Workplace & culture

HR Software for Small Business: A Comprehensive Guide 2024

A guide to how HR software can help your small business. We explore what it is, what to consider when researching, and the benefits.

Table of Contents: 

Time is a precious commodity, often lost to distractions, urgent tasks, and administrative duties. The right tools can transform your business HR processes, whether you manage HR duties, lead a small business, or juggle multiple roles.

This is where HR software for small businesses plays a crucial role!

In addition to streamlining HR tasks and simplifying data management, HR software solutions are valuable time-saving tools. This enables managers and small business owners to prioritize strategic planning, develop innovative approaches, and align with their business's overarching goals.

What is HR Software?

HR software (sometimes known as an HRIS or HRMS) helps digitize and automate.

Many small businesses may hesitate to invest in an HR tool because it seems beyond their budget. It may be more tailored towards more prominent corporations. Others find that it sounds too complex and so forego considerations altogether.

The good news is that HR software for small businesses does not have to break the bank. And, while it may seem complex, it’s expertly designed to simplify.

How can an HR software help your business?

Here’s how human resources software can help in each area:

Vacation tracking

At PurelyHR, there’s a reason Time-Off is our flagship module. Requesting, tracking, approving, and scheduling PTO takes time. Critical features of leave management software (such as Time-Off) include easy access to leave balances, customizable time-off categories and policies, a user-friendly request and approval system, a shared company calendar, and comprehensive reporting capabilities.

Time tracking

As previously mentioned, time is a valuable commodity. This means keeping track of employee time is essential. First, it’s critical to determine what type of time tracking fits your business.

Are you looking for a way for employees to record their hours - through clocking in and out or using a timesheet?

When choosing time-tracking software like Time-Clock or Time-Sheet, look for features that streamline approval processes, allow for detailed timecard submissions, offer robust reporting tools, send automatic alerts for missed punches and late timecards, and provide the option for IP restrictions. 

Performance reviews

Performance reviews do not need to be a tedious, never-ending task. The HR software makes managing them all in one place easy.

Look for features such as custom templates to match your particular review goals, feedback and goal-setting options, self-review, and review scheduling.

Employee directory & file management

Think centralized employee data. This traditionally paper-heavy task can instantly be digitized and streamlined with core HRIS software. With up-to-date employee information, you can store, manage, and organize employee files without a hitch.

Features to look for include managing multiple locations, custom reports, document uploads and e-signatures, and self-service capabilities.


According to a joint study from Kronos and the Human Capital Institute, 76% of HR leaders say onboarding processes are under-utilized at their company.

But with the right HR software, you can start new hires on the right foot.

Look for features such as creating templates with custom tasks and assigning tasks to new hires or existing employees who aid in onboarding, document upload, and e-signatures. After all, this is the critical process that helps integrate new talent smoothly, so it is best to make it count.

Infraction tracking

No one likes to think about infractions, but improved transparency regarding employee disciplinary action is always positive.

Features to look for: the ability to send, track, and store infractions from one centralized location, manager/HR approval, automatic reminders for outstanding warnings, e-signatures, custom violation types, and consequences.

Things to consider when choosing HR software for SMB

Although your small business’s needs may be precise, selecting the right HR software requires research. Knowing which will best suit your needs is hard with the sheer volume of employee-dedicated software. Consider these factors when determining the best HR software for your business.

Could you get input from others?

Choosing and integrating a new HR system is an important step that will affect everyone using it. It never hurts to get decision-makers input to promote discussion and ensure everyone is on the same page. 

Assess requirements, goals, and budget.

Once the decision-making team is present, it’s time to establish requirements. Determine the must-haves, your budget, and what you hope the new system will achieve.

Be sure it’s user-friendly.

Your HR software must be intuitive and user-friendly so that training time and the learning curve won’t take too long. It’s a definite bonus if your team can set it up independently or if the software provider offers account setup support.

Take remote accessibility into account.

You’ll need to be able to access the system from wherever you are. HR cloud software ensures remote accessibility and scalability, which are vital, particularly in the age of artificial intelligence (AI) and work-from-home.

Software to fit your business

HR software for your SMB should be adaptable to any changes within your business and customizable to your unique policies, protocols, and aesthetics.

Enjoy the new system

In other words, while HR software can make your life infinitely more accessible, your business will not reap all the benefits if not set up and used correctly.

Could you check if your HR software provider offers account setup to help you get the most out of it? Customer support teams are also an excellent resource for maximizing the benefits of your HR software.

Benefits of using HR software for your small business

The advantages of HR software can be genuinely multi-dimensional. To draw it all together, here are some benefits small companies can expect upon adopting HR software.


Okay, you may not see all and know all. Still, you’ll have comprehensive information on all employees and departments at your fingertips, and employees will have access to all information relevant to their duties.

Employee self-service

With HR software for small businesses, employees can verify their available PTO, see upcoming holidays, see when someone is out of the office, and add or edit details in their employee files. This is a much more efficient way of ensuring employee information is up-to-date.

Easier onboarding

HR tools can facilitate new hire onboarding by reducing paperwork, setting up tasks, and ensuring a standard workflow for all new employees.

Staff management

Since everything’s on one platform, it’s easier for small businesses to delegate duties, track progress, and reward employees.


With HR software, roles and the permissions accompanying them are more clearly defined, which helps streamline and smooth out internal HR processes. Furthermore, automating essential tasks helps optimize time and resources.

More meaningful performance assessments

HR software can facilitate more effective and objective performance evaluations and reward systems, raising morale, productivity, and retention. 

Compelling insights

Using HR software helps your small business make more informed and, therefore, strategic decisions. By securing all your data on one reliable platform, you can better understand your business and identify areas for improvement.

PurelyHR empathizes with small businesses because we understand the challenges they face firsthand

We specialize in helping small and medium-sized companies save time on everyday HR by providing industry-leading HR software and resources.

To see if we’re a good fit for your business, start a free trial or book a demo today!


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