How to pick the best HR software for your small business
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Spend some time googling HR software for small businesses and you’ll quickly appreciate how much choice there is. The market is cluttered, no question about it.

So how do we sort through the impenetrable jargon and marketing shpiel to choose the best option?

That’s what we’ll examine here: How do I choose the best HR software?

What is HR software?

Just so we’re absolutely clear on what we’re talking about: HR software is a tool that pulls most of the elements of people management (which you might be currently running on spreadsheets or paper lists) into a single place. All your employee data and processes in the same system, eliminating loads of admin. Today most of these tools live in the cloud and you access them via an internet browser, which means you and your people can log in, check and update information from anywhere, at any time.

Why do small businesses buy HR software?

The number one reason small businesses invest in HR software is time. As your team grows, so does the admin associated with being an employer. You know this, that’s why you’re reading this article. There’s never enough time. And unmanageable HR admin will hurt you in two ways:

First, it takes you away from the important job of growing your business. Second, it leaves you open to administrative errors. Over time, small HR errors will damage engagement and harm your people’s trust in you as an employer. And big ones, like compliance breaches, have the potential to devastate a small business.

Where are you on HR right now?

What’s your current HR admin cost? How many hours are you spending on payroll admin per month or absence and leave management, for instance? How much is your time worth? If you know that, you can work out the basic cost of HR admin.

Armed with this information, you can go in with a clear idea of where you are now – and where you’d like to be once you’re up and running with your new HR software. Not only will this make the selection process easier, but it’ll mean you can measure the return on investment your software delivers.

What SHOULD your HR software offer?

Automation: Any decent HR software should offer this. It means things like holiday entitlement are calculated automatically. Change the data in one place, add some overtime, for example, and all the relevant payroll updates are performed by the system. Tasks that take ages on a spreadsheet are done in seconds by the software. Here are 5 ways automation helps small businesses.

Self-service: You know how you often get distracted by employee HR queries? Well, self-service virtually eliminates that. When you use HR software, employees should be able to send a holiday request and access their own information, like payslips and personal information like bank details. “I don’t know how much holiday you have left, Dave. Have you logged into the HR system and checked for yourself?”

Compliance: We already mentioned compliance risk. But keeping up with regulatory obligations is a full-time job and we know HR software can take some of the pain out of it. A good HR system should keep you GDPR compliant on employee data, for instance. It can warn you if you’re at risk of a breach on right-to-work or minimum pay conditions following someone’s birthday. And it should provide reminders on important deadlines, document expiry or health and safety inspection, meaning no more last-minute compliance panics.

Ease of use: Business software has a well justified reputation for being overly complicated, difficult to use, and frustrating. You don’t want to swap one complex admin headache for another, so make sure you test drive any prospective HR software. Ask for a demo, or even better a free trial to see how it can work for you.

What functionality do you need from your HR software?

Although we provide payroll as an optional extra, our HR software comes out of the box as a one stop shop for all other HR management tasks:

  • Easy holiday and absence management
  • Performance management
  • Timesheets and time clocking
  • Smart alerts
  • Custom HR reporting
  • Expenses management
  • Easy onboarding
  • Training and CPD logs
  • GDPR tools
  • Payroll as an optional extra

Some other HR software providers only provide a basic service at their advertised price, and everything further will come at an extra charge, so make sure you have a good idea of exactly what you’ll need from a system before you start the conversation.

How much does HR software cost?

Unhelpful answer… it depends. Generally, the minimum you should expect to pay is a couple of pounds per employee. Seek providers who work specifically with small businesses, but look out for big lists of optional extras, which indicates the standard product may not include all the things you’ll need.

We’re fiercely transparent on pricing – it’s something we pride ourselves on.

Key questions for suppliers:  

How easy is it to implement?

How long will it take to get up to speed? How disruptive will the process be? How much time and work will it involve on your end? What are the training options for you and your team?

Will I be tied in?

Some suppliers will try and tie you in to a long-term contract and/or make it awkward and difficult to transfer your data to another system if you choose to swap providers. (Our software is available as a rolling subscription and we will never, ever tie our customers into a long contract.)

How scalable is it?

You’re a small business right now, but you probably won’t be this small forever. How will the HR software adapt and grow alongside you? How easy is it to add additional employees and what’s the cost of this?

Is this a supplier I want to work with?

This is an important question that often gets forgotten. Who are these people you’re thinking of entrusting this vital element of your business to? How quickly will they respond when you have a problem? (We guarantee to respond in 2 hours) What do existing customers say about their customer service? Are they legitimate HR experts who can offer advice when you need it? Ideally, you want to find a supplier who’ll support you across every area of HR.

There are enough options on small business HR software that you should be able to find the perfect fit for your specific needs. Good luck!

Citrus HR software was recently rated ‘Best all round’ by We won’t be beaten on value or customer service. Check out our pricing and take advantage of our 14-day free trail to see for yoursel

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