5 Best HR software for 2021: a guide for small businesses Today’s business owners have more HR responsibilities than ever before. So how can smaller firms cope with the demand? We review the top 5 HR software systems for SMEs to help you find the best on the market. Helena Young September 9, 2021 11 min read Our experts We are a team of writers, experimenters and researchers providing you with the best advice with zero bias or partiality. This article was co-authored by: Helena Young Writer Robyn Summers-Emler Deputy Editor 0 out of 0 backward forward Type of software: Rating out of 5: Best for: VerdictBest all-round optionCitrusHRGustoDeputyZoho PeopleJazzHRHRMSHRMSHCMHRISHRIS220.127.116.11.4List of featuresPayroll toolsShift schedulingAffordabilityRecruitmentGreat all-in-one HR solution with a gentle learning curve. CitrusHR is best for teams new to the technology and with more than eight employeesSmall firms with a need for strong payroll tools – such as those with a lot of freelance staff – will find Gusto the best choiceExcellent scheduling features make Deputy the best staff management solution for industries with shift work, such as retail and hospitalityBudget-conscious SMEs, that are new to HR software, will find Zoho People an excellent, low-cost HR tool to get started withJazzHR is a brilliant specialist tool for larger teams with over ten employees that want to improve their recruiting processSave time and fill in our simple form to find the best HR provider for your company Compare We think the number one HR software for small businesses is CitrusHR. It gives the best value for money with all priorities covered, at a very generous price. HR software has replaced the need to hire a HR manager, dramatically improving efficiency in areas like recruitment, payroll and employee profiles; and removing pressures on IT and admin.But it’s an incredibly busy market, with a lot of brands shouting about being the best choice. How do you know which is the right system for you?The following software comparison page will take you through the top five brands for small businesses; outlining their pros, cons, and pricing plans, as well as a helpful FAQ to give you all the answers you need.If you’d like to save on time and get straight to finding the right system for you, use our online cost comparison tool to compare free provider quotes by answering a few simple questions. It’s free and easy, and tells us everything we need to work out which is the best HR software for your small business. This article will cover: HCM, HRIS, or HRMS - what's the difference? The top 5 HR software solutions for small businesses HR software comparison - what features do they offer? HR software cost comparison - which is the best value for money? How did we choose the top 5 HR software solutions for small businesses? Best HR software solution: our final verdict FAQs HCM, HRIS or HRMS – what’s the difference?Before we get started, you need to know about the three types of software for HR: HRIS, HCM, and HRMS. Because of their similarities, and the way some brands market themselves, it can be difficult to distinguish between the three.Put simply:Human Resource Information Systems (HRIS) focus on storing employee-related information. They tend to lack more advanced functions, like reporting or analytics and are typically foundational – meaning you can build them up with add-ons and other customisable elements.Human Resource Management Systems (HRMS) are also known as Core HR. They grew from HRIS in the early noughties and are essentially a more comprehensive version than the latter, combining all functions into one intergrated suite.Like HRMS, Human Capital Management (HCM) systems usually have enough functions to manage the entire lifecycle of an employee. However, HCM tools tend not to include payroll tools – instead used alongside third-party accounting software. Is there an alternative to HR software?HR management presents a lot of complex challenges. If you’d rather not take responsibility for your people team functions, then outsourcing them to an external firm is another good option. Read our recommendation for the best HR consultancy firms for SMEs.The right provider could give you access to expert advice and knowledge, eliminate any issues caused by a steep learning curve, and increase your organisation’s overall efficiency. To find out more, read our comprehensive guide to HR outsourcing for small businesses. The top 5 HR software solutions for small businessesCitrusHRBest for: Features 4.6 out of 5 Ease of use 5 Price 4 Features 5 Compare CitrusHR is an easy-to-use HRMS software tool with a strong all-round set of features. It is most suited to businesses with more than eight employees that may be light on existing business software and want an all-in-one HR solution.CitrusHR’s highest payment plan (HR Support Service) also offers excellent customer service support from HR professionals for those occasions where you might need advice on more serious issues. This form of HR outsourcing provides a number of ready-made HR policies – a reassuring and unique selling point.FeaturesCitrusHR has a wide range of features with all of the core essentials covered. Its lowest-tiered plan, HR software-only provides:Activity dashboardBenefits managementPayroll managementThird-party integrationsOnboardingLearning and developmentRecruitment managementUser reviews have criticised CitrusHR’s annual leave monitoring. Reported occasional glitches have led to incorrect balances for some users – something to keep an eye on.PricingCitrusHR’s pricing is split into two payment plans. HR Software-only costs £2.50 per user and there is a minimum cost of £20 per month, which works out to a required eight users per month.You’ll need to purchase HR Support Service for access to the Citrus support team, which costs an initial flat charge of £50 per month – plus £7 per employee. HR software-onlyHR support-servicePrice per month, per employee £2.50£7 per employee (+£50 flat rate)UsersMinimum of eightUnlimited VerdictCitrusHR’s simple interface and powerful list of tools make it a great all-in-one HR software solution for small businesses with more than eight team members. GustoBest for: Payroll tools 4.3 out of 5 Ease of use 5 Price 3.5 Features 4.5 Compare It may be one of the newest HR software brands on the market, but when it comes to payroll tools, Gusto has firmly cemented itself as a favourite among small businesses. This HRMS provides accurate and compliant payroll software with top-notch security features. In terms of customer service, Gusto also performs well, providing phone, email and live chat support options. The platform walks you through the onerous task of payroll setup – helping you to avoid the common errors that can plague SMEs.FeaturesGusto scores highest for remuneration tools, with unlimited payrolls for any payment tier. The platform also boasts sophisticated paysheet add-ons like multiple pay schedules, allowing you customisable payment terms to send wages to your employees. Plus, Gusto also has good functionality for other HR areas.Unlimited payrollsTwo-day direct depositTime-off tracker and reportingAccounting integrationsHealth benefits administrationEmployee onboardingBy far the most common criticism of Gusto by users is that it doesn’t have a mobile app – something to consider if you want to be able to manage your payrolls away from the desk.PricingGusto has three pricing tiers available: Core, Complete or Concierge. Gusto Core costs £28 as a flat rate charge, plus £4.30 per added employee. This means that a company with 10 employees would spend £71 per month.Gusto Complete is only marginally more expensive at £8.60 per extra employee. If you have the funds available, we think this higher-tiered plan is worth the added cost for small teams with fewer than ten employees. Added benefits include next-day direct deposits, automated payroll sync and employee time tracking. CoreCompleteConciergeCost per month, billed annually£28 plus £4.30 per employee£28 plus £8.60 per employee£107.05 plus £8.60 per employeeUsersUnlimitedUnlimitedUnlimited VerdictGusto’s payroll functionalities make it a great HR software for small businesses, especially for firms working with a lot of freelancers. For teams with fewer than 10 employees, we’d recommend Gusto Complete. Use our form for a quicker, simpler way to finding the right HR software. Have you used HR service providers before? Yes No It only takes a minute, DeputyBest for: Shift scheduling 4.1 out of 5 Ease of use 4.5 Price 4 Features 4 Compare If you’re working in an on-site industry – such as retail, hospitality, events, and construction – it can feel like there aren’t many great software options for firms that aren’t office-based. That makes Deputy, a multi-award winning HCM system, the resolute winner for staff management. Its easy-to-use timesheet and time clock software allows for easy shift scheduling and real-time updates. Deputy also integrates with over 300 leading payroll and POS software brands, plus it has an iOs and Android app, so you can manage your staff and send updates from anywhere.FeaturesDeputy’s features are centred on management and time tracking, where it easily outranks the rest of the field. That being said, it is lacking a lot of core HR features – particularly around performance management and recruitment. Users will probably require third-party integrations for these areas. The Deputy Premium plan has:RemindersReporting & StatisticsAutomated schedulingEmployee onboardingPayroll managementPricingFor affordability, Deputy scores highly at just £1.50 per user for its Scheduling plan or Time and Management plan (counted as any employee, administrator or supervisor that uses the software). However, to get the best out of Deputy, we would recommend the Premium plan. At just £3 per user, per month it combines all the features in the lower tiers for both time and scheduling – plus, as it offers unlimited users it’s suitable for teams of all sizes. SchedulingTime and ManagementPremium EnterprisePrice per user, per month (billed monthly)£1.50£1.50£3 Contact salesUsersMinimum of 7Minimum of 7Unlimited Unlimited VerdictDeputy has excellent time and scheduling features, and is best suited to small businesses based in industries with a need for shift scheduling, such as retail and hospitality. Zoho PeopleBest for: Affordability 4 out of 5 Ease of use 4 Price 5 Features 3 Compare Part of the well-known suite of Zoho software products, Zoho People is an affordable cloud-based tool that serves as a great starting point for firms that are new to HR management software and want to trial a product without risking their budget.Zoho People can be best described as an HRMS platform. Like many of the other brands featured in this list, the platform’s interface is structured using a centralised dashboard format, where users can find quick access to essential employee and company information. Users can drag-and-drop various widgets to customise their view, letting managers instantly see updates on everything from birthdays to timesheet reports.FeaturesZoho People has a strong focus on core functions, scoring exceptionally well in hiring and onboarding new employees. Training functions are also available including an online learning portal for blended learning, and discussion forums for employees to learn together. Performance management is another strong point for the platform. Work can be tracked using tools like goals and self-appraisals – although these advanced tools are only provided in the more expensive payment tiers.Zoho’s Essential HR plan offers:Holiday approvalsAn employee databaseMobile appEmployee onboardingWorkflow checklist and tasksUnlimited usersThe area of HR where Zoho People underperforms is payroll. Only companies based in India can integrate with the brand’s other platform, Zoho Payroll, meaning a third-party integration is necessary for paysheets and wage management.PricingZoho People is easily the most budget-friendly HR software in this list. Its lowest-priced payment tier costs just 83p per user – unusually generous given it allows for unlimited users. Handily, Zoho People is also the only top HR software on this list that allows you to buy employee profiles for just 25p per profile (defined as accounts that don’t need access to the system). FreeEssential HRProfessionalPremiumEnterprisePrice per user, per month (billed annuallyFree83p£1.50£2.50£4UsersUp to 5UnlimitedUnlimitedUnlimitedUnlimited VerdictZoho People is a great option for new starters looking to trial an HR software solution without overspending. For a long-term, cost-friendly solution, managers should choose the platform’s Professional plan to get more than just the core features. JazzHRBest for: Recruitment 3.8 out of 5 Ease of use 4 Price 4.5 Features 3 Compare According to the 2019 Work Institute Retention Report, 27% of workers leave their jobs voluntarily each year.Hiring and attracting new talent is a major aspect of HR, and one where many small businesses waste a lot of resources – often outsourcing tasks to recruiters to save time. JazzHR is a great HRIS software option to maximise productivity in this area, functioning particularly well for larger teams with more than ten employees.Structured around a user-friendly activity dashboard, this powerful tool replaces time-wasting manual hiring processes like spreadsheets. Its intuitive and customisable HR system helps recruiters and hiring managers to source qualified candidates more efficiently, by giving you a great range of features to design your own way of viewing employee data.FeaturesJazz HR’s features are designed to be added or removed, so you can pick and choose how complex you want your user experience to be. Social media integrations mean you can find and contact new talent leads easily using apps like Facebook and LinkedIn. The system also has a calendar where you can quickly view your day-to-day tasks, as well as tracking candidates through the interview process.Its lowest-priced payment plan, JazzHR Hero, includes: Applicant Tracking Application Management Resume database Resume search Background Screening Calendar Management Calendar SyncGiven that JazzHR specialises in the recruitment and hiring processes, there are obvious limitations to its employee management capabilities. There are a few basic features missing, like mass emailing, that some users will require. We would suggest CitrusHR for those looking for an all-in-one system with more capabilities.PricingJazzHR’s pricing uses a flat rate charge for unlimited users, meaning it could be an expensive investment or an absolute steal, depending on your team size. For SMEs, the Hero plan offers the greatest value for money at £27.91 per month, billed annually. That works out at just £3.48 per user for a team of eight. HeroPlusProPrice per month, billed annually£27.91£163.86£242.58UsersUnlimitedUnlimitedUnlimited VerdictFor teams wanting to focus on recruitment, and with more than ten employees, JazzHR is an easy-to-use and customisable system to streamline your business’ hiring process. HR software comparison – what features do they offer?There are six features that are especially important to consider when choosing which HR software is the optimum choice for your company: Time & Attendance Performance Management Compensation Management Onboarding Employee Profiles Applicant TrackingThese are important to consider when choosing the right system as you will probably use these the most across your firm’s various HR functions. For example, if you’re lacking a training platform for new starters and would like to host those materials within your HR software, then it would be a sensible decision to choose the option that provides this.We compared the top five HR brands featured in this list to the above six criteria to see how they would perform against each other: CitrusHRGustoDeputyZoho PeopleJazzHRTime and management✓X✓✓XPerformance management✓XXXXCompensation management✓✓✓✓XOnboarding✓✓✓✓XEmployee profiles✓✓✓✓✓Applicant tracking✓X✓✓✓As the chart shows, CitrusHR is the leading all-round option for HR software as the only brand to have all six criteria – plus, it is the only brand in the list to provide Performance Management functions for HR departments.JazzHR scores the most poorly, with only two categories met – although this is reflective of its specialist focus on recruitment. HR software cost comparison – which is the best value for money?Because of the way Gusto is priced (£28 per month plus £4.30 per additional user), we have compared each brand based on cost for a team of five employees.As expected, Zoho People scores highest on affordability, costing just £4.15 in total per month, for a team of five – although it should be noted that this is for the platform’s very basic Essential HR plan.Jazz HR’s monthly billing cycle means it is too expensive for solo users. However, its generous offer of unlimited users means that growing teams could easily see the platform rank highest for value for money. Katy McMinn is co-founder and director of HRi, a support body for self-employed HR professionals. McMinn told us: “There are a number of HR software systems out there, with some targeting the SME market and others aimed at larger, more complex organisational structures. Whilst it may be tempting to go for the cheapest or simplest system as a startup, it’s important to think about where you are on your business journey, and indeed, where your growth plans might take you long term. If you have aspirations to grow into a much larger organisation, then it is worth investing in a system early on that can support you as a smaller organisation.” SMEs are often contending with strict budgets. If cost is a big factor in your search for the right HR software solution, use our specially-designed tool to compare quotes from the top HR providers. How did we choose the top 5 HR software solutions for small businesses?Today’s HR departments need to be able to perform more jobs than ever before. The majority of administrative duties now come through human resources, so it can be difficult to work out which brand will perform best for your business’ specific requirements. Stacey Kane is the Business Development Lead at Easy Merchant, an online drainage and pipework supplier. Kane has ten years experience in HR, and told us: “Many repetitive and administrative-intensive processes in HR, such as yearly evaluations, authorizing holidays, verifying absences, and so on, can be automated by using HR software, making the entire process more efficient and less time-consuming. Before choosing HR software, you must first assess your current HR frustrations. Focusing on the areas that require improvement will allow you to restrict your options and eliminate the potential of spending money on a product that will not meet your goals.” Using our expert knowledge of the HR software industry, we came up with a list of the five most common duties and requirements for SMEs when it comes to managing personnel. Then, we picked out the highest-rated HR software for each category and matched them as appropriate.These were:AffordabilityList of featuresPayroll toolsRecruitmentShift scheduling Best HR software solution: our final verdictThis list has taken you through the top five HR software options for small businesses, based on a specific list of criteria drawn from the common pain points for SMEs when managing employees.For the best HR software for features, choose CitrusHRCitrusHR is a great all-round option for small businesses with more than eight employees. Plus, a gentle learning curve means it’s quick to get started.For the best HR software for payroll tools, choose GustoGusto is an outstanding HR software tool which covers all your core payroll needs, as well as providing some other sophisticated accounting features.For the best HR software for shift scheduling, choose DeputyAn excellent all-in-one platform for employee scheduling, time and attendance tracking (digital time clock), and tasking, Deputy is the number one choice for non-office-based SMEs.For the best HR software for affordability, choose Zoho PeopleZoho People serves as a fantastic entry into HR software, thanks to its generous pricing plans and focus on core features.For the best HR software for recruitment, choose JazzHRIt doesn’t perform amazingly for other HR functions, but JazzHR is unparalleled when it comes to recruitment tools - often a laborious process for SMEs.Overall, we recommend CitrusHR as the number one HR software tool for small businesses. It scores well on cost, provides excellent customer support, and has features for all six of the main functions required from an HR department.Looking for a closer comparison of the top HR providers? Our online comparison tool can help, by giving you a bespoke recommendation for the perfect HR tool based on your specific business needs. It’s quick, easy, and completely free of charge. FAQsWhat is cloud-based HR software?Put simply, cloud-based HR software refers to a tool that you can access through the internet. Cloud applications have significant advantages over desktop software as they tend to have shorter installation times, greater access to IT support, and are vastly simpler to upgrade. Because of this, they have quickly become popular with business leaders – PwC's 2020 HR Technology Survey found 44% of talent managers think cloud-based solutions increase their productivity.Cloud-based HR software also tends to be cheaper than purchasing traditional desktop HR software as it requires less storage, which is why many SMEs opt for cloud HR software and a lower monthly subscription cost.What is the best HRMS system?HRMS systems have the widest scope when it comes to HR functionalities, encompassing not just employee data storage, but other requirements including payroll processing and training services. CitrusHR performs all of these functions easily for a fairly low cost, making it excellent value for money. As HRMS systems promise, it is a great all-round solution for companies wanting one tool that can perform every role in the HR department.What is the best HRIS system?HRIS systems are, generally speaking, a simplified version of HRMS. They tend to focus on employee data and are a great platform for finding and storing information. We think Zoho People is the best HRIS system in this list. JazzHR is a great HRIS system for recruitment, but it is lacking in other areas, like reporting. Zoho People is a great employee database that allows you to add-on elements for other functions, combining a number of processes to help small businesses meet core HR needs.What is the best HCM system?Deputy is a fantastic and nifty solution for SMEs wanting the top HR tool for organising their employees and tasks, thanks to its great scheduling and time tracking features. As a human capital software, it can tell you when staff are most needed, as well as giving you insights into their time worked and productivity. Plus, as a HCM it works well for growing tea Share this post facebook twitter linkedin Tags News and Features Helena Young Writer Helena is from Yorkshire and joined Startups in 2021 from a background in B2B communications. She has previously written for a popular fintech startup covering everything from money-saving tips to cultural reviews. She is particularly interested in project management software and the films of Peter Jackson.