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Our small business HR software picks for 2023

By: RAECHEL CONOVER | Fact Checked By: JAMIE OSTROE | Updated: May 26, 2023

Staying on top of HR may not be your favorite part of running a small business, but it’s imperative to its success. When you don’t have a dedicated HR department, important tasks around employee record management, hiring, payroll, benefits, and scheduling can quickly get overwhelming. Fortunately, there are some really great (and affordable) tools out there that can help. To get you started, we’ve compiled a list of the best HR software for small businesses.

Our Top Picks

  1. BambooHR – Best for Hiring and Onboarding
  2. Gusto – Easiest Payroll Software for Small Businesses
  3. Rippling – Best for Growing Tech Companies
  4. GoCo – Best Core HR
  5. Homebase – Best for Employee Scheduling

Small business HR software reviews

We identified 51 popular small business HR systems and narrowed them down to our top five picks based on features offered, pricing transparency, customer support, and brand reputation. The companies we reviewed are well-known in the industry and specialize in serving small businesses of various sizes and industries.

Check out our methodology section for more details on how we made our selections.

bamboohr logo

BambooHR – Best for Hiring and Onboarding

BambooHR is a comprehensive HR tool that supports complex HR processes starting with hiring and onboarding. It provides an easy-to-use applicant tracking system (ATS) that connects to third-party job boards, collects and maintains employee records, and supports payroll, benefits, and time tracking. It also provides detailed analytics along with an impressive employee self-service portal and app. You can get started with BambooHR for free.

  • Strong onboarding and ATS system
  • Employee self-service options
  • Mobile app available
  • Only custom pricing is available
  • Employee scheduling is limited to time-clock and attendance

Start Free Trial Link: Visit BambooHR’s website for a free trial

BambooHR features

  • Employee records: BambooHR’s employee database software eliminates double entries and provides employee self-service so they can update their records as needed.
  • Hiring: You’ll get ATS software with onboarding and easy integration with third-party job boards.
  • Benefits administration: Employees can elect or waive benefits with ease.
  • Payroll: Ensures employees are paid on time and maintains tax compliance.
  • Employee scheduling: BambooHR does not currently provide employee scheduling but it does offer mobile time-clock, attendance management, and PTO approval.

What markets does BambooHR serve?

BambooHR is an excellent tool for small businesses looking to scale up their hiring processes. Yes, it does other HR functions well, but the standout features are ATS, onboarding, and employee self-service. These all work together to make a great first impression that goes a long way in streamlining and organizing the hiring process for success and employee satisfaction well into the future.

Read our full BambooHR Review.

gusto logo

Gusto – Easiest Payroll Software for Small Businesses

Gusto offers many features to make HR more manageable. Payroll stands out as the number one offering. The best HR and payroll software for small businesses runs payroll and automates it so employees are always paid on time. It also files local, state, and federal payroll taxes at the end of each fiscal year – something other software charges extra for.

  • Full-service payroll
  • Automated payroll runs
  • Compliant tax filings
  • No international payroll
  • Limited customer service

Get Started Visit Gusto’s website.

Gusto features

  • Employee records: available in the employee onboarding software.
  • Hiring: creates job posts, offer letters, onboarding workflows, and software that stores employee records.
  • Benefits administration: offers a wide range of benefit options and packages.
  • Payroll:runs and automates payroll and files payroll taxes.
  • Employee scheduling: time tracking and time off request management.

What markets does Gusto serve?

While Gusto is available for any size business, small businesses are where it provides the most help. By offering a comprehensive payroll package with auto payments and automatic filing that would be higher priced by competitors, small businesses get access to a truly easy-to-use payroll system that ensures compliance and accurate payroll runs.

Read our full Gusto Review.

rippling logo

Rippling – Best for Growing Tech Companies

Rippling offers an IT cloud and an HR cloud, and they work seamlessly together. On the HR side, Rippling offers core HR support for small businesses. This includes onboarding, talent management, employee records, payroll (and global payroll), benefits, time tracking, learning management, PEO services, and performance management. Rippling integrates with over 500 programs and even manages the assignment of employee computers and software.

  • Integrates with the IT cloud
  • Provides global payroll services
  • Integrates with over 500 programs
  • No free trial

Rippling features

  • Employee records: manage all employee records in the HR cloud.
  • Hiring: talent management and onboarding services.
  • Benefits administration: select and set up benefits packages with your broker or let Rippling assign a broker. Employees can then elect or waive benefits through the platform.
  • Payroll: U.S. and global payroll.
  • Employee scheduling: automated time and attendance tracking.

What markets does Rippling serve?

With its integrated HR cloud and IT cloud, Rippling is great for small tech companies that need global payroll support. Rippling can serve small businesses is any industry, but it specifically highlights industries like tech, retail, nonprofits, restaurants, healthcare, manufacturing, and more on its website.

Read our full Rippling Review.

goco logo

GoCo – Best Core HR

Flexibility is the name of the game for GoCo. It’s one of the best HR cloud software we found and was created to provide core HR needs, like employee record management called MagicDocs, which integrates with all your current or new HR processes. Other areas of support include performance management, onboarding, benefits, and payroll. And like employee records, these will seamlessly work with your other systems already in place, so you don’t need to ditch processes that are already working for you.

  • Provides core HR services
  • Works with your current processes
  • Integrates with tools across all business areas
  • Limited hiring support
  • No employee scheduling, just time tracking and manager approvals

GoCo features

  • Employee records: MagicDocs technology allows you to collect and insert custom form fields for records and reporting.
  • Hiring: onboarding workflows.
  • Benefits administration: allows employees to opt-in through self-service.
  • Payroll: provides full payroll or integrates with your current payroll system.
  • Employee scheduling: limited to time tracking and approvals.

What markets does GoCo serve?

GoCo is best for small businesses looking to modernize their HR practices while retaining their current systems. By providing core HR support and offering others as add-ons, this service is flexible and can easily integrate with existing processes.

homebase logo

Homebase – Best for Employee Scheduling

Homebase is a great all-in-one HR solution for small businesses with a strong focus on work schedules – like a busy local restaurant. At the entry level is a free HR system for small businesses that includes scheduling, timesheets, time clocks, availability tracking, and employee communications. Other available features include talent management and applicant tracking, hiring and onboarding, and payroll. The software also offers solutions for compliance and measuring employee happiness.

  • Robust free plan
  • Full employee scheduling capabilities
  • Focus on employee happiness and compliance
  • No benefits administration
  • Free plan available for one location only

Homebase features

  • Employee records: store and maintain basic employee records as part of the compliance tools.
  • Hiring: recruit, manage talent, and onboard new hires.
  • Benefits administration: benefits are not currently offered through Homebase.
  • Payroll: not included in the free plan, but as an add-on, you can run unlimited payrolls for employees and contractors with automatic tax payments and filing.
  • Employee scheduling: the only plan on our list that offers full employee scheduling that can be directly communicated with staff, as well as time tracking, PTO, and shift swapping.

What markets does Homebase serve?

Homebase is an excellent option for small businesses that juggle a revolving schedule with varied and significant staffing needs. It has a robust free plan that provides all the necessary tools to automate employee scheduling and every process associated with this large HR task.

Read our full Homebase Review.

Compare the best HR Software for small businesses side-by-side

Software Name Why we picked It Starting price for cheapest plan Highlights
BambooHR Best for ATS and Employee Self-Service Request a quote Offers a robust ATS and employee self-service platform
Gusto Best for Simplifying Payroll $40 per month + $6 per employee Big focus on payroll, payroll taxes, and compliance
Rippling Best for Tech Companies $8 per month per user Automates employee benefits enrollment and offers U.S. and global payroll services
GoCo Best for Core HR $5 per month per user Well-rounded core HR services, as well as add-ons that integrate with existing programs
Homebase Best for Employee Scheduling $20 per month per location Offers time tracking, scheduling, time off, and PTO management.

What is HR Software?

HR software is a broad term used to describe platforms that help you manage day-to-day human resource tasks like hiring, onboarding, payroll, benefits, and performance management. While a complete human resource information system (HRIS) is ideal for large companies with lots of employees, most small businesses don’t have the budget (or need) to support a system like that. Enter small business HR software. It helps companies to manage their HR tasks when there is no HR department or even a designated HR manager.

Using a single interface, these systems provide helpful tools, such as employee record management, payroll, hiring and onboarding, benefits administration, and employee scheduling, that help small businesses automate and streamline processes, stay compliant, and retain top talent.

You don’t have to buy into a full plan. With these HR solutions for small businesses, you get the core HR services you need and then pick and choose additional software that will benefit your small business the most.

Why do small businesses need human resource management software?

Small businesses need HR software for many reasons. Often there isn’t a large HR department or even one person dedicated to an HR role. Instead, the business owner or a general manager oversees HR, and as you can imagine, needs a lot of help doing it. HR software is best when it automates specific HR processes and tasks and leaves more time for other aspects of your business that need attention.

The following are some examples of where HR software can support a small business:

  • Record keepingGoCo is an excellent core HR option that tracks and stores your documents along with many other important core HR tasks.
  • Payroll and complianceGusto ensures payroll compliance by managing local, state, and federal payroll regulations.
  • strong>Employee self-service – the more employees can do for themselves, the easier your job is. BambooHR offers a robust employee app that allows employees to maintain their own records, so you don’t have to.
  • BenefitsM – health insurance and 401k, among other benefits, can be a full-time job. But a program like Rippling brings it all on one platform, prompts employees to manage their benefits, and automates tasks like deductions.
  • Scheduling – creating an employee schedule is like doing a jigsaw puzzle over and over again, but programs like Homebase make it easier with things like automated scheduling, timesheet and time-off management, and payroll integration.

What are the different types of HR tools for small businesses?

At the very least, small businesses need core HR solutions that support the central functions of even the smallest HR department. This software should, first and foremost, keep employee records since all HR functions are based on this. This primary function will help you automate hiring, training, payroll, and benefits processes.

Two small business HR systems stand out on our list as providing the core HR benefits: BambooHR and GoCo.

Both companies offer employee record management at all levels of their plans. BambooHR also includes reporting and analytics, employee self-service, and time off management, while GoCo includes hiring, onboarding, and employee self-service along with their MagicDocs in all plan levels.

With both of these small business HR software vendors, you can add on different levels of support such as payroll, performance management, and payroll services.

Benefits of HR software in small business

Aside from the obvious, like saving time and streamlining operations, small businesses can benefit from using small business HR software in many ways:

  1. Maintain compliance: one significant benefit of using small business HR software is that it helps you stay compliant. According to the IRS, using third-party payroll software can help ensure that your tax filing deadlines and deposit requirements are met.
  2. Improve image: as you recruit, hire, and onboard new employees, they are getting a front-row seat to what it’s like working for your small business. A company that uses HR software to streamline and organize this process starts the employee relationship off right and leaves them with an excellent first impression of your company. It also improves your image with your current employees by showing them that you are invested in making their tasks easier, such as completing timecards and time-off requests.
  3. Retain talent: hiring a new employee isn’t cheap. New data from the Society for Human Resource Management (SHRM) indicates that the average cost per hire is $4,700, but many companies estimate that cost is much more. No wonder small businesses would want to invest money into retaining their employees! HR solutions for small businesses such as BambooHR and Gusto that include recruiting, onboarding, and performance management do just that.

How much does small business HR software cost?

When it comes to HR software pricing, many companies are a little tongue-in-cheek, and you’ll need to request a quote from Rippling, GoCo, and BambooHR. Homebase and Gusto are entirely transparent in their pricing, and both offer a free HR system for small businesses.

Most HR software companies charge a monthly base price in addition to a monthly fee per location, per employee, or both. Gusto offers a Contractor Only plan for businesses that work with a lot of contractors. This plan doesn’t have an overhead fee and just charges per contractor.

HR Software Pricing
Gusto Homebase Rippling GoCo
Starting at $40/month Starting at $20/month Starting at $8/month Starting at $5/month
Plus $6 per person/month Per location Per user Per user

Small business HR software FAQ

What key features are included in HR software?

The key features to look for in HR software for small businesses are document or record-keeping capabilities, hiring tools for tracking applicants and onboarding new hires, benefits management, employee time-tracking, scheduling tools, payroll, and performance management.

Does a small business need HR software?

It could be argued that small businesses need HR software more than larger businesses. Why? Because in a small business, there often isn’t a dedicated HR team, and one person – usually the owner or a general manager – is assigned the huge task of managing all HR for the business. HR software for small businesses can go a long way to help fill this gap.

What do small businesses need from HR software?

Small businesses will benefit from any automation and employee record-keeping that HR software can provide to make processes easier and less time-consuming. The HR software companies on our list offer core HR services and a host of other features, many of which can be added to any plan, so it’s important to assess your unique needs and select a plan that offers the features and add-ons that you need. Other features to consider include:

  • Applicant tracking & job posting
  • Onboarding software
  • Benefits management
  • Employee scheduling software
  • Time tracking
  • Time-off management
  • Learning management systems
  • Performance management
  • Payroll software

How we chose the best HR software for small businesses

We started with a list of 51 of the best HR software for small businesses on the market and identified 15 popular vendors with significant online search volume to narrow our focus. From there, we chose five vendors that stand out for the features they offer, the markets they serve, their brand reputation, and available customer support options.

We collect information from vendors and verify it through:

  • Interviews
  • Video and live demos
  • Vendor and parent company websites

We scored companies on a scale of 1 (poor) to 5 (excellent) across the following criteria, each worth 25% of our total score:

  • Variety of features: We looked for small business HR software that offered employee record keeping, hiring tools, payroll, employee scheduling, and benefits management. A company scores higher when they offer all of these features, as it means a more streamlined experience and more opportunities for automation for small businesses and those who manage their HR.
  • Pricing and transparency: We not only compare actual pricing and plans for each vendor but judge companies on whether or not this information is readily available online – or if you have to go through a complex process to get it. Companies with transparent pricing and free trials get a better score here.
  • Onboarding and support: We look for companies that offer multiple types of ongoing customer support and a self-service knowledge base.
  • Brand reputation: We gathered data from customer reviews and ratings published on trustworthy third-party review sites to get a sense of each vendor’s reputation with its customers.