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Complete Guide to Human Resources For Small Businesses: HR Softwares

Complete Guide to Human Resources For Small Businesses: HR Softwares

If your small business’s “HR solution” consists of a few spreadsheets and some paperwork stashed in a filing cabinet, you may be missing a trick.

Katalatto will cover series of articles whether small businesses could effectively use HR solutions. On this article we will look to the key features to for in HR software for small businesses and how to choose the right solution for you, and then we will look at some of the most popular solutions available today, with a brief overview of their main features and benefits.

Most recent surveys found that small business owners as a whole were wasting more than four billion hours each year on admin, and 41% of them said that this sapped their passion and energy for running their companies.

HR software for small business

If you’re not using HR software for small business, you may be missing a trick. (Image Source)

One way out of this chaos is to invest in a good HR software solution, which can help you stay organised and handle common HR tasks like recordkeeping, payroll, and employee performance management. With prices starting at just a few dollars a month and typically increasing based on the number of employees you have, this is an investment that can quickly pay off if, even if it just saves you a few hours of your valuable time.
Types of Business HR Software

There are two main types of Business HR software packages: Core HR and Strategic HR.


Core HR refers to the traditional, “administrative” HR functions like benefits admin, attendance tracking, processing payroll, etc.

Strategic HR packages, on the other hand, help you with more forward-looking strategic tasks like hiring and retaining the best staff and tracking their long-term development.

Not all of the software suites focus on one area or another—there’s often a lot of crossover, and some packages cover everything, while others are more niche. But it’s a useful distinction to keep in mind as you decide what you’re looking for.

Here are some of the key features that business HR software can offer:

Employee Record-Keeping: Keep copies of important records for your employees, as detailed in our tutorial on key small business HR requirements.

Self-Service Options: Let employees log on and do things like update their details, request time off, etc.

Benefits Administration. Help employees enroll for benefits and manage their options from within the software.

Recruitment: Use the software to keep track of job applicants and manage the recruitment process.

Onboarding: Help new employees get up to speed quickly by providing the training and resources they need.

Succession Planning: Plan your future staffing needs and reduce your dependence on key staff members by having a succession plan in place for important roles.

Training: Some packages let you plan your employees’ training and development needs, and sometimes you can even integrate training into the app itself.

Performance Reviews: Keep track of employees’ performance year by year, set new goals and objectives, and have access to their whole development history within the software.

Reporting: Analyze your employee data and create customized reports on things like attendance, turnover, employee satisfaction, etc.

Time and Attendance: Manage employees’ vacation requests with a schedule to make sure you have adequate cover. Some software also offers more detailed time tracking for shift workers.

Communication: Pass on important company news to your employees, and allow them to communicate with each other through blogs, forums, message boards, etc.

Mobile Access: Let employees access the system through a smartphone app so that they can check in and upload information while on the move.

How to Choose the Right Small Business HR Software

As you’ve seen, there’s quite a wide range of features available to you. But the more comprehensive solutions, of course, often come with a higher price tag, so you’ll need to go through the list and decide which of them you really need.

The key question to ask yourself is: “How much time am I spending on this task right now?”

If you’re spending hours every month printing off résumés from prospective employees and then trying to find them and remember which people you’ve contacted and which you haven’t, then the recruitment module will probably save you a lot of time and help the software to pay for itself.

Other features, like the communication tools, may not have such a direct payoff, but they still could be valuable. See the following tutorial for more on the importance of good communication:

Also, think about how you work and how your employees work, and decide on the features you need and the ones you can do without. For example, some packages offer a mobile app that employees can use on their smartphones. If you have a very mobile workforce, this may be a useful feature, but if your team is office-based, it may not be necessary.

Ultimately, the best way to make a final decision is to narrow your choices down to two or three, and take them for a test-drive. Most providers offer a free trial period, and even for those that don’t, the cost of a single month is not prohibitive.

So, it’s worth setting up a test account on two or three different systems. Poke around in the dashboards and settings, deciding which features you like, which interfaces are easiest to use, and so on. You’ll usually get a feel for one that you like more than the others, and you can then cancel the also-rans and focus on getting fully up to speed with your chosen provider.

By the end, you now have a clear idea of the options available to you and how to choose a package that helps you manage HR more efficiently! Keep benefitting!

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