HR software for small businesses

What is HR software and how can it benefit your business? Read our guide to HR software systems, choosing the best solution for your business size, and learn more about our tailored solution for small businesses from 1 - 400 employees.

What is HR software?

HR software systems are a type of HR technology solution for managing employees. They can vary in focus and complexity, with suitability depending on the needs of the business. UK businesses of all industries and sizes have been adopting online Human Resources software to replace older systems – such as spreadsheets and calendars – to modernise how they manage core HR processes, keep employee data accurate, and ensure HR documentation is securely accessible.

Myhrtoolkit is a leading HR software solution for SMEs, with over 1,300 companies using our software to streamline their HR processes and manage staff more effectively. If you're interested in trying a solution tailored for small and medium-sized businesses, you can book in a free trial with us:

Security centre (laptop) - cropped

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What benefits does HR software provide?
  • Cost savings: save the time and money your business spends on HR admin and repetitive processes with the automation and self-service options HR software can provide.
  • Increased efficiency: by swapping filing cabinets and spreadsheets for a software solution, you can work more efficiently on HR admin with the information you need at your fingertips.
  • Accessibility: an online solution makes it easier for anyone with the right permissions to access the HR data they need regardless of their location; this is especially useful for hybrid and remote teams.
  • A digital paper trail: document management features make HR software indispensable when it comes to tracking HR processes and demonstrating compliance.
  • Data security: the data you keep on employees often includes sensitive information – HR software helps keep data secure with access levels, passwords, and multi-factor authentication (MFA).
  • Employee engagement: get employees actively engaged with HR, from updating their information, to making holiday requests, to reading and confirming documents.
HR software for small UK businesses

Cloud HR software

Many businesses are choosing to have a cloud HR software solution instead of an on-premises option, because cloud-based systems are more flexible and cost-effective. Cloud HR software solutions are particularly useful for small businesses on a budget, as they don’t require internal IT support and don’t involve a big upfront investment. They’re also a desirable option for businesses with remote and hybrid staff, as an HR software system can be securely accessed from anywhere as long as the user has an Internet connection.

How to choose the best HR software

There are many options in the HR software UK market alone, which can make it difficult – particularly for first-time buyers – to know which solution will fit their business best. Here are a few tips on HR software solutions for different types of businesses:

1. HR software for small businesses

Microbusinesses (with 1-5 employees) may want to consider a free HR software solution if they are on a very tight budget, but any small business growing in numbers or complexity should check out some of the more advanced options on the market to help them save money on HR admin and headaches in the long run.

There are many affordable, cloud-based HR software solutions for small businesses sometimes referred to as core HR software, as they offer the core features a small business would need, such as recording employee holidays and absences, health and safety, performance management, tracking training, and creating reports. Read our guide How can HR software save money for your small business? to learn more.

2. HR software for medium businesses

When your SME has reached the more medium end of the scale, this may again change what you require from a software system, though other factors can affect this too (for instance, if you have staff with a variety of working patterns). Our article on 3 essential HR tools for growing SMEs can tell you more about suitable HR software solutions for upscaling businesses.

3. HR software for enterprise businesses

For larger organisations that have gone beyond the SME bracket, often a more bespoke HR software solution is the appropriate choice. This will cost more to implement and upkeep, but can be worth it for enterprise organisations looking for a more tailored solution. 

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Myhrtoolkit: HR software created for small to medium sized businesses

Our complete HR software solution for SMEs was initially developed in 2005 with the needs of small and medium sized businesses in mind from the very beginning. For over 15 years, we have been improving and building on our software system, myhrtoolkit, for a growing base of over 1,300 small business customers, becoming one of the most popular solutions for SMEs looking to improve on their HR and compliance processes.

But don’t just take our word for it – we love to get feedback from our customers, including several case studies and reviews:

CJCH Solicitors improve HR compliance with myhrtoolkit

CJCH Solicitors is a modern legal practice with five offices in the United Kingdom and representation across the globe. We spoke to Operations Manager, Lianne Welsh about how the myhrtoolkit system has helped them develop a more consistent and compliant approach to HR management.

Read more

Eye and Dental Clinic see the benefits of software for staff management

Eye and Dental Clinic provide dental and eye care services in Lancashire. We spoke to Practice Manager, Kirsty Barnes about how using the myhrtoolkit HR software system has helped the practice streamline their staff management processes with employee welfare as a focus.

Read more

Soho Theatre gives myhrtoolkit a standing ovation

Soho Theatre is a vibrant London theatre venue. The theatre’s Head of Finance and Administration, Catherine McKinney, has found myhrtoolkit to be a key component for their admin and staff management activities.

Read more

Keeping your data secure with myhrtoolkit

Data security is paramount to our company and our software. As an ISO 27001 accredited software provider, we make the data security of our customers a business-critical priority, and our software helps SMEs make the security of their sensitive employee data a priority too.

Top HR software features for SMEs

Holiday management HR software feature
Holiday management
Manage holiday requests, update entitlements automatically, and oversee time off on an up-to-date calendar
Absence management HR system feature
Absence management
Record and monitor sickness and other forms of staff absence with attendance charts and in-depth reporting
Document management HR software feature
Document management
Securely store employee and company-wide HR documents and track when documents have been opened and read
Performance management HR system feature
Performance management
Monitor performance and schedule timely appraisals to develop your employees and drive productivity
HR training tracking software
Training management
Track group and personal staff training attendance with a comprehensive training course database and built-in reminders
Pay and benefits software system
Pay and benefits
Manage staff pay and benefits information with full control and visibility
Health and safety software feature
Health and safety
Capture critical information and promote wellbeing with custom health and safety forms and an electronic accident book
HR reporting software
HR reports
Generate reports to help you make better decisions based on data and connect with your employees
Secure HR software
Security Centre
Create secure passwords, restrict access levels, and use MFA to protect sensitive employee information
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HR software FAQ

There’s a lot to learn when it comes to purchasing an HR software system! Here we’ll answer some of the most common questions buyers have while researching HR software solutions:

What are the different types of HR software? (HRIS, HCM, HRMS)

There are a few different terms out there when it comes to types of HR software systems. The main types of HR software are:

  • HRIS: Human Resources Information System. This type of HR software system has a focus on employee data storing and management. HRIS initially had a focus on electronic filing and record-keeping and filing as an alternative to paper filing systems, but these systems have since become more holistic for many core aspects of HR management and strategic decision-making based on data and reporting, with businesses making more use of their HR information.
  • HRMS: Human Resources Management Software. There is quite a lot of crossover between HRIS and HRMS, except an HRMS tends to have a wider range of features and more options to make the system bespoke (though this can come at a higher price and a longer, more complex implementation period).
  • HCM: Human Capital Management. HCM systems tend to be far more complex and bespoke than HRIS or HRMS solutions, covering different aspects of the entire employee lifecycle, such as recruitment and talent management, employee engagement, and retention strategies. HCM systems tend to suit larger, enterprise-level organisations.

When should a business get HR software?

We recommend getting an HR software solution as soon as you start to recruit employees! This is because HR software can help you accurately record and securely store the employee data and HR information you need and make sure your processes are consistent, helping you avoid any communication or compliance issues further down the road.

Why is HR software important for SMEs?

Especially as your small business grows and size and/or complexity, it’s so important to have a robust HR system in place for tracking core areas such as holiday management, absence monitoring, performance, training and development, pay and benefits, disciplinaries and grievances, and health and safety. HR software helps you manage these activities more efficiently and consistently, storing the information and evidence of compliance that your business needs within a secure system.

How much does HR software cost?

This will vary from provider to provider, depending on the complexity of the solution they offer. Check out our pricing structure for an idea of how much HR software can cost based on the size of your business. Our pricing includes all the features of our software as standard. We also offer an optional premier setup service for new customers who are looking to save time on setup.

Is HR software secure?

This all depends on the provider! When researching HR software solutions, make sure to check if the provider has recognised security accreditations, such as ISO 27001. You should also be looking at the security measures the software has in place, how the providers are approaching GDPR regulations, where the software is hosted (for example, myhrtoolkit is hosted by Google Cloud Platform), and their commitment to data security. HR platforms often hold sensitive staff data, so it's important to choose a secure provider.


Learn more about HR software

Ready to adopt an HR software system for your business? We offer a 14-day free trial so you can get a feel for the software and how it can help your organisation thrive with HR. Find out more by booking in a discovery call with our friendly and knowledgeable Sales team:

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Learn more about choosing the right HR software

Want a more in depth guide on how to choose the right HR software for your business? Myhrtoolkit's Founder, Jon Curtis took part in this webinar panel on this topic with other HR software experts.

Watch the webinar here to learn more: