What is the best HR tool for small business and what does it do? Every company should consider Top HR Software Small Business that is essential for any business to ensure employee productivity and growth. HR plays a crucial role in managing the growth rate of businesses. It helps in building a positive image of the company as well as streamlining the work environment.
As the responsibilities of HR departments grow, so do the capabilities of the software solutions they employ. Human resource management systems these days manage aspects as diverse as sexual harassment training ad payroll. The best HR software can help navigate the intricacies of hiring, firing, benefits administration, and performance management. We look at the best solutions and how they can make managing payroll, in-house certifications, incentives, and other personnel-focused tasks much easier.
What Is HR Management Software?
HR systems also cover a series of disciplines for which software makers have built individual or vertical solutions. That’s why in the features table above you can see several Editors’ Choice award winners. Be aware that, for this category of general-purpose HR software, the sole Editors’ Choice winner is BambooHR. Our other Editors’ Choice winners won their awards in other roundups of HR software that specialize in the various subcategories described in the article below.
These tools let you manage employee records from within a desktop application, a web browser, or even a smartphone app. Some offer you the ability to tie into applicant tracking (AT), benefits administration, and performance management tools so that you can follow your employee’s success from recruitment to retirement.
Advanced HR management capabilities are in easy reach for companies of all sizes using Software-as-a-Service (SaaS) solutions. Not only are these offerings cheaper than older on-premises solutions, they’re also usually intuitive, brightly designed software platforms that are not only easy to use but also integrate easily with other back-office SaaS tools, such as accounting, and enterprise resource planning (ERP) apps.
When selecting HR management software (HRMS), you’ll want to consider several key elements: Does its user interface (UI) offer an intuitive experience that doesn’t necessitate a heavy training burden? Does the tool tie into your legacy software packages, especially when it comes to data feeds? Can it scale as your company grows? Does the vendor offer the kind of service you’ll need should the software fail at any point? Once you’ve determined your requirements and preferences, you’ll be able to approach any of these vendors with a wish list. Test the solutions that meet your needs and choose the one that fits your ideal combination of price and utility.
Key Features of HR Software
How your company manages HR can be highly individual, but there are certain key capabilities and features you should look for in any solution to make sure your pick can grow and change along with your organization’s needs. We’ve described key capabilities below:
- Applicant Tracking (AT). Includes the ability to manage job postings, apps, and even onboarding of new employees.
- Benefits Administration. Is critical for most HR operations and what HRMS software makers offer here can vary from simply managing employee enrollment all the way to offering specific benefit plans to customers.
- Scheduling and Shift Planning. Is often dedicated tools though the capability can show up as part of larger HRMS platforms or those that focus on businesses where this capability is important.
- Performance Management. Might be the ability to simply keep a record of employee goals or it can track goals down to the task level and tie success directly and automatically to compensation and payroll.
- Online Learning. Can be another offshoot of performance management, letting managers provide the training employees need to achieve their goals and also keep the company in compliance if certifications are required for certain jobs.
- eLearning Authoring. Can let your company build its own training materials to be offered internally or on a publicly accessible learning hub.
Regardless of its target audience, here are some other key features to look for in any HRMS system:
- Integration. Most of these players (though not all of them) offer either canned integrations or open APIs. For example, Zenefits offers integration with platforms that include Expensify, Google’s G-Suite, Microsoft Office 365, Salesforce, and Slack. Canned integrations are simply a list of partner apps with which the HRMS vendor has built direct integration capability that you can opt in to by either paying extra or downloading a connector. Open APIs allow you to build your own integrations between whichever systems you like as long as they both support the API and you’ve got some programming talent in-house.
- Mobility. This still isn’t a must-have feature for a successful HRMS implementation, but it’s getting there. HR data tends to be data that employees need to access on the fly, especially things such as benefits information and time-off requests. Providing the ability to do that easily and securely on mobile devices means making sure the solution offers client software for both Android and iOS devices at a minimum.
- Security. Be sure to investigate how the solution protects customer data. Most of these systems are cloud-based, which means your employee data—including personal information and financial data—will wind up stored online somewhere. So, ensuring that the solution’s adequately protected with role-based access controls and at least the option to encrypt data is critical.
Applicant Tracking
This category is about making sure you don’t let your best candidates slip through your fingers because of mismanaged onboarding. The best applicant tracking (AT) tools let you follow your candidates from the first interaction until the day they leave your company. Before you choose a system, it’s important to consider your team’s specific needs. Do you want AT as part of a larger software ecosystem? Do you want something that can handle an unlimited number of users and job openings? How important is it to you that your system integrates well with your corporate website and email client?
Most of the AT systems we reviewed automatically post newly created jobs to free job websites and premium job websites for which you have paid a small fee. If you regularly hire people, then you’ll want to purchase a tool that ties back to your corporate careers page. This enables your system to automatically feed candidate data from the app page directly into the AT software. The best tools available, including Editors’ Choice winner Bullhorn Staffing and Recruiting, offer social buttons that let you share postings on Facebook, LinkedIn, and Twitter. Even the most barebones AT software comes with a robust reporting platform. Typical reports include hiring velocity, candidate sourcing, and pipeline reports. These reports are more valuable for staffing firms than for in-house recruiters, but it doesn’t hurt to find a system that provides ultra-detailed reporting on attractive dashboards.
Benefits Administration
Benefits administration is a core element in any good HR organization. Some businesses may be satisfied with the features provided by some of the all-up HR management systems reviewed in this HRMS roundup, but others have more complex BA requirements and need software that specializes in BA. This is why we opted to devote a whole roundup to the category. Flush benefits packages are a major selling point in attracting top talent to your startup, small to midsize business (SMB), or enterprise. But the ease and efficiency through which your business administers its various benefits packages is how you keep those employees happy and show them they’re valued.
BA software should do two things: It should make it easy for HR administrators to choose and customize plans, and it should make it even simpler for employees to register for those benefits via an automated enrollment process as well as easily access their benefits and insurance information. The stand-alone BA capabilities you choose within your HR suite should be able to handle basic medical, dental, vision, life insurance, and disability, with customizable plans.
On top of that, leading all-in-one BA and HR platforms such as Zenefits, the Editors’ Choice winner in this category, also add the ability to manage payroll and retirement benefits such as a 401(k), plus additional perks for startups such as a stock option module. BA software should make people’s lives easier when enrolling in the plans that best suit their needs. It should also add enough special features via an intuitive interface to keep employees confident that their employer is taking good care of them.
Performance Management
Businesses tend to look at a solution’s performance management features when deciding which HR management platform to adopt. This is because there are various popular methodologies for measuring employee performance. Software makers have continued to create a range of packages to suit business needs. Evaluating employees for bonuses and compensation as well as crediting them for certifications, as well as skill advancement are all key features to look for.
Our Editors’ Choice winner in this category is SAP SuccessFactors, which did a great job of providing effective mechanisms for assigning and tracking goals, feedback, and coaching, and then examining those criteria during the performance review process. While it doesn’t have its own payroll module, it can effectively communicate employee performance results to your existing payroll system. Data integration should be a key feature no matter what system you wind up choosing, as is the ability to define your own custom workflow for the performance review process. This means the system can use email, document routing, and internal workflow routing to let you design an initial performance review, followed by the right number of subsequent approvals and evaluations necessary in your organization.
If you are, this article should help bring you up to speed so that you can save time and resources that you can redirect toward new growth. The workplace has changed a great deal in the last few years and business owners can’t afford to neglect their most valuable resource — their employees.
Small businesses have unique human resource needs for their own small-scale situation. Here are seven useful HR tools and resources for seven small business scenarios.
How do you know when your small business needs an HR software solution?
Your small business might not have 100 employees yet—it may not even have 50. But if your business grows beyond its current state, your employees will need structure and leadership, and you will need people who can support great managers, help define your company values, and maintain the effective, positive culture you value as a small business owner.
In short, you’ll need effective HR to grow—and great HR only happens when HR professionals have the time and the tools to make a difference for the people in your organization. Without assistance, HR can become so blinded by data management, compliance concerns, resumes, tax calculations, and mountains of paperwork that the work of keeping everyone together goes undone. In the end, HR software is not just about saving HR’s time and money by automating routine tasks—more importantly, it enables HR to extend those benefits to the rest of the business so your employees can spend their time and resources on progress instead of administrative tasks.
1) FOR HIRING GOOD TALENT
As a small business, your employees are one of your greatest assets. Hiring the best and the brightest to help grow your business and perpetuate your company’s values should be a priority. Start off on the right foot by being specific in your job descriptions. Then, be clear about your expectations so your candidates will have the best chance of meeting them.
Tool: An Applicant Tracking System (ATS) is a simple way to track, share, and evaluate applicant information.
Resource: The U.S. Equal Employment Opportunity Commission offers extensive information to employers regarding obtaining background checks for potential new hires. Eliminate possible discriminatory actions by following all guidelines in your request for and use of background information.
2) FOR EASING EMPLOYEE EVALUATIONS
Regularly scheduled evaluations are an important way to document employee performance and determine upward changes in titles and compensation or decide when it’s time to let an employee go.
Tool: Using Performance Management Software will decrease the time it takes to submit and assess evaluations. It will also increase the amount of valuable feedback and performance measurements.
Resource: If an evaluation shows that it is time to terminate an employee, the United States Small Business Administration (SBA) will help you through the process legally and strategically.
3) FOR DETERMINING FAIR COMPENSATION
One of the trickiest parts of Human Resources can be determining how to pay your employees a fair compensation. Improper pay practices can trigger violations and accompanying fines, which can be costly.
Tool: Payroll Software Solutions will keep track of compensation, taxes, bonus amounts, reimbursements, hours worked, and requested time off.
Resource: An Employer’s Guide to Equal Pay (https://www.dol.gov/sites/default/files/documents/featured/equalpay/equalpay-employer.pdf) from the U.S. Department of Labour explains the law and how you can review your own pay practices to ensure you are in complete compliance.
4) FOR OFFERING ONGOING EDUCATION AND TRAINING
If your employees aren’t fully trained for their first day of work and well beyond, your small business may be wasting a substantial amount of money as well as losing business opportunities.
Tool: Employee Onboarding Software can help new hires assimilate quickly and be better prepared with everything they need to know for their new job.
Resource: The Society for Human Resource Management has an entire section devoted to Learning & Career which offers seminars, webcasts, virtual events, and certification prep geared specifically for your HR team.
5) FOR WRITING A USEFUL EMPLOYEE HANDBOOK
An employee handbook is a must as it serves two purposes: 1) Communicating to your employees your expectations of them; 2) Protecting your business if a dispute arises with one of your employees.
Tool: HR Reporting Software can make it easy for you to create detailed reports on and analyze the results of almost any data in the system. For example, if an employee disputes disciplinary action, you’ll have the means to show a trend of past violations of company policy.
Resource: For guidance on writing your small business’ employee handbook, refer to the National Federation of Independent Business (NFIB) who instructs on writing about every topic from dress codes and attendance to employment classification and insubordination.
6) FOR KEEPING CURRENT WITH LAWS AND REGULATIONS
The federal, state, and local government each have their own set of laws, regulations, and reporting requirements. It is critical to keep abreast of them all in order to keep your business license.
Tool: Employee Database Software can be customized to efficiently track compliance information.
Resource: For a free and confidential safety and occupational health on-site consultation for your small businesses, contact the Occupational Safety and Health Administration (OSHA).
7) FOR KEEPING DATA SECURE
You have a responsibility to your employees to keep their information safe from data breach, computer viruses, and identity theft. Also important is backing up your hard drives so information doesn’t get lost.
Tool: Human Resource Information Systems are used to store and protect your employees’ personal and confidential information, taking extra precautions to provide enterprise-level security.
Resource: The Federal Trade Commission (FTC) has free data security resources for businesses of any size
As a small business owner, you are used to doing everything on your own. As your company grows, so does your stress level when hiring new employees..