How to Find the Best HR Software for Your Small Business

Did you know that over 3 million small-to-medium businesses use Human Resources (HR) software?

Whether you're launching a new company or have been steadily growing your small business for the past decade, having a well-structured HR foundation is essential to long-term success. Implementing the right HR software can be a cost-effective and powerful tool for streamlining HR tasks, organizing important information, and improving overall efficiency. It can also enhance accuracy, reduce administrative burdens, and boost employee satisfaction.

With the HR software market growing rapidly, there’s no one-size-fits-all solution. Every small business has unique needs, so finding the right fit is key.

In this article, we’ll walk you through how to choose the best HR software for your small business.

Review Your HR Process

Before searching for the best small business HR software, take a close look at your internal processes and identify where automation could improve efficiency. For example, think about how long it takes to manually process payroll or how many data entry errors have occurred in the past six months.

Tasks like these are often time-consuming and prone to mistakes—making them prime candidates for automation. A recent study found that 69% of users said HR software implementation helped cut down on payroll processing time, and 25% reported improved legal compliance.

Additional Areas to Evaluate

So, you've discovered your main pain point within your internal process, but HR software can help you streamline more than one area. To dig deeper, ask yourself these questions about your current HR operations:

Onboarding new employees: How seamless is your onboarding process? How long does it typically take to get a new hire fully ramped up?

Tracking time-worked: Do you manually track hours? What does your current process look like, from clocking in and out to management approvals?

Employee benefits enrollment: How easy is it to enroll employees in health insurance and other benefits? How much time does it take your team?

Retirement contributions: Are retirement deposits automated with each payroll cycle, or do you handle them manually?

Employee record-keeping: Can you quickly access important employee records when needed? Do employees have self-service access to their own documents?

As you review these processes, pay attention to those time-consuming tasks and any bottlenecks that disrupt the smooth flow of your team's operations.

Gather Feedback From Other Teams

Don’t forget to involve different departments in the decision-making process.

Managers: Leaders can offer insight into management preferences, like whether it would be easier to use a centralized platform for tracking time worked and approving PTO.

Employees: Employees will also be affected by the implementation of HR software, so consider asking them what features would be most valuable. For example, would they prefer direct access to tax forms and documents or an easier way to update banking information?

IT team: Your IT team can recommend tech stacks that align with your current systems and highlight software with the best integration options.

By thoroughly reviewing your internal operations, you’ll be better equipped to choose the best small business HR software that truly meets your specific needs.

Consider Your Budget

Once you’ve nailed down which aspects of your process could benefit from automation, the next step is aligning your needs with your budget. A well-planned cost-benefit analysis will help ensure you’re investing in software that delivers real value.

Key Budgetary Factors

Expected growth: Factor in your business’s expected growth when choosing HR software. If you currently have five employees but plan to scale to 50 in the next few years, look for a solution with flexible pricing models, such as per-employee pricing, rather than a flat-rate structure.

Long-term savings: Think beyond upfront costs and consider the long-term return on investment. While an all-in-one platform may have a higher initial price, it can lead to significant savings over time by automating manual tasks, minimizing compliance risks, and increasing overall efficiency.

Ease of implementation: Look for HR software that offers comprehensive onboarding, training resources, and strong customer support to ensure a smooth transition. The easier it is for your team to adopt the new system, the faster you’ll see a return on your investment.

By carefully weighing these factors, you can find HR software that fits your budget while supporting your business’s long-term success.

Do Your Research

Start by researching HR software companies that specialize in catering to small businesses and their unique needs. Many small-business-focused HR software providers also offer more personalized support, with hands-on sales and customer success teams to guide you through the selection and implementation process.

In addition to researching the market, reach out to other HR professionals or small business owners for recommendations. A word-of-mouth referral can provide valuable insights and help you find software that fits your needs and budget.

Request Demos (and Ask Questions!)

Demos are a great way to test the software firsthand and get answers to any specific questions about integrations.

Let’s say you already use a project management tool like Asana or a CRM platform like Salesforce. Understanding how HR software integrates with your existing systems is a great way to troubleshoot issues before they arise and pick the best software for your team.

Use these conversations to discuss any customizations or unique business needs. For example, if you have a fully remote team hiring across multiple states, ask how the software handles onboarding, legal compliance, and multi-state payroll.

Don’t hesitate to ask as many questions as needed. The best HR software for your small business may not be the first one you come across, so take your time, compare options, and consider feedback in order to find the best fit.

How Justworks Can Help

Choosing the best small business HR software for your company is a crucial investment—not just for today, but for your future growth. The right platform will enhance your team’s efficiency, reduce manual tasks, and help your HR operations run seamlessly, allowing you to focus on scaling your business confidently.

At Justworks, we’ve designed our HR software with the needs of small businesses in mind. We’re aware that it’s important for these businesses to be able to rapidly change alongside their industry, which is why we provide some of the most dynamic and flexible HR solutions available.

Ready to learn more about how Justworks can help you free up time to spend on supporting your people and growing your business? Contact us today to get started.