going

Now that you have an understanding of the best HR software for businesses, it’s time to take action. Here’s how to get started:

Define Your Needs – Make a list of essential features your business requires. Are you looking for payroll integration? Employee performance tracking? Compliance tools?

Shortlist Your Options – Based on this guide, narrow your choices down to 2-3 software solutions that align with your budget and needs.

Take Advantage of Free Trials – Most HR software providers offer free trials. Sign up and explore the platform to see if it’s user-friendly and functional for your business.

Compare Pricing Plans – Consider both your current budget and future scalability. Look for software that offers flexibility as your business grows.

Check Customer Support – Reliable support can make a huge difference. Test how responsive the customer service team is during your trial period.

Make a Decision & Implement – Once you’ve tested the software and reviewed its features, commit to the best option and start integrating it into your HR processes.

Monitor & Adjust – After implementation, gather feedback from your team and make necessary adjustments to get the most out of your HR software.

Final Thought: The right HR software for small businesses can make your life easier, save time, and streamline essential HR tasks. Don’t rush the decision—test, compare, and choose the best fit for your business!