Best HR software for small businesses 2022

The HR software market is constantly changing and growing just like the HR department. According to the 2019 KMPG Digital Trends Survey, “two-thirds of HR managers believe that HR has undergone or is undergoing a digital transformation,” but many companies feel that they can only succeed in digital transformation by purchasing large software that requires a reliable—and often large—budget . Luckily, small business HR software doesn’t have to make money.

Read more: 11 Best Marketing Automation Software for Small Businesses

What if you can’t afford a big tech purchase? For a small business or startup, buying the latest incarnation of Peoplesoft sounds about as realistic as giving employees a total of $10 million in Christmas bonuses.

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Despite tighter budgets and limited IT resources, small businesses need to centralize workflows and be efficient, especially when it comes to small business HR systems. In this article, we take a look at some of the best HR software for small businesses – modern cloud-based systems with cutting-edge features at an affordable price.


The best HR systems
The best payroll systems
Small business problems
Key features of small business HR software
Types of HR solutions for small businesses
7 Best HR Solutions for Small Businesses
Choosing the best HR software for your small business
The best HR systems

To reduce your research time, we’ve compiled this list of the best HR software.

The best payroll systems

If you want to focus specifically on payroll solutions without needing broader functionality, we recommend the solutions below.

Fast books

Intuit QuickBooks provides in-depth accounting paired with an intuitive interface that helps businesses manage their accounting and finances. There are three main versions of QuickBooks. QuickBooks Online has become one of the most widely used accounting suites on the market today, and QuickBooks Desktop is the older accounting software. The Enterprise Solutions Suite offers the same as Online or Desktop, but with the capacity to manage accounting and finance for large enterprises.


Use Paylocity to simplify payroll, automate processes and comply with tax regulations, all in one place. Transfer expense reimbursements to payroll and run custom reports to get the data you need. And give employees the flexibility to access a portion of their earned wages when they need it. Ensure accuracy and put time back into your day. Delete spreadsheets, calculators and signatures along the way with a tool built right into your payroll software.


Paychex is a cloud-based payroll system that offers payroll, HR and benefits management systems for small and large businesses. Paychex covers payroll and taxes, 401(k) employee retirement services, benefits, insurance, HR, accounting and finance. The software also offers accounting and financial solutions including payment processing and expense management services while ensuring compliance with federal laws and local regulations.

Small business problems

Villanova University cites change management, leadership development and performance measurement as some of the top challenges facing HR.

Businesses of all sizes are affected by the need to more effectively record and respond to employee burnout, and the software industry is evolving to meet these demands. At an industry level, things are looking up, but small businesses still face many different challenges.

No dedicated HR staff

Many small businesses either assign responsibility for HR to a cross-functional manager or to a single internal HR administrator. In both scenarios, one person handles payroll and benefits, time tracking, grievances and disciplinary action, hiring and promotions, which can be overwhelming.

While HR software cannot replace an HR administrator, it can make things easier for the employees you have. It simplifies and even automates certain HR processes, such as sending new hire documents and registering benefits, so your team can focus on the tasks that need their expertise the most.

Record keeping and compliance

HR regulations are constantly changing. Small businesses must balance health care reform, tax laws and labor law. Armed only with a filing cabinet and the Sunday paper, this is sure to lead to errors, processing delays and, in the worst cases, legal fees.

HR software organizes your records and makes them easy to search and access. Many HR tools also automatically calculate tax and benefit deductions to reduce the risk of human error and keep you compliant.

Employee attrition

According to the OFWpinoy Employee Satisfaction and Loyalty study, 42.6 percent of employed workers are actively looking for or at least open to a new job. Without a strategy to invest in talent and build an attractive work culture, small businesses lose good employees to competitors who offer higher salaries and better benefits.

The right HR software can actually reduce operational costs so you can afford to invest more in your people. By automating and streamlining HR processes, software reduces the workload of your HR staff, which means they’re likely to be less stressed too.

Performance gaps

With smaller teams, it quickly becomes apparent that some employees are not pulling their weight. But without a formal performance management or training system, how do you orchestrate consistent improvement?

Many HR platforms include performance management tools that standardize the review process and ensure everyone meets expectations. This can also improve the metrics for paying bonuses to reward employees who go above and beyond and incentivize those who don’t.

Also read: Bonus Time: Using Performance Metrics for Payouts

Key features of small business HR software

The right small business HR software can alleviate small business problems by automating administrative tasks, record keeping and compliance, and giving HR coordinators the tools to find and retain top talent. In today’s market, most solutions are moving towards mobile access, multi-channel talent management, internal collaboration models and self-service portals.

In order to achieve the highest possible return on your investment, it is important to choose an HR solution for small businesses that offers modern options and an intuitive approach. Although solutions vary from vendor to vendor, a full-featured HRM platform will offer a combination of the following features:

Employee self-service
Applicant tracking and onboarding

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