As your business grows, HR becomes more of a priority. Whether you’re hiring your first employee or expanding your headcount quickly, it’s extremely important you have the right HR processes in place.
One of the ways to do that is by having the best HR software for your small business. HR software (sometimes called HRM software) can help you manage and automate many of the processes involved in hiring and retaining employees – and make sure you’re getting the best from them.
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There’s a huge number of HR software options available, but they can vary in quality significantly. Here we’ve rounded up the best free and paid-for HR software for small businesses in the UK, and take a look at some of the key things you should consider when making your choice.
What do I need from HR software?
There’s a huge range of different HR software options available. Some are complete platforms covering most (or all) of your HR tasks, while others specialise in specific areas.
It pays to get your HR processes in good shape at the earliest possible opportunity. To help you do that, think carefully about what you need from your HR software. Some ‘core’ requirements that you’re likely to need include:
- Record-keeping, some of which is a legal requirement
- Administering benefits
- Attendance tracking and arranging leave
But many of the HR software options listed in this article are capable of much more than these core tasks. Depending on the nature of your business, you might also consider platforms that offer additional features such as:
- Hiring and onboarding processes
- Training delivery
- Internal comms, for example through a dedicated ‘intranet’ system
- Employee self-service, allowing staff to manage aspects of the process themselves such as benefits choices or personal detail updates
- Rich reports, for example showing attendance patterns or employee churn rates
Price is likely to be another key consideration. In this article we’ve chosen HR software specifically pitched at small and medium-sized businesses, and the costs should reflect that. Remember that while most are charged on a subscription basis, some require a one-time licence purchase.
Cloud HR software – is it right for me?
Many business processes are moving into the cloud. This means that your information and the system itself are stored on third party servers, rather than on the computers physically in your offices. There are many advantages to this – you can access the system from anywhere (and some small business HR packages now offer mobile access), you don’t need to worry about security or backups, and you don’t need to invest in dedicated hardware.
Accounting and bookkeeping software is increasingly cloud-based, led by popular names such as Xero. Many payroll systems are also in the cloud. You can see some of those options in our round-up of the best payroll software for UK small businesses.
Despite this, some businesses still prefer to have their HR and other processes kept solely on systems completely under their control. This is particularly common in firms for which security is particularly critical, for example those in financial services or health.
While the cloud is increasingly popular for many types of software, if your business relies on high levels of privacy and security, you should evaluate the options particularly carefully.
5 best HR software choices for small businesses
Whether you’re taking on your first employees or growing fast, your company will have its own unique requirements and you should research your options thoroughly. That said, there are some standouts among the small business HR software available in the UK. Here are five of the best.
Zoho People is part of the Zoho ecosystem – a growing range of cloud-based apps that can help with almost every aspect of managing your business. It has a simple, visually pleasing interface, and as with every Zoho offering, it’s easy to pick up with no training or expert knowledge. It’s also free for small businesses. Read more.
CakeHR is growing in prominence thanks in part to its visualisation features: you can use the platform to create a range of visual reports and references, including company org charts and a range of employee reports.
It also has easy-to-use leave management systems, and syncs in real time to software you might already use, including Outlook and Google Calendar. Plans start at €2.90 per employee per month (although they bill in euros, the company is based in London). They offer a 14 day free trial. Read more.
BambooHR is pitched not only at the smallest companies but also growing, medium-sized firms. As such, its feature offering is more exhaustive than some of its competitors.
It includes applicant tracking for when you’re hiring, self-onboarding systems for new employees, and custom workflows to help you streamline your processes. Pricing is determined on a bespoke basis – you just need to fill in a a short form on their website. Read more.
WebHR claims to be used by at least 20,000 companies worldwide. It includes all the core functions you’d expect from a cloud-based HR software option, but where it stands out is in its ‘social’ functions, including an employee messaging service.
It also has a very large range of integrations, and should fit in with software you’re already using. Read more.
Formerly known as Octopus HR, CascadeGo offers a full range of employee self-service options to help take some of the pain out of HR management. It also offers customisable work patterns for individual employees, which can be very useful if you have part-time or flexible workers.
CascadeGo charge a one-time ‘system implementation’ fee, followed by an annual subscription. Again, quotes are built on a bespoke basis. Read more.
Free HR software for small businesses
It might sound unlikely, but free HR software could be suitable for your small business. Some are totally free forever, with no restrictions, while others operate on a ‘freemium’ model – that is, certain features must be paid for in order for you to access them.
Some of the free HR software options are distributed on an ‘open source’ model. This means that the code itself is public, and anyone can make modifications as they wish. This can be extremely useful if your business has very specific needs. However, to customise the software, and to keep it running smoothly, you’ll probably need help from a developer.
Here’s our pick of the best free HR software for small businesses:
We already listed Zoho People in our overall roundup, but it’s free for up to five employees. If you only need basic functions such as time tracking and leave management, Zoho could be a great choice. It also integrates seamlessly with the whole Zoho ecosystem, which thousands of businesses have chosen as an alternative to competitors such as Google Suite. Read more.
Bitrix advertises itself as a ‘collaboration suite’. It’s made up of a series of individual but interlocking tools to help with tasks such as project management or CRM – plus, of course, HR. It includes all of the core functions you’d expect, plus some nice extras, including employee satisfaction tracking. It’s free for up to 12 users. Read more.
Unlike Bitrix24, IceHRM is dedicated solely to HR functions. It includes an advanced, automated leave management system, systems for making recruitment and onboarding easier, and even training delivery. The platform is free for up to five users. It’s worth noting, though, that IceHRM is an American company. They offer support for UK businesses, but some functions such as payroll may not be supported outside the States. Read more.