Start by being clear about the problem you are trying to solve. Think about what takes the most time or causes the most friction in the company. Also consider the size of your team, because many HR tools target fast-scaling businesses, not small teams.
Find the right HR software for your small business
HR software for UK small businesses
The right HR software can save time, reduce admin and help prevent costly mistakes by simplifying payroll and streamlining hiring.
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Breathe HR
Price
Custom
Payroll
Yes
Absence management
Yes
Document management
Yes
Trustpilot score
4.0/5
More Information
Key features
- Centralised core HRIS & employee database
- Absence and holiday management
- Performance management
- document management and reporting
Eligibility
| Recommended for | SMEs looking for a simple, cost-effective and intuitive core HR admin solution |
| Not recommended for | Larger enterprises or those requiring complex customisation and in-system payroll processing |
| Integrations | Open API with direct integrations for Xero and Outlook |
employment hero
Price
From £0.00 per month per employee
Payroll
Yes
Absence management
Yes
Document management
Yes
Trustpilot score
4.0/5
More Information
Key features
- All-in-one HRIS
- Integrated UK payroll
- Benefits admin
- Recruitment (ATS)
- Employee engagement tools
- Global teams (EOR)
Eligibility
| Recommended for | SMEs seeking a comprehensive, all-in-one platform. |
| Not recommended for | Very large enterprises with highly complex, multi-entity needs. |
| Integrations | Connects to accounting (Xero), communication (Slack), and more via its app marketplace and open API. |
HiBob
Price
Custom
Payroll
Yes
Absence management
Yes
Document management
Yes
Trustpilot score
4.4/5
More Information
Key features
- Modern core HRIS
- Performance and goals management
- Engagement surveys
- Onboarding workflows
Eligibility
| Recommended for | Mid-sized, dynamic companies focused on employee culture. |
| Not recommended for | Small businesses needing a simple, low-cost solution. |
| Integrations | Integrates with Slack, Teams, Jira, Greenhouse, major SSO providers, and global payroll partners. |
Moorepay
Price
Custom
Payroll
Yes
Absence management
Yes
Document management
Yes
Trustpilot score
4.6/5
More Information
Key features
- Managed payroll services
- Integrated HR software
- HR and Employment law advice
- Absence management
Eligibility
| Recommended for | Businesses wanting to outsource payroll and HR compliance. |
| Not recommended for | Companies seeking a modern, self-service HRIS focused on employee engagement. |
| Integrations | Integrates with accounting and time & attendance systems to ensure seamless payroll data flow. |
BrightHR
Price
From £3.00 per month per employee
Payroll
Yes
Absence management
Yes
Document management
Yes
Trustpilot score
4.8/5
More Information
Key features
- Absence and holiday planning
- Rota and scheduling
- Time and attendance app
- HR compliance advice
Eligibility
| Recommended for | SMEs needing strong HR compliance and absence management. |
| Not recommended for | Companies or those requiring in-depth talent management tools. |
| Integrations | Connects to accounting software for payroll data and offers partner apps to extend core HR features. |
What is HR software and how does it work?
HR software is a digital tool that helps businesses manage their employees and HR tasks in one place. You can use it to handle staff records, payroll, onboarding, compliance and holiday and absence tracking, saving time and reducing manual errors.
Businesses of all sizes and structures can use HR software, including startups, SMEs and larger companies, although very small businesses may not need it.
Why small businesses use HR software
Some of the key benefits of using HR software include:
Saves time – HR software automates manual and repetitive tasks, such as payroll and holiday requests, reducing paperwork and saving your business time
Helps you stay compliant – It keeps employee records organised and up to date, supporting statutory requirements and reducing the risk of costly mistakes
Streamlines hiring and onboarding – HR software manages job applications, contracts and new-starter processes, making it easier to employ someone
Consolidates employee information – All details are kept in one place, recorded consistently and held securely
Visibility of workforce – You have clear insights into headcount, absence, costs and trends, so you can plan and manage staff effectively
HR software automates manual and repetitive tasks, reducing paperwork and saving your business time"
Key HR software features explained
When you come to compare HR software platforms, consider the following features:
Employee database management
Your software should be a central place to store employee details, contracts and policies. Managers and employees with the right permissions can usually access these documents.
Payroll and tax automation
Most HR platforms either include payroll or integrate with external payroll software, so that changes to pay, hours or tax status feed though automatically. This reduces the risk of errors.
Holiday and absence management
Employees can request annual leave or other absences through the system, with approvals automatically updated. This helps managers and HR staff track who is off and when.
Recruitment and employee onboarding
Many systems include applicant tracking, interview scheduling and onboarding information for new starters, such as collecting documents and issuing contracts digitally.
Benefits administration
If you offer employee perks such as private healthcare, a cycle-to-work scheme or pension contributions, look for tools that help you set them up and track them easily.
Performance management
Seek out tools that help you to set objectives, run appraisals, track training and record feedback. You may also be able to book one-to-ones and recognise achievements.
Compliance and reporting
Many platforms offer reminders, reports and audit trails to help you keep an eye on the company’s performance and stay compliant with employment law and data protection.
Self-service
Some platforms provide portals or apps for employees to update personal details, view documents, book annual leave, view payslips and manage expenses.
How to choose the best HR software for your small business
1. Assess your HR needs
Start by being clear about the problem you are trying to solve. Think about what takes the most time or causes the most friction in the company. Also consider the size of your team, because many HR tools target fast-scaling businesses, not small teams.
2. Prioritise essential features
Think about the features you genuinely need and those you could do without. There’s no point paying extra for add-ons you won’t use. For example, you might need to get better at tracking absences but have no real need for advanced performance management tools.
3. Consider integrations
Also consider whether the software integrates with your payroll or accounting software, or any benefit providers your business already uses. Are integrations included or do you need to pay extra to access them?
4. Assess your budget
Decide how much you wish to spend per month or per year on HR software. Then divide this by the number of employees within your organisation so your figures align with many pricing models. Will you need to pay more to access more features in the future?
5. Consider ease of use and support
Think about how easy it is to navigate the HR software and what support is available. Can you contact someone by live chat or over the phone? When is this support available and are response times realistic for small employers?
6. Make the most of free trials
Once you’ve narrowed down a shortlist of providers, take advantage of any free trials on offer. This helps you gauge how easy it is to operate the platform before you commit. Use the trial period to test all the features available, not just some of them.
How to choose the best HR software for your small business
1. Assess your HR needs
2. Prioritise essential features
Think about the features you genuinely need and those you could do without. There’s no point paying extra for add-ons you won’t use. For example, you might need to get better at tracking absences but have no real need for advanced performance management tools.
3. Consider integrations
Also consider whether the software integrates with your payroll or accounting software, or any benefit providers your business already uses. Are integrations included or do you need to pay extra to access them?
4. Assess your budget
Decide how much you wish to spend per month or per year on HR software. Then divide this by the number of employees within your organisation so your figures align with many pricing models. Will you need to pay more to access more features in the future?
5. Consider ease of use and support
Think about how easy it is to navigate the HR software and what support is available. Can you contact someone by live chat or over the phone? When is this support available and are response times realistic for small employers?
6. Make the most of free trials
Once you’ve narrowed down a shortlist of providers, take advantage of any free trials on offer. This helps you gauge how easy it is to operate the platform before you commit. Use the trial period to test all the features available, not just some of them.
Popular HR software providers in the UK
BambooHR
BambooHR helps you to manage employee data, applicant tracking and onboarding in one place. It offers automated reporting, performance management and employee well-being tools, as well as an employee community area where staff can stay up to date with what’s happening in the business.
Breathe HR
This all-in-one HR solution enables you to streamline holiday processes, manage performance and plan staff rotas. It also offers onboarding and salary forecast tools. The price you pay depends on the size of your business and the optional add-ons you select.
Bright HR
This is a popular HR system in the UK and comes with annual leave, performance and payroll features, alongside built-in health and safety tools. You can plan shifts and rotas as well as store documents securely with unlimited cloud storage.
Gusto
Gusto is payroll software that also includes basic HR tools such as onboarding, benefits and time tracking. However, because it is primarily US-focused, some of the features are not available to UK employers. Prices depend on the size of your business and the features you require.
HiBob
This is a global platform with core HR, analytics, engagement, hiring, performance and optional payroll features. It includes a UK-specific payroll feature with HMRC compliance. HiBob only offers custom pricing, so you need to get in touch to find out more about costs.
Sage HR
Sage HR is a UK-centric platform that covers core HR tasks and allows you to add features such as timesheets, scheduling, recruitment and performance. You only pay for the features you need and can scale up over time. Prices start from just £4.60 per employee per month.
Paid-for vs free HR software
If you’re running a very small team with limited needs and a small budget, opting for free HR software may be sufficient. With this, you’re likely to get basic payroll tools and it should handle simple tasks such as employee records and annual leave.
However, many free options lack robust security measures and have limited functionality, making them a poor fit as your business grows.
Paid-for plans can be the better option if you have a growing team and require full payroll tools as well as advanced features such as recruitment and onboarding, advanced analytics and global compliance. Paid-for options also tend to offer dedicated customer service and training, as well as better integration with existing tools used by your business.
HR software pricing: what to expect
The price of HR software depends on the features it offers and the type of subscription. Typically, you pay a monthly or annual fee that’s calculated in one of two ways:
Per employee, per month – This is a common type of subscription and means you pay a set fee, say £3 to £10, for each employee you manage in the system each month
Business size and need – Different pricing options are available depending on the size of your business and the features you require
Many HR software platforms come with tiered plans where you need to pay extra to unlock more advanced features. There might also be a range of add-ons that you pay for separately, so you can pick and choose the features and tools you’re likely to find most useful – for example, managed payroll, employee benefits or recruitment tracking.
Because costs can seem a little complex and some providers don’t even publish their prices online, it’s sensible to sign up for a free trial or demo first, so you get a good grasp of what each includes and which features you may be able to do without. Trials can last anywhere from a week to a month.
Many HR software platforms come with tiered plans where you need to pay extra to unlock more advanced features"
Six questions to ask before picking your HR software
1. Does it integrate with existing tools?
Check whether the software works alongside any existing platforms you use, such as payroll or accounting software
2. How easy is it to use?
Will your team find it easy to navigate and does the provider offer any training?
3. What support is available?
Can you get support 24/7? Is it only through a live chat service or can you phone someone if you need urgent help?
4. Can it scale as my team grows?
Check whether the software offers features to support your company as it expands over time
5. How secure is it?
If you’re storing important or sensitive information, what features are in place to ensure it’s held securely?
6. Are all features available in the UK?
Not every HR platform is fully adapted for UK employers, so be sure to check whether some tools focus on other markets
Top tips for implementing HR software
The following tips can help you successfully set up your new HR software:
Create a plan – Decide what processes you want to set up first, whether that’s holiday requests or storing employee documents, and create a realistic timeline. This is much easier to manage than doing everything at once
Start small – Use the features that are most valuable to your business first. Once you’ve grasped how they work, you can decide whether more advanced tools are genuinely needed
Provide basic training – It’s important that your staff know how to use the software, so set up some training sessions to guide them through the key features they need
Review after a few months – Once you’ve been using the software for a few months, assess whether you might need additional features, or whether you could drop some if they are not proving useful
Pros and cons
Pros
Consolidates employee data in one place, reducing paperwork
Automates time-consuming tasks such as holiday requests and payroll
Digital records with audit trails help demonstrate compliance
Improves communication between employees, management and departments
Employees can manage their own data and request leave, boosting satisfaction
Flexible pricing plans enable you to pick and choose the features you require
Cons
Can require significant initial investment in time, money and training
You could end up wasting money if you don’t use all the features available
You may need to invest in multiple products from different providers
Not all platforms integrate well with existing business tools and software
Pricing can be confusing and costs can easily be inflated by add-ons
Cloud-based HR systems make strong data security essential
FAQs
Do I need HR software if I only have one to five employees?
If you only run a small team of up to five employees, it’s unlikely to be worth investing in HR software, because tasks such as tracking holiday and managing payroll should be fairly straightforward to do yourself. However, if you are finding it difficult to stay on top of things, you could look for a basic low-cost option with limited features.
Can I run payroll with HR software?
Yes, but it depends on the platform. Some HR software offers built-in payroll features, while others can integrate with external payroll software.
How much does HR software cost?
That depends on the software you use and the size of your business. Some models can cost as little as £3 per employee per month, while other platforms with more advanced features for larger companies could cost around £500 a month.
Is employee data secure with HR software?
HR software is more secure than storing data in spreadsheets, email attachments and shared folders. However, it’s still essential that your business adopts good data practices.
This means choosing a trusted system provider that is GDPR compliant, using robust passwords and changing them regularly, training and educating your staff about data protection, and using role-based access controls so that only certain people can access certain information.
Can I switch HR software without losing records?
Yes, but it requires careful planning, data cleaning and mapping.
Can HR software be customised for specific needs?
Yes, most HR software is designed to be customised for specific needs, but not all and not always off the shelf. It varies from platform to platform, so make sure you ask potential providers the question when evaluating different HR software platforms for your company.
How do I choose the right HR software for a small business
When it comes to choosing the right HR software for a small business, make sure you know exactly what you need, what your budget is and what questions to ask potential providers. These might include what core features it offers, what optional add-ons are available, how customisable the software or platform is, and whether it’s easy to scale up and down according to your business’s changing needs.
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