- HR software streamlines core HR tasks like employee records, documents, compliance, reporting, and benefits administration.
- The biggest time-saver for small businesses is HR + payroll integration, which automates tax filings, syncs employee data, and reduces manual entry.
- Core features to expect: Employee information management, document templates, compliance tools, HR reports, handbook builder, manager permissions, and benefits administration.
- Consider HR software when you’re growing, juggling multi-state rules, offering benefits, or spending too much time on manual HR tasks.
- Patriot HR (an add-on to Patriot Payroll) includes law alerts, HR document templates, HR reports, an employee handbook builder, employee info management, and manager permissions.
- Getting started takes a few steps: Gather data, connect payroll, set permissions, upload docs, enable employee self-service, and turn on compliance alerts.
Is HR software for small business worth the price? How can it help your business stay on top of HR tasks like compliance, reporting, and employee information management?
These are common questions you might have before signing up for HR software. You probably want to know the features of HR software to determine if the return is worth the investment.
Read on for an HR software overview and learn about the features of HR systems for small business.
What is HR software?
Human resources handles policy development, recruitment, onboarding, compensation and benefits, labor law compliance, recordkeeping, and performance management. HR software, or human resources software, is a system that streamlines these HR processes.
Employers and HR professionals use HR software to improve efficiency, employee satisfaction, workflows, and compliance.
According to the U.S. Chamber of Commerce, 94% percent of small business owners think using technology, such as HR software, helps them run their businesses more efficiently.
In small businesses, HR software is often bundled with online payroll into one integrated platform, which gives employees a single self-service experience.
What does HR software for small businesses do?
HR software streamlines HR processes like employee information management and compliance. But what exactly does it do? What kind of features can you expect? How will it help your business?
Features of HR software may include:
- Employee information management
- HR document templates
- Compliance
- HR reports
- Learning management system
- Employee handbook builder
- Manager designations and permissions
- Benefits administration
Take a closer look at each of these key features.
- HR document templates
- HR reports
- Federal and state compliance
- Employee handbook builder
1. Employee information management
When you have employees, you have documents up to your ears: company-wide documents, like an employee handbook, and individual documents, like a performance review.
Put away the filing cabinets. With HR software, you can manage paperless files and documents online.
Examples of HR documents to store in your software include:
- Position information and history
- Emergency contacts
- Employee handbook
- Benefit enrollment forms
- Performance reviews
Depending on your HR software, you can also include notes for each document.
2. HR document templates
You may be able to access HR document templates in your HR software so you don’t have to create policies and other forms from scratch.
Available HR templates and policies may span topics like benefits, anti-discrimination, and equal employment opportunity.
Examples of HR document templates include:
- Non-disclosure statement forms
- Salary increase letters
- Bereavement time off policies
- Performance review forms
- FMLA policies
Your HR software might also help you create benefits documents, such as a premium only plan (POP) document.
3. Compliance
Complying with federal, state, and local regulations is paramount. But keeping up with ever-changing laws is a challenge for many small business owners.
HR software may include compliance features such as:
- Compliance dashboard: Get an overview of your company’s federal and state compliance obligations.
- Law alerts: Get software and email alerts if a new legal update impacts your business.
- HR assessments: Take a questionnaire to assess compliance risks.
- HR resources: Get access to videos, webinars, how-to guides, checklists, forms, and more.
4. HR reports
Want to see all your HR-related data pulled together in one easy-to-view location? Another feature of HR software is reporting.
HR reports make mandatory reporting, such as EEO-1 and new hire reporting, a streamlined process. You can view all the necessary information in one place instead of scouring through your records.
Examples of HR reports include:
- Demographics report: View each employee’s demographic info (e.g., gender, race, and veteran status) for easier EEO-1 and VETS-4212 reporting.
- Retirement plan contributions report: View your and your employees’ retirement plan contributions during a period.
- New hire report: Reporting new hires to your state is a mandatory task. A new hire report gives you the information you need to make this process a breeze.
You can generate, filter, and export HR reports with HR software.
5. Learning management system
A learning management system (LMS) is a platform you can use to assign, track, and schedule employee training. Some HR software systems include an LMS so you can share in-house training materials.
Examples of LMS courses include:
- Workplace harassment prevention training courses
- Employee health and safety training courses
- Cybersecurity courses
- Leadership and management courses
6. Employee handbook builder
An employee handbook builder is a tool that helps employers create, manage, and update a compliant handbook. It includes customizable templates and policies, state-specific regulations, and automatic updates.
On their own, employee handbook builders can cost hundreds of dollars. But, some HR systems include these builders in the HR software price.
7. Manager designations and permissions
You can use HR software for small business to designate managers and assign direct reports. That way, your managers can view their team’s information in one place.
You can also assign permissions to determine what the manager can view. For example, you might want a manager to only view their direct reports’ contact information and not their pay information.
Your managers can then log in to their employee self-service portal (if applicable) to view this information.
8. Benefits administration
Health insurance, 401(k) plans, and group-term life insurance are a few of the benefits you can offer your team. HR software can streamline the way you administer these benefits.
Benefits administration includes creating and managing your employee benefits package. You need to withhold employee contributions and remit them, alongside any employer contributions, to the applicable agency.
HR + payroll: Why integration matters
- Automate payroll taxes and filings: Payroll systems calculate withholdings, deductions, and employer taxes and file on-time, reducing errors and penalties.
- Keep data in sync: One employee record updates across HR and payroll (e.g., addresses, W-4s, benefits), cutting duplicate entry.
- Streamline onboarding and offboarding: Store Forms I-9 and W-4, policies, and benefits in one place.
- Support multi-state and remote teams: Track jurisdiction changes to apply the right state and local rules.
- Give employees self-service: Employees can update personal info, view documents, and access pay information without admin back-and-forth.
How to choose HR software (small business decision criteria)
- Team size and growth: Manual tracking breaks down as headcount grows or seasonality spikes.
- Compliance complexity: Multi-state operations, tipped or hourly workforces, or industry-specific rules raise the stakes.
- Benefits and reporting needs: If you offer benefits or file EEO-1/VETS-4212, reporting tools save time.
- Budget and pricing model: Look for transparent base + per-employee pricing and a free trial.
- Ease of use and support: Consider setup time, training, and access to human support.
- Integrations: Payroll, accounting, time tracking, and benefits carriers should connect cleanly.
Quick implementation checklist
- Get set up: Confirm your EIN and state tax accounts; gather company and bank info.
- Collect employee data: W-4s, I-9s, direct deposit, emergency contacts, and demographic details.
- Configure payroll: Set pay schedules, deduction rules, and accrual policies; connect accounting if needed.
- Import or add your team: Create employee records and designate managers and permissions.
- Upload HR documents: Policies, handbooks, performance review forms, and benefits summaries.
- Build your handbook: Use a builder to customize policies and state addenda.
- Enable self-service: Invite employees to view documents and update personal information.
- Turn on compliance tools: Set law alerts, complete HR assessments, and review the compliance dashboard.
Cost and ROI basics
- Pricing model: Most providers use a monthly base fee plus a per-employee fee; HR features may be included or offered as an add-on.
- Time savings: Automating document management and reporting can reclaim hours each pay period.
- Simple ROI check: Estimate hours saved per month × your hourly admin cost. It’s paying for itself if savings exceed the subscription.
- Trial first: Use a free trial to verify fit, test reports, and confirm the workflow before you commit.
Do I need HR software?
Deciding whether HR platforms for small businesses is a necessity or a nice-to-have can be a challenge.
On the one hand, HR software typically has a price tag. But on the other hand, it can save you administrative headaches and time (and isn’t time money?).
You might consider using HR software if you want to:
- Save time and streamline your HR workflow
- Use compliant HR document templates and policies
- Stay up to date with federal, state, and local law changes
- Designate managers to view their direct reports’ information
- Securely store paperless documents online (e.g. employee handbooks, performance reviews, etc.)
Some HR software systems, like Patriot Software, offer a free trial so you can test out the program before you buy.
FAQs
It centralizes employee records, stores documents, provides compliant templates, tracks compliance tasks and alerts, generates HR reports (e.g., demographics, new hires), manages manager permissions, supports handbook creation, and helps administer benefits.
Integrated platforms sync a single employee record across HR and payroll, automate tax calculations and filings, and give employees one self-service portal.
Common triggers include five or more employees, multi-state hiring, offering benefits, seasonal spikes, growing compliance needs, or spending too much time on manual paperwork and reporting.
Employee handbooks, signed policies, performance reviews, job and pay history, emergency contacts, benefits enrollment forms, and training acknowledgments.
Some HR platforms include an LMS; others integrate with third-party learning tools. Check whether built-in courses (e.g., harassment prevention) or integrations are available.
Yes. HR reports like demographics and new hire reports consolidate the data you need to complete these filings faster.
Reputable providers use encryption, user permissions, and multi-factor authentication. Limit manager access to “need-to-know” information using role- based permissions.
Gather EIN and employee data, configure payroll and permissions, import employees, upload documents, enable self-service, and turn on compliance alerts. Use a trial to validate your workflow.
Looking to manage employees and compliance without breaking the bank? Patriot’s HR software, a payroll software add-on, has the tools and resources you need to streamline your HR tasks. Features include law alerts, HR document templates, an employee handbook builder, HR reports, and more. Start your free trial today!
This article has been updated from its original publication date of August 29, 2024.
This is not intended as legal advice; for more information, please click here.
