A Guide to HR Software for Small Business

Guide to HR software for small business

Let’s face it: time is a valuable resource, and chances are you spend a lot of it dealing with distractions, putting out fires, and chasing paperwork. Whether you’re an HR manager, small business owner or multi-tasking employee, integrating the right tools into your business can be a real game-changer. This is where HR software for small business comes in!

Not only can HR software simplify and facilitate HR-related tasks by providing a platform designed to make managing data easier, but, most importantly, it can free up time. Managers and business owners can find time to plan, strategize, and actually focus on the bigger picture, whatever that may mean to their business.

What is HR Software?

HR software (sometimes known as an HRIS or HRMS) helps digitize, automate and simplify common HR tasks like vacation tracking, time tracking, performance reviews, employee file management, onboarding, employee displinary tracking, and other functions.

Many small businesses may hesitate to invest in HR software because it seems beyond their budget. Others assume it’s better suited to big business. Others find that it sounds too complex, and so forego considerations altogether. The good news is, HR software for small business does not have to break the bank. And, while it may seem complex, it’s expertly designed to simplify.

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Here’s how HR 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. Common features of leave management software (including Time-Off): access to balances, customizable time-off types and policies, simple request and approval process, shared company calendar, reporting.

Time tracking

As we’ve said, time is precious. This means keeping track of employee time is essential. First, it’s key to determine what type of time tracking fits your business. Do you want employees to clock in and out or do they track hours on a timesheet?

Next, here are some features to consider when choosing time tracking software (like Time-Clock or Time-Sheet): simple approval and timecard/timesheet submission process, detailed reports, automatic notifications for missed punches and overdue timecards/timesheets, IP restrictions.

Performance reviews

Performance reviews don’t have to be an arduous, never-ending task. For starters, software makes it so you can easily manage it all in one place. Specific features to look for: custom templates to match your specific review goals, feedback and goal-setting options, self-review, 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 at your fingertips, 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, 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 off on the right foot. Features to look for: the ability to create templates with custom tasks, assign tasks to new hire or existing employees who aid in onboarding, document upload and e-signatures. After all, this is the key process that helps integrate new talent smoothly, so best to make it count.

Infraction tracking

No one likes to think about infractions but improved transparency is always positive when it comes to employee disciplinary action. 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 your small business

Although your small business’s needs may be clear, choosing the right HR software requires some research. With the sheer volume of HR-dedicated software out there, it’s hard to know which one will best suit your needs. Here are a few things to consider when making your decision.

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 the input of decision-makers to promote discussion and make sure everyone’s on the same page. 

Assess requirements, goals, and budget

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

Be sure it’s user-friendly

It’s very important that your HR software be intuitive and user-friendly so that training time and the learning curve won’t swallow up too much time. It’s a definite bonus if your team can set it up on their own or the software provider offers account setup support.

Take remote accessibility into account

Chances are, you’ll need to be able to access the system from wherever you are. Cloud software ensures remote accessibility and scalability, which are key, particularly in the age of COVID.

Software to fit your business

HR software for your small business should be adaptable to any changes within your business as well as customizable to your unique policies, protocols, and aesthetic.

Love thy new system

In other words, while HR software can make your life infinitely easier, if not set up and used properly, your business will not reap all the benefits. Check to see if your HR software provider offers account setup to help you get the most out of it. Customer support teams are also a great 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 truly multidimensional. To draw it all together, here are some of the benefits small businesses can expect upon adopting HR software.


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

Employee self-service

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

Easier onboarding

HR software can make onboarding new hires easier by facilitating paperwork, setup tasks, and ensuring there is a common 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 are more clearly defined—as are the permissions that accompany them—which helps with streamlining and smoothing out internal processes. Plus, automating key tasks saves time and effort.

More meaningful performance assessments

HR software can facilitate more effective and objective performance evaluations and reward systems that in turn raise morale, productivity, and retention. 

Compelling insights

Using HR software helps small businesses make more informed, and therefore strategic decisions. By securing all your data on one reliable platform, you gain a better understanding of your business. You are also better equipped to identify areas for improvement.

PurelyHR understands small businesses because we are one. We specialize in helping small and medium-sized businesses 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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