How to Choose the Right HR Software for Your Business

15 September 2022

6 min read

Lynette Teo
Lynette Teo

As a small business grows, it comes with an increasing number of employees, more data, and extensive policies to manage. Keep in mind that growth and success come with complexities in day-to-day tasks. As an HR manager, you know how many hours it takes to manage people!

With the right tools and relevant HR software, you can reduce all the complexity that comes with mundane HR processes. In fact, according to the PwC HR Technology Survey 2020, 74% of businesses plan to expand their usage of a human resource management system (HRMS) for better savings and productivity gains. Here is a guide to help you determine the best HR software features, best suited for your business.

Before we get into that, let’s start with the problems faced by small businesses.

  • No dedicated HR staff to handle payroll, benefits, time tracking, feedback, hiring, and appraisals.
  • There is no absolute record keeping and compliance management system in the state of flux.
  • There is no strategy to invest in people and build an engaging work culture from the start.
  • Higher operations costs, and greater workload for your HR staff, even for smaller teams.
  • Use of multiple spreadsheets, to manage employee data.

Now that you are aware of the problems, let’s find a solution – finding the right HR software for your business.

How to Choose the Right HR Software for your Business?

  1. The first and foremost aspect to look out for is that while selecting an HR software, is that you need to be clear about your requirements. Analyze the challenges your business face. Some questions to ask yourself before conducting your research:
  • Where do your employees spend most of their time?
  • How are payroll and benefits calculated?
  • Is your document management flow accurate?
  • Do you need a recruitment tool?
  • Are you looking for an automated onboarding process?

These questions will help you identify the exact problem within your organization.

2. Once you have identified the problem, you can filter out the right solution that meets your company’s requirements. You can go with traditional software with rigid and bulky features or choose an HR software that provides customization options and actually fits your business needs.

Gone are the days when you had no option to customize or choose. Identify the best match that can help you manage your HR-related tasks. 

These tools will make your life as an HR manager easier.

3. Third on the list, be specific about your requirements. For small businesses, you need features like payroll, attendance tracking, performance management and more. The chosen HR software should have these functions.

The HR software is there to assist you, by taking care of all those redundant tasks and support you without adding manual work to your existing workload. Leaving you with more time for strategic decision-making.

4. Take advantage of the free trials! Book a demo or schedule a trial to fully understand the HR software before deploying it into your company. Make no hasty decisions. Check out if the features the HR software offers are customizable and scalable. Talk to your peers and colleagues from other companies about the software services or solutions they use and get their feedback.

5. Finally, determine whether the benefits outweigh the cost for the particular software. Find out how it all fits into your company’s budget, software features, and needs.

HR Software Features for Small Business

After understanding the things to look out for when choosing an HR software. Here is a list of the top five features that matter the most for small business owners and HR professionals.

#1 Applicant Tracking and Automated Onboarding

Hiring the right talent! This is a challenge even for small or large businesses. You have to keep in mind an agile approach while hiring quality talent. In addition, you need to make sure their onboarding experience is great as well!

A built-in applicant tracking system (ATS), allows you to create and post job vacancies within your company, and progress with ease. Moreover, with a centralized data management system, allows you to manage candidates’ applications, resumes, interview notes, etc in one place.

If you have an automated onboarding system, you can create a checklist for the members of the team, about their tasks. For example, you can put in a request to the IT department to prepare the laptop and access pass, or ask the hiring manager to give an office tour. Most of all you can create a hiring packet for each individual with the required documents and request for e-signature for documents.

#2 Leave, Time, and Attendance Tracking

Manual leave tracking can take more time than you can actually fathom. When you automate leave tracking, you can allow your employees to record their attendance with the help of a clock-in system.

HR software helps you with time-off tracking as well. You can easily coordinate the work schedule of your employees, and calculate overtime accordingly. It is a great way to handle effective resource planning, leading to fewer staff shortages.

#3 Compensation and Benefits Administration

Manage, maintain and process your payroll at the end of each monthly cycle. When it comes to setting up a payroll for small businesses, the right HR software ensures compliance with tax laws and employment regulations. It enables you to streamline the workflow.

Benefits of payroll processing with HR software include:

  • Work out calculations and deductions
  • Generate accurate payslips
  • Analytics and reports 
  • Remain compliant
  • Store payroll data securely
  • Reimbursement for business expenses

Implementing HR software in your company reduces complex calculations processes and provides you with a centralized platform.

#4 Employee Self-Service and Data Management

Your employee may be looking for something as simple as a payslip or the number of leaves left. HR software can help relieve you of this duty, by granting your employees access to their own personal data. With just a few clicks, they can update their personal information such as change of address and request time off.

A centralized data management system adds all your documents to a single platform. Assign different levels of access to your employees, managers, and CEOs while maintaining control.

#5 Reports, Analytics, and Performance Handling

Data matters. For small businesses, it is necessary to measure the impact of every strategy they make. The best way to do this is with HRMS, that can provide you with reporting capabilities. You can use these reports to help you plan for the future. 


Regardless of the size of your company, the benefits to having HR software are endless. HR automation software can save you valuable time and resources, especially when your business is growing rapidly.

Omni HR is designed to be more than just another HR software. Sign up for a free trial and see how we can help you grow your business.

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