The Top HR Software for Small Businesses in 2024

If you want to provide a better employee experience, while streamlining your HR processes to make them more efficient and to improve overall business performance, you need HR software. We've put together a list of the top HR software to help you make an informed choice that will benefit your company.

Ask an HR software vendor if their solution does what you need it to do. Around 99% of them will say yes, even if that question is: "can your software clean our offices?" That's what makes it so hard to know which one to choose, especially if you can't get access to a free trial to test out before you decide to make a purchase.

Once you've implemented the solution, you have to stick with it or face a mammoth battle to try to migrate all your data to another platform and get used to another system.

At The Ascent, we test all software before writing reviews, and we benchmark each solution against all the others. That's because we want you to have all the necessary information to make a decision you won't regret.

Here is our pick of the best HR software solutions on the market this year. Click through to read the full reviews and learn more about each tool in detail.

What The Ascent looks for in a great HR software

Every business has different needs, but there are some core features that you should look for in any HR software. We'll explore the characteristics to look out for below.

Employee portal

Having to enter and update employee details yourself is a time-consuming process. A self-service employee portal allows workers to input and alter their details, such as when they are changing address or updating their marital status.

Other useful functions of an employee portal include shift management, with workers clocking in and out themselves, and absence management, with workers asking for time off or entering sick leave details themselves.

It's important to make sure employees have the right permissions, so they only have access to their own details, and cannot access any sensitive company information.

Absence management

It's important to keep on top of who is on vacation, who is at the dentist, who is on jury duty, who is on sick leave, etc., so you can ensure adequate staffing levels. By choosing an HR software with absence management functionality, you can make sure you have adequate cover for planned absences while keeping on top of unplanned absences.

As different companies have different absence guidelines, you are also able to tailor the system to your specific needs. This includes factors such as how much PTO an employee gets, whether you have a work-from-home policy, or if you have a return-to-work process.

HR software systems can also help you keep track of different types of employees, for example, whether they are part-time, contract, or have more PTO due to longer service at the company.

Benefits administration

One of the most important factors for US employees when choosing a job is the benefits package. That's why being able to manage benefits in an efficient and transparent way is so important.

By using HR software, you can create your own benefits package and make sure it takes into account both your business situation and the needs of your employees.

With HR management software, you are able to track the costs of this package, as well as get an overview of which employees are eligible for which benefits. Employees also get full visibility into which benefits they are entitled to, and what the cost of these benefits will be each month.

Applicant tracking

While you don't necessarily need a solution that comes with full-blown HR recruitment software functionality, it's important to be able to post job ads, source candidates, and move these candidates down the pipeline.

This will not only help you to recruit better candidates in a shorter timeframe but also improve the candidate experience. This means that you can attract the best talent to your company, instead of putting them off with a long and over-complicated hiring process.

Payroll integration

While it isn't necessary to choose HR payroll software that lets you manage your finances from within the same solution, you do need to make sure that the solution you choose integrates with your payroll system.

That's because HR needs to share data, such as salary, hours worked, and overtime with the payroll department to ensure each paycheck is correct.

How your business can benefit from using HR software

Instead of seeing HR software as a costly investment, you need to consider the time and efficiency benefits, plus savings in expenditure you'll make in the long term. Here are the benefits your business will reap from HR software.

Automate manual processes

Implementing HR software helps you automate manual processes, so you can concentrate on taking care of your workforce and keeping your employees happy.

HR software takes a lot of the effort out of tracking overtime, managing absences, setting and reviewing goals, and sourcing and hiring candidates. Instead of having to manually enter and update data, and track the progress of different processes, you can let your software take care of that for you.

Improve data quality

There are some business functions where having accurate data is crucial. HR is one of those business functions. If you don't have HR software, and instead use spreadsheets or -- even worse -- pen and paper, making sure you have accurate data is almost impossible.

People email spreadsheets back and forth so you're never really sure which one has the latest data, and you have no version control to see what changes have been made. Your data is also not protected, and can easily fall into the wrong hands, plus if you're out of the office, you might not have access to the necessary information.

With HR software, you always have access to the latest data, and you can set permissions so only certain people can access specific information.

Assuming you choose cloud-based, online HR software, anyone can access the data from anywhere in the world through an internet browser.

Better comply with laws

As an HR professional, you have to keep on top of a lot of different regulations, and non-compliance often equals hefty fines. But, if you have better quality data, see point above, you're far more likely to be submitting accurate information and within the necessary deadline.

Some of the best HR software options have features that specifically deal with regulations, especially new laws, and provide training to ensure you are completing the necessary steps to stay compliant.

Also, companies such as SentricHR provide tips in their blogs to make you aware of new laws -- such as the overtime exemption threshold law change -- and help you stay within the rules.