Best HR Software for Small Businesses (2023)

The best HR software, HRMS, HRIS, hand-picked for small businesses, along with benefits, pitfalls, pricing, and more.

Rodrigo Vázquez Mellado
HR and B2B software analyst & advisor, tech writer, musician

Contributing Experts

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The Top Human Resource Software

Hand picked by our HR Technology experts after product testing, user research, and much debate - enjoy!

BambooHR is one of the top names in HR software. Although they accommodate a lot of big companies, they are flexible when it comes to pricing and can definitely work for small businesses.
Zenefits is a great option for small businesses looking for a robust, all-in-one HR, payroll, and benefits management system without breaking the bank.
Bob is a global platform that can streamline pretty much everything an HR department needs to do, in a highly customizable manner.
As the all-in-one platform for deskless employees, Connecteam covers communication, scheduling, task management, core HR, and more. It works to connect unanchored workers at small and large companies alike with an extremely easy-to-use mobile app.
JazzHR is laser-focused on the unique recruitment needs of small and medium-sized businesses. They’re one of the few vendors to get this right, with a competitive price, a great product, and excellent customer support.
Zoho People is a complete solution for HR teams with very affordable or even free plans. It features modules for core human resources activities like time and attendance tracking, performance management, and training.
Freshteam is an HR suite that’s already used by over 5,000 customers, well-regarded by, and built for, small, mid-sized, and big companies alike.
Eddy is an all-in-one HR and payroll platform with a simple and intuitive UI focusing on local businesses with deskless workers, mainly in the US, but also available sans the payroll module in other parts of the world.
With a beautiful interface, Gusto is a tool for onboarding, payroll, and benefits management.
ClearCompany are the makers of a wide array of HR solutions. They’re great for business owners that want to do most of their human resource management through a single vendor.
GoCo provides payroll and benefits administration, performance management, hiring, onboarding, documentation, time tracking, and HR support from a centralized dashboard. It’s also a versatile solution that seamlessly integrates with some of the most popular apps and services.
Factorial is an all-in-one HR platform used by thousands of teams across the globe. They have always placed a considerable emphasis on being SMB-friendly, evidenced in their pricing and flexibility, and comprehensive feature list.

Introduction to HR Software for Small Businesses

Here's something that doesn't get said enough: some great companies are solely-focused on making the best HR software for small businesses. That's because being a small business doesn’t mean that you can’t have some of the best HR tech available. Among the top vendors in the space, there are those that have plans or solutions to fit the needs of smaller operations.

So, if reading the words “custom enterprise pricing” on a vendor’s website entices you to close the page, and you dread lengthy implementations that would require complex IT intervention, this is the guide for you. Through hours of research, we’ve rounded up the best HR software for small businesses.

Among these vendors, you’ll find the HRIS essential features that you’d like to cover with a single platform, such as applicant tracking, org charts, time and attendance, benefits administration, performance reviews, and much more.

Our criteria: How we chose the best vendors

We take research seriously. To make sure we’re offering our readers the very best solutions in a given software category, we are methodical, rigorous, and expansive in our research. We consult with HR professionals, vendors, and industry experts. We cut through the noise to bring you a carefully curated list of vendors, along with other essential information, to help you find the right software platform for your business. 

Here’s how we chose who makes the cut: 

Product: We believe in gaining a comprehensive understanding of a product before we recommend it, so we start by getting to know the software. Whenever possible, we meet with a senior executive (CEO or Head of Product) for a demo and Q&A. We also test the product ourselves to make sure it has a solid UI, intuitive workflows, and the features to make it a best-in-class offering. 

User feedback: We go straight to the source and compile feedback on user experience. Real-world input supports our commitment to diligence in our software evaluation methods and the products we recommend. Keeping up with the everyday experience of HR pros also puts new vendors on our radar, and it keeps us close to our community so we can better connect the right products to the right people.

Financial metrics: We are certified finance nerds, so we use all the data we can get our hands on to make selections for our guides. We comb through data for concrete statistics like retention rates, growth, profitability, and scalability. We evaluate the bottom line of each product because we know making a software purchase can put your reputation on the line. 

Best for a use case: Software is never a one-size-fits-all product. Sometimes the best solution is free or cheap. Other times it’s the one that is best for global companies or the one that’s sized right for early-stage startups. Keeping this in mind, we include solutions across the spectrum so our readers can find the best fit for their unique needs.

Here's more detail if you want to read more about how we research vendors. Our dedicated staff writers rely on hard data, impartial experts, and user feedback to ensure our reviews are helpful, truthful, and hopefully a pleasure to read!

Top Human Resource Software

We track thousands of HRTech solutions, these are the best HR Software vendors for small businesses per our research and expert council as of 2023.

BambooHR - one of the best HR software for small businesses

BambooHR

Review:

Formerly a small business themselves, BambooHR try to offer a custom plan that will fit your business. Their HR platform spans across the employee lifecycle as they also have recruiting and performance management as optional add-ons to the core HRMS functionality.

Their HR Essentials plan is available as a small business package. They also boast numerous amenities like an app marketplace of HR/recruiting vendors that integrate with their system, an HR glossary, and host HR events on occasion.

BambooHR

Stats:

  • Over 20,000 active client organizations
  • Millions of employees active on their system
  • 45,000+ new hires onboarded per month, on average
  • Over 20,000 active client organizations
  • Millions of employees active on their system
  • 45,000+ new hires onboarded per month, on average

BambooHR

Pricing:

Pricing is not disclosed upfront, but they do offer a free trial of their all-in-one software and then go out of their way to find a version that will suit you. Before they come up with a personalized quote that will align with your budget, however, they are also likely to extend your free trial upon request or even give you a free demo of the advanced features.

Pricing is not disclosed upfront, but they do offer a free trial of their all-in-one software and then go out of their way to find a version that will suit you. Before they come up with a personalized quote that will align with your budget, however, they are also likely to extend your free trial upon request or even give you a free demo of the advanced features.

Best For

BambooHR is a good fit for companies looking for a very customizable HR product, with pricing that reflects their needs. It’s also popular among teams that are partially or even fully remote.

ClearCompany

Review:

ClearCompany is another HRMS company that goes across the entire employee lifecycle from recruiting and applicant tracking through performance. They’re a great solution for SMBs looking for a talent management solution with very good customer service. Another noteworthy thing about ClearCompany is a feature in their ATS that identifies and sources the best available talent for your company based on its top performers.

ClearCompany

Stats:

  • 99% retention rate
  • 640,000 total users
  • 96% employee approval rating 
  • 2,000+ customers
  • In business for 15 years

ClearCompany

Pricing:

Custom subscription-based pricing is available upon request of a demo or free trial. No credit card is required for the free trial.

Best For:

Clients in every industry and all sorts of company sizes.

Connecteam

Review:

Connecteam is the HR app for companies with a high percentage of deskless workers to manage. If you need a simple, robust, yet intuitive tool that lets you take care of HR processes for low-tech employees who don’t have a computer, this one is certainly worth checking out.

From the Connecteam app, managers can handle administrative work, like staff scheduling, task management, attendance management, time keeping, training, onboarding, and much more. Non-desk workers then interact with all of this via a mobile app, where they need nothing but a phone number to create an account.

Connecteam

Stats:

  • Trusted by over 20,000 companies worldwide
  • 500,000+ daily active users
  • Used in over 79 countries
  • 200+ industries served

Connecteam

Pricing:

Connecteam’s pricing can range from free-for-life to up to $159 per month. Final numbers will vary depending on the number of users and modules you choose. To give you an idea, here’s an overview of each plan within the operations module:

FreeBasicAdvancedExpert
$0/mo$39/mo$79/mo$159/mo
Time clock, job scheduling, checklists and forms, task managementAll features from the previous plan + time tracking, payroll, shift info, and more.All features from the previous plan + smart groups, geofence, recurring tasks, and more.All features from the previous plan + multi-branch management, live GPS tracking, process automation, and more.

Connecteam’s payment structure is fixed for the first 50 employees you add. Once you add more, there would be an extra payment of $1.5 per additional employee per month.

These pricing options are yearly, where you save 18%, but you can also opt for month-to-month payments. They also offer enterprise pricing with more features and a personal account manager. Each paid plan also has the option of a 14-day free trial.

Best For:

Connecteam is used by SMBs with up to 200 employees, as well as Mid-market business with up to 3,000 team members. What all these clients of theirs have in common is that they want a workforce management tool for their low-tech, deskless employees, without needing IT intervention. Industries served span from healthcare, manufacturing, and security to dog walkers and fitness services.

Freshteam

Review:

This product from Freshworks is an all-in-one talent management solution specifically targeted for growing businesses but useful for all sorts of operations. Freshteam can handle your human resources experience from job postings and applicant tracking all the way to core HR features like an employee directory, benefits management, and many administrative tasks.

Freshteam

Stats:

Freshteam

Pricing:

FreeGrowthProEnterprise
Free for up to 50 employees$1.20 user/month + $71 monthly platform fee$2.40 user/month + $119 monthly platform fee$4.80 user/month + $203 monthly platform fee

These prices are altered if you choose to pay annually, since you essentially get 2 months free. There are no cancellation fees.

Best For:

All kinds of businesses can benefit from Freshteam, but it’s ideal for teams that want to handle everything from a job posting to leave management in the same place at a competitive price.

Bob

Review:

Bob, or HiBob, has made it its philosophy to always put the employee first. You can see that ethos embodied in how easy the product is to use and the various ways this solution engages employees to better understand and cultivate culture. Bob is a great fit for forward-thinking HR departments that need tools like onboarding, time-tracking, payroll reports, time off management, surveys, benefits, and much more.

Bob

Stats:

  • Unlimited customizable flows 
  • Over 13 modules 
  • Four packages to cover most needs 
  • 44 reviews with a 4.6/5 average 
  • Founded in 2016

Bob

Pricing:

Bob offers custom pricing. They have flexible plans for growing companies and will work with you to offer the best possible cost.

Best For:

Companies with fast-growing teams that want to manage all or most HR processes in a single platform, in a modern way.

Gusto

Review:

Gusto was previously known as ZenPayroll, and originally started as the easiest way to run payroll for smaller companies. It has since added benefits administration as well as other features that are commonly found in your HRIS (onboarding, org charts, etc). Gusto continues to scale their customer base rapidly and has now acquired over 100,000 customers.

Gusto

Stats:

  • Used by over 100,000 small businesses
  • Three out of four customers say Gusto makes compliance easier
  • 90% of customers found switching to Gusto to be simple

Gusto

Pricing:

Gusto’s Core plan is $6 per month per person, plus a $39 monthly base fee. It includes payroll, employee benefits, employee self-service portal, workers comp administration, onboarding tools, and much more. If you need to upgrade, their Complete plan is $12 per user per month. 

Gusto Concierge is also $12 per user per month, but the monthly base fee is $149. Lastly, if you haven’t hired W-2 employees yet, they have a Contractor plan that’s $6 user/month with no monthly base fee.

Best For:

Gusto is perfect for small businesses that need simple benefits administration. It's easy to scale up their plans as your organization continues to grow.

Zoho People

Review:

As a software company that makes all sorts of business applications, it makes total sense that they’d offer a very complete cloud-based HRMS. Zoho People has an impressive list of features on each plan, so it’s hard to imagine HR teams at SMBs not finding everything they need here.

Zoho People

Stats:

  • Over 40 integrated applications

Zoho People

Pricing:

Zoho People is free for up to 5 users. After that, it has 4 plans that are priced as follows:

  • Essential HR: $1.25/user/month billed annually
  • Professional: $2/user/month billed annually
  • Premium: $3/user/month billed annually
  • Enterprise: $4.5/user/month billed annually

Best For:

Zoho People has plans for many sorts of organizations, even offering custom pricing for those with more than 500 employees. The product is affordable enough to be used by small businesses and robust enough to handle the complex and scalable needs of large companies. Even the more expensive Zoho People plans can check all the HRMS boxes without breaking the bank.

GoCo

Review:

GoCo functions as an all-in-one solution to your HR, payroll, and compliance needs. Not only will your team save time by accessing all of these activities in one convenient location, but their direct line to HR ensures that their voices are being heard.

One of GoCo’s key features is the ability to automate certain tasks, like onboarding and even pre-boarding. This ensures that your new hires have everything needed to get started while freeing up your managers and supervisors to look after their daily responsibilities.

GoCo

Stats:

  • Synstelien Community Services, a provider of residential services for adults with various disabilities, currently relies on GoCo to provide streamlined HR functionality on behalf of 75 - 80 employees.
  • Hammer Down, a provider of various services to oil fields in Texas, used GoCo to reduce their onboarding process from several days to 10 minutes or less.
  • Search Wizards, a specialized recruitment agency for Fortune 500 and Fortune 10 companies, uses GoCo to distribute 300 - 400 W-2 forms to clients in 27 different states.
  • TextBroker, an online content provider, has cut their onboarding time by 50% with GoCo.

GoCo

Pricing:

GoCo pricing starts at $5 monthly for each employee. Custom pricing plans are available.

Best For:

GoCo would make a great addition to the tech stacks of small to medium-sized businesses (SMBs) looking for a budget-friendly yet comprehensive HR software.

Factorial HR

Review:

Factorial is a great HR software solution for small and medium-sized businesses. Their offering gives human resources teams their time back through managing employee onboarding, time tracking, PTO, org charts, payroll, talent acquisition, and much more. 

We also like that they place a good deal of importance on data security. With Factorial, all database information is encrypted and GDPR-compliant. They also use a Single Sign-On system and regularly perform vulnerability diagnostics.

Factorial HR

Stats:

  • Used by 6,600+ companies in over 65 countries.

Factorial HR

Pricing:

The Factorial Core HR platform starts at $60 per year, then it's $4 per additional user. There is a 14-day free trial and custom enterprise pricing is available for bigger teams. Their ATS is available as an add-on, starting at $39 per month for 10 job offers. Then you can upgrade to Pro, with unlimited job offers, for $119 per month (all if billed yearly).

Best For:

Small and medium-sized businesses with many HR processes to streamline. It's specially suitable for organizations with a remote workforce and operations in Europe, the US, or Latin America.

Eddy

Review:

Eddy helps HR teams in streamlining administrative tasks such as onboarding, document storage and electronic signatures, employee directory and employee profiles, training tracking, PTO tracking, and time tracking. Notably, Eddy is especially targeted at deskless companies.

Hence, Eddy is particularly popular with small and local businesses in industries such as healthcare, home services, construction, landscape, plumbing, restaurants, food franchises in the US. Most of their clients are independently-owned and true mom & pop operations.

Eddy

Stats:

Eddy

Pricing:

With a base fee of $49 per month, Eddy starts at $8 per employee per month. Additional modules such as payroll and a full-on applicant tracking system can be added. For example, their ATS is 99/month if combined with their core HRIS or payroll or $199/month if standalone.

Best For:

Eddy is a great fit for small businesses in the US with a high percentage of deskless workers who need help in improving employee experience and streamlining and automating administrative HR tasks. Their People and Hire modules can also work well for such businesses outside the US, as long as they use another tool for their payroll processing.

JazzHR

Review:

JazzHR is built and priced for small businesses (5-500 employees). They’re looking to empower SMBs on the importance of digitizing the hiring process. While they’re much more than an ATS, their capabilities mostly fall within the recruiting process. However, they’ve garnered over 250 partnerships with industry-leading technology and service providers. To create a seamless HR experience, JazzHR can be a key component of your tech stack.

JazzHR

Stats:

  • 98% customer retention
  • 84 employees

Also, according to their case studies, they’ve managed to secure several wins for their customers, such as: 

  • Reduce annual hiring costs by 90%
  • Increase candidate volume by 500%
  • Save 10-15 hours of work per hire, at a minimum
  • 400% increase in applications

JazzHR

Pricing:

JazzHR offers transparent pricing through three plans:

HeroPlusPro
$49 per month (paid annually)$229 per month (paid annually)$339 per month (paid annually)
Unlimited users, 3 open jobsUnlimited users, unlimited open jobs, ATS, Interviews and AssessmentsEverything from Plus, with Offers and eSignatures, reporting, and all-access support.

Best For:

JazzHR is specifically built for teams at organizations with 5 to 500 employees, regardless of industry or recruiting maturity. Product users range from the HR expert to professionals with little to no prior experience in the space.

Zenefits

Review:

Onboarding, offboarding, benefits, payroll, performance reviews - Zenefits has a broad set of solutions for most of what we typically think of as the core HR services and tasks. Notably, Zenefits is specially built for smaller organizations with an average customer size of just under 50 employees.

Zenefits

Stats:

  • Trusted by 11k businesses
  • Used by 400k employees
  • Integrates with 50+ partners

Zenefits

Pricing:

Zenefits starts with the Essentials plan at $8 per month per employee. This includes all the Core HR modules, Time & Scheduling, Integrations, and the mobile app. Those features are all included, plus other modules, as the plans go up in price. They also offer independent add-ons like payroll software for free, advisory services at $8 per month per employee, and benefits admin using your own broker at $5 per user per month.

Enterprise pricing is available upon request.

Best For:

Smaller teams that want to save time by streamlining their HR services with an intuitive platform that lets them pay and tweak as they go.

FAQs on buying HR software for a small business

What is the best Human Resources software for small business? 

The best HR software for a small business will be that which solves some of the organization’s pain points through features like employee self-service and onboarding automation, while fitting into the desired budget. Some of the best vendors of HR solutions for small teams are Freshteam, JazzHR, FactorialHR, and Zoho People. 

Why does a small business need HR software? 

Small businesses can use HR technology to save time, improve the employee experience, employee performance, and hiring process. 

What does HRIS stand for?

HRIS stands for Human Resource Information System. 

What does HCM stand for?

HCM stands for Human Capital Management.

Pitfalls of buying HR software for a small business

Most small businesses take a while to recognize that they need HR software. They’ll use spreadsheets for a people directory and handle tasks like running payroll and setting up benefits themselves. This might make sense until it all gets impossible to manage. This may be true for a majority of small organizations, especially when you consider that 56% of small businesses have an HR department of only one person, according to research from BerniePortal (an HRIS provider).

So if you’re now sold on the idea of getting some form of HR software, congratulations! The next step, however, is to avoid the common pitfalls that come when choosing vendors. Making the wrong decision could mean that the headaches you’re trying to avoid with this purchase don’t all go away, so it’s important to lookout for the following mistakes: 

  • Choosing a vendor with no employee self-service: Since the whole idea is to save time, your HR tool should let people alter their own employee records. This can be especially helpful for freeing up HR’s time if it’s done as an automated workflow during onboarding. 
  • Choosing a vendor that lacks automation: Speaking of automated workflows, it’s also recommended that your vendor has this capability in at least some of their features. Whether it’s running payroll, onboarding, or signing documents, there are a lot of menial tasks that can be done automatically.
  • Foregoing the necessary integrations: Further, if the decision process is rushed, sometimes you could end up buying a tool only to find out later that it doesn’t integrate with a key component of your tech stack. If this is the case, it will surely lead to difficulty down the road, since a good deal of the data transfer between tools has to be done manually. 
  • Rushing the implementation: With cloud-based HR software for small businesses, the most common situation is for implementation to be a self-service process. However, this is where rushing things can send you down the wrong path. If the data is transferred or inputted incorrectly, it will lead to mistakes like giving admin access to the wrong team member or having the wrong amount for someone’s payroll. To avoid this, it’s recommended that you choose a vendor with good customer success resources in place and that you actively make use of them.

Benefits and ROI of HR software for a small business

While reading this, there might still be a small part of you that says “I’m a small business, do I really need a fancy HR system?”. Truth be told, getting HR right is one of the milestones that you need to achieve if you want to grow your business. It’s also paramount to keep your workforce happy, since it’s what you’ll later use to improve on metrics like employee satisfaction rate, engagement, and overall, the much turnover (which can be quite costly). 

So, speaking of the benefits of buying HR software, we’ve already covered how it saves time for HR managers by streamlining and automating certain processes. However, what should also be mentioned is what these managers will be able to do with that spare time. An HR person that has paperwork and recruiting fairly under control can then focus his or her attention on human capital management, improving the overall employee experience at the company, as well as finding ways to foster the company’s culture and develop employees through training programs.

How are most HR management solutions for small businesses priced?

With most of the vendors listed on this roundup, pricing is on a per user per month basis. Some of them will have an additional monthly base fee, and the majority of them will offer custom pricing based on your business needs. Some of them also offer independently-priced add-ons, which is great for small businesses that want to pay only for the features they’ll actually use. 

Now, if you’d like to get a rough idea of what you can expect to budget depending on your organization’s size, we’ve put together the following estimations based on our own experience and conversations our HR expert council:

Number of employeesEstimated annual cost
100$12,000
500$48,000
1,000$72,000

We're also crowdsourcing data on HRIS pricing through a survey that's anonymous and takes only two minutes. Anyone who helps out the community by filling it out will get access to the entire data set.

Key HR software features for small businesses

If this is your first HR tech purchase, which features should you be prioritizing? While that depends mostly on your particular situation and business needs, we could say that the top HR tech vendors offer some, if not all, of the following: 

  • Employee management: The Core HR functions for any tool should include an employee directory, perhaps an org chart, and the chance for employees to alter their records themselves. As mentioned above, this is key in order to reduce time and make sure everything about an employee’s relationship with the company is up to date, 
  • Onboarding & Documents: Many of these tools come with a basic Applicant Tracking System that can do everything from sourcing and managing job postings and interviews all the way to onboarding a new hire. Some of them can also take care of the necessary documentation through automated workflows. You don’t need to be chasing people for their signature if they can access, sign, and upload all the necessary documents themselves through the platform. 
  • Employee Performance: An HRMS can also help with defining goals for an employee, both individual and collaborative, and keeping track of it. The same tool could allow for feedback to be recollected and consulted by employees and managers when it’s time for performance reviews. 
  • Time Management: If we’re talking about a plan with HR tech essentials, this should include some form of time management, whether it’s for scheduling, time and attendance tracking, processing leave requests, or at the very least syncing with one of the main calendar apps. 
  • Benefits Administration: While this is tricky because it can vary a lot from one region or country to another, a vendor should get bonus points if they have a module for you to manage your employee’s benefits as well. 

Some other features that you should consider include:

  • Social recruiting
  • Sourcing
  • Reporting & Analytics 
  • A good mobile app (that’s for both Android & iOS)

As a final note on features, if the vendors you’re looking at happen to not have one of these, make sure that they at least integrate with some tools that do. You should also consider whether those tools fit your budget or not.

Questions to keep in mind when demoing HR software for small companies

Moving on, while most of the top HR software solutions for small businesses like yours offer a free trial or an instant self-service demo, it’s likely that some of them will also have you schedule a live demo with one of their reps. If this is the case with the vendors you’ve narrowed down, it’s really important to come prepared with questions. 

Just because you’re a small business, doesn’t mean that you should be reluctant to control the demo. These solutions are specifically designed for businesses like yours, so it’s better for everyone involved if you can articulate your needs and the use cases you care the most about. 

To get you started with your demo prep, here are some sample questions that you can bring to the demo. You can also download our free excel organizer to make notes on each vendor and compare them later. 

  • How will this solution fit into the rest of my tech stack and therefore what integrations do I need?
  • How will others in the organization use this solution?
  • What are the key features I want to ask about?
  • How can this tool improve the experience of our applicants? 
  • What are the things that would make me or my coworkers nervous about switching our current processes to this platform? 
  • How is employee data kept safe if trusted to this vendor? 
  • What conclusions can I start to make about the quality of customer support? Is there a help center? Are the support articles clear and easy to read?

Last advice on buying HR software if you’re a small business

Now you’ll probably want to pick 2-3 vendors and either start free trials or book demos with them. Before you do that, however, our last piece of advice, as with any software buy within an organization, would be to make sure every stakeholder is aligned with the decision. 

Even if it’s easier to get everyone onboard with an X or Y solution and think that it’s the right HR software, you should also consider the future of the business. Will this solution still be able to handle your organization’s needs in two years? How about 5 years? 

Most of the vendors selected here are quite scalable, so even if you’re starting with the most basic plan, or even the free one, there is a decent chance that that vendor will be able to stay with you and your business, if all goes well, for many productive years.

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