HR Software for Small or Midsize Businesses: Do I Need it?

25 Aug 2023

Lauren Hoover

african american professional surrounded by paperwork

Whether you own or manage a business, are part of an HR team, or are an executive looking to boost employee morale, you may have wondered whether you need HR software to streamline your human resources processes.

HR software can be a valuable tool for business owners, HR teams, and the entire organization, helping to automate tasks, improve efficiency, and ensure compliance with employment laws. 

With our 37+ years of experience in human resources, we’ll give you an honest explanation of the reasons why HR software may be beneficial for businesses. On top of that, we’ll provide expert recommendations to assist you in choosing the appropriate HR software options for your business needs.

HR software for businesses, also commonly referred to as Human Capital Management Systems, is a versatile tool designed to streamline core HR processes and seamlessly manage employee data. This software incorporates a wide range of core features and benefits that can automate multiple HR tasks, ultimately optimizing efficiency and productivity within organizations.

One of the primary purposes of HR software is to automate repetitive tasks such as data entry and generating reports, allowing HR professionals to focus on strategic initiatives. It also offers comprehensive employee data management, enabling businesses to store and access essential information easily.

Furthermore, HR software facilitates seamless workflows by integrating various functionalities. It encompasses recruitment and onboarding tools, enabling businesses to attract and hire top talent efficiently. Additionally, it encompasses payroll management, ensuring accurate and timely payment for employees.

Knowing when your business needs a human resource management software solution comes down to many things. Here are a few questions to help guide your decision:

  • Are you struggling with task management, lengthy task lists, or working through repetitive and low-impact administration tasks?
  • Are you managing multiple complex spreadsheets?
  • Are you having a hard time with talent management?
  • Are you lacking team productivity and team collaboration?
  • Are core HR functions taking you away from more important business activities?

The list goes on, but if you answered yes to three or more of these, you may want to consider your options as it relates to HR software. Let’s narrow this down further:

Business Sizes

One of the first things to consider is the size of your business. If you have a small team with only a few employees, you may be able to manage HR tasks manually or with basic tools like spreadsheets.

However, as your business grows and the number of employees increases, it becomes more challenging to handle core HR functions efficiently without specialized software. A human resource management software solution can help you streamline tasks such as employee onboarding, time and attendance tracking, payroll management, and benefits administration.african american professional surrounded by paperwork

As a business grows, so do its HR needs. The manual tasks and complex spreadsheets that once sufficed for managing information in an employee database and administrative tasks become time-consuming and error-prone. This is a good indicator as to when a business needs an HR software solution.

Another indicator is the growth stage of the business. As the number of employees and HR responsibilities increases, it becomes essential to have a streamlined system in place.

HR software provides the necessary structure and automation to handle tasks such as employee onboarding, attendance tracking, and benefits administration efficiently.

Another factor is the need for effective HR leadership. When HR professionals are bogged down with day-to-day HR tasks, they often lack the time to focus on strategic initiatives that can drive employee engagement and business activities. HR software alleviates this burden by automating repetitive and low-impact administration tasks, allowing HR professionals to have the time and tools they need to make a difference.

Implementing HR software not only saves time and money but also extends these benefits to the rest of the business. By automating manual tasks, businesses can operate more efficiently, freeing up employees to focus on driving progress and innovation.

In summary, if your business is experiencing growth, struggling with manual tasks, and needs HR professionals to have the time and tools to make a difference, it’s time to consider implementing HR software. With its ability to save time and money, HR software empowers businesses to streamline their core HR functions and allows employees to concentrate on what truly matters – driving more impactful business activities.

Why small businesses may want HR software

Small businesses can greatly benefit from implementing a human resource software solution. One of the key advantages is the ability to streamline administrative and manual tasks, allowing employees to focus on other important business activities. With HR software, small businesses can automate tasks such as time and attendance tracking, leave management, and storing critical data in an employee database, reducing the time spent on manual tasks and data entry.

In addition to streamlining administrative tasks, HR software can also lead to improved communication and employee feedback within the organization. With self-service features or a self-service portal and mobile apps, employees can easily access and update their own information, eliminating the need for constant back-and-forth communication with HR personnel.

Furthermore, HR software can enhance employee engagement. By providing a user-friendly platform for employees to access information, participate in company-wide discussions, and provide feedback, human resource management software fosters a culture of transparency and collaboration.

Lastly, a human resource software solution can contribute to successful recruiting efforts. With tools like applicant tracking systems and job posting capabilities, small businesses can efficiently attract, screen, and hire top talent. The streamlined recruitment process not only saves time and resources but also ensures that the right candidates are identified and onboarded effectively.

It’s easy to see how implementing HR software in small businesses can be crucial for streamlining administrative and manual tasks, improving communication, enhancing employee engagement, and achieving successful recruiting outcomes.

Lauren Hoover

Lauren is the Senior Content Marketing manager at PrimePay. She is a skilled agile marketer with a proven record of executing content on a wide scale. Lauren graduated with a business marketing degree in May 2020 from Penn State University.