Does Your Small Business Need HR Software - two employees behind counter at small business

Does your small business need hr software?

Thursday, December 11, 2014

Finding the right HR solution for your business

When it comes to your small business, human resources (HR) can seem like an afterthought. That’s because business owners like you typically wear many different hats. From inventory to marketing and sales to people management, you’ve got a lot of jobs to do. But as your business grows, so should your attention to HR. So, in this article, we’ll take a look at why HR is an important component of your small business, and then take a look at HR solutions to help you keep your business moving. To start, let’s talk about HR for small businesses.

Human resources for small businesses

When it comes to HR in small businesses, it’s much different than full HR departments at large corporations. That’s because your business has fewer employees to manage. With fewer employees, benefits administration isn't as long of a process, you deal with hiring people less often, and typically have fewer HR issues arise. But make no mistake, these situations do occur, and having HR policies in place to strengthen the employee experience should be paramount. In fact, HR has more responsibilities than many people believe. Let’s take a look at some of the areas that an HR team is responsible for.


Payroll is a complicated process, and someone in the HR manager role usually takes the responsibility of ensuring payroll processing happens in a timely and accurate manner. As one of the biggest HR tasks, running payroll gets more complicated the more employees are at a company. This is further complicated by the rules and regulations companies have to follow when it comes to compliance.

Benefits management

Another role for HR is managing the employee benefits your company offers. From alerting employees to any benefit changes year-to-year to enrolling new hires into the correct benefits programs and answering questions, benefits management can be a tedious process. Again, the more employees you have, the more complex this benefit management process can be.

Documentation and compliance

HR is also responsible for making sure that your company is following all labor laws and other regulations associated with your business. They’re also responsible for making sure that you have the correct documentation in case of a dispute. When it comes to compliance, HR must be up to date with the latest rules and regulations, making sure that your company is operating within the rules.

PTO/sick tracking

For companies that offer paid time off and paid sick leave, attendance tracking is vital to make sure the business keeps moving forward, especially when employees are absent. HR can track this information and ensure job duties are covered and employees are following the paid time off and paid sick leave policies your company has set.

Job posting and hiring

Another critical role for HR is job posting. While this happens less often than at large corporations, ensuring accurate postings is critical to getting qualified candidates for the open roles. This helps to make sure that your business makes the right hiring decisions. Poor hiring decisions can be a real headache, costing you time and money.

Reference and background checks

Another critical component of the hiring process is conducting the necessary reference and background checks. This helps ensure that you’re hiring the right person for the role and that the person can be a dependable part of your team.


While this is never a fun part of the job, sometimes it’s necessary to terminate employees. HR helps with this process, including making sure terminated employees know what to expect when it comes to receiving their last paycheck, the option for post-employment continuation of health coverage such as the Consolidated Omnibus Budget Reconciliation Act (COBRA), and conducting exit interviews.


When your company hires a new employee, it’s important that they are familiar with your policies and practices. From time tracking to the vacation and leave policies, HR covers all of this during your onboarding process. Standardizing this process can help make sure that each employee is on the same page.

Performance reviews

As a business owner, you want to make sure that your employees are performing appropriately, and performance reviews are a way to make sure that your workforce is meeting or exceeding expectations. If they’re not, HR can work with the employee and the employee’s supervisor to discuss ways for the employee to improve future job performance.

Resolving employee issues

HR is also responsible for resolving any employee issues that arise within the company. While issues can usually be resolved between employees directly, a formal dispute process sometimes needs to take place. HR is responsible for ensuring that this process happens in accordance with the policies and procedures put forth by the company.

As you can see, HR performs a lot of tasks that are critical for business success. For business owners, taking care of all of these tasks can be time consuming, and it may make sense to outsource payroll to a third party partner or use payroll software. In the next section, we’ll take a look at when it makes sense to consider payroll outsourcing as a small business.

Considering HR software as a small business

At your business, it can be tough to know when HR software makes sense for you, and each company will have different HR needs. But one of the key considerations is this – what is your business’s trajectory? HR solutions can help your business grow and HR platforms can help you organize and perform the tasks necessary for that growth. HR software can streamline the complex processes involved in HR management, thereby allowing you to focus on your business. So whether you're not quite ready to hire an in-house HR team or you're looking to improve efficiencies for the HR professionals on your team, look to an HR software to help your small business get there.

There are a lot of benefits of utilizing HR software at your company. In the next section, we’ll take a look at the biggest ones.

The benefits of HR software

The best HR software solution is the one that's right for your business. With so many options on the market, finding the right HR software to meet the needs of your small business or startup can be tedious. So, to help simplify the process, here are some of the most common HR features that the right HR software can provide:

Enhancing payroll management

Payroll management is a challenge for small businesses, and having HR software that can help you manage your payroll is essential. When it comes to payroll, automating your payroll management can help eliminate errors and inconsistencies. An HR system with payroll capabilities can also integrate with other HR capabilities to make sure employees are tracking their time correctly and appropriately while calculating overtime and other labor costs for your business. That can help you stay on top of your payroll without having to spend as much time actively working on it. While many HR software solutions feature payroll, others allow payroll functionality as an add-on.

Improving the hiring process

Another benefit of HR software is that it can help you improve your hiring process. As your business grows, streamlining your hiring process is critical to your success. Many HR software programs give you access to applicant tracking systems (ATS) that allow you to keep track of potential candidates as well as post job openings to various job sites. With this software, you can manage the candidates and the entire interview process, from their resume submission to their first day of work. This type of software can help you make sure you’re getting the best candidates for the job.

The applicants in your talent pool expect timely communication during the application and interview process. With ATS, your business can streamline and automate this communication, helping you to stay on top of the best candidates and make the best hiring decisions possible.

Maintaining compliance

Compliance is a big deal, and the rules and regulations are constantly changing. If you’re not familiar with these changing rules and regulations, it can cost your business time and money. With HR software, you’ll be able to maintain compliance much easier. That’s because the software can help you manage all of the documents and forms your employees need to sign while storing them securely. Compliance tools make it easier for you to keep track of all the necessary information in one place, so you’ll have it at your fingertips when you need it.

Digitizing record keeping

When it comes to HR, there’s an unbelievable amount of documents and employee data records that you’re responsible for. Record keeping is one of the biggest administrative tasks in HR, and it's also one of the most tedious. While storing a hard copy of all of the documents can be a nuisance and take up valuable storage space at your business, HR management software can provide you with a digital record of all of these documents. With a robust digital library of documents, your records are accessible when you need them and you’ll be able to retrieve them with just a few clicks. From tax documents to performance reports and other pertinent information, you’ll be able to keep track of employee data all in one place.

Automating recurring processes

When it comes to workforce management, developing an intuitive, repeatable process for an employee’s journey is key. From posting job descriptions on multiple sites to talent management to the interview and onboarding process, establishing solid workflows during the entire employee lifecycle can make a big difference at your business. An HR solution can help you structure these workflows as well as implement them automatically, reducing the human error that can come from manual spreadsheets and other data entry. You’ll have full control over creating and structuring these HR processes exactly how you want them, saving you hours of time and headaches down the road.

Improving security and risk management

Employee records contain a lot of sensitive data and information. When it comes to HR, making sure these records are secure is a major responsibility. Paper records can pose more risks to your business than electronic documentation. So with HR software, your business will be protected from those security risks. HR software can also help you protect your business with a customizable record management system of employee training, workers’ compensation claims, and disciplinary actions and notices.

Streamlining employee changes

When it comes to your employees, life changes make it necessary for them to update their information. While this data entry change would be time consuming for an HR employee, HR software often includes an employee self-service portal. This user-friendly self-service portal can reduce the administrative workload in HR departments by enabling employees to have access to their own information. From changing their address to planning and changing their retirement contributions to switching health plans and changing beneficiaries for life insurance policies, employee self-service portals shine for their ease of use, helping you to streamline employee changes.

Managing employee performance

Another benefit to HR software is performance management. Employee engagement and development is key to business growth. From tracking employee reviews to allowing other employees to give feedback to fellow coworkers, HR software can help increase employee performance. Some software even includes specific HR tools for boosting employee development, like educational courses, goal setting, surveys, and more. These human capital management tools can help you create and foster relationships with employees while setting the appropriate expectations for their performance at your company.

As you can see, HR is a complex part of your business. And, as a small business owner, it’s important to know all of the benefits of making HR a priority. So as your team grows, placing a higher significance on HR is key. But if you don’t have time to manage it all, HR software can help your business in a variety of ways. From hiring to benefits, a good HR software offers the right tools for your needs, helping you to focus on growing your business.


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