Do you need HR software for a small business?

“Do I need HR software for my small business?” The simple fact you’re asking that question indicates what the answer might be, but let’s break it down. Here’s a story we commonly encounter…

The rise of HR admin

Starting and running a small business often means that HR is not a priority—until it becomes unavoidable. Naturally, your focus is on customers and business growth. However, as your company expands and additional staff are required, so too are the responsibilities that come with managing a team. As a responsible employer, you take these obligations seriously, and this is when HR administration begins to demand more attention.

Initially, it’s manageable. Spreadsheets serve their purpose, and you rely on various methods—lists, notes, emails, and mental reminders—to stay organised. For a while, this system works. But as the business grows, you realise that increasing your workforce is necessary to maintain momentum. As your team expands, so too does the burden of HR administration, gradually occupying more of your schedule.

Unexpected issues then arise—employee absences, holiday requests, compliance deadlines—often at inconvenient moments. While your system still functions, the complexity begins to spiral. What was once a simple spreadsheet now becomes unwieldy, as you track rotas, leave, sickness, payroll, and pensions. And as you search for that one important detail you noted down last week, you realise it’s 3am, and the demands of HR are catching up with you.

Hidden time wasters in HR

We support thousands of small businesses across various services, from software solutions to expert HR consultancy. A common challenge they all face is a lack of time—an increasingly scarce resource. Ironically, this is often the reason for expanding their workforce. However, many underestimate the time required to manage the essential administrative tasks that come with HR responsibilities, each of which gradually consumes valuable hours.

Top time-consuming HR tasks

Absence Management: Sick days are an inevitable part of any business. Beyond the immediate disruptions, it’s essential to maintain accurate records of absences, as this data is critical for payroll processing and calculating holiday entitlements. Additionally, absence history plays a role in performance reviews and pay decisions. It’s not just sickness that requires attention—there are numerous regulations surrounding absences, including maternity, paternity, bereavement, and adoption leave, each with its own set of compliance requirements.

Holiday Management: Employees are entitled to up to 28 days of annual leave, depending on several factors. While they deserve their time off, as an employer, you must manage and respond to each request while ensuring business continuity during peak periods. It’s also your responsibility to track accrued holiday leave throughout the year, as any remaining balance will need to be compensated if an employee resigns.

Payroll: A 2020 QuickBooks study found that small businesses spend up to 21 days per year on payroll processing alone. If you’ve ever handled payroll manually, it’s no surprise that businesses often dedicate up to a third of their HR administration time to this task—correcting payroll errors only adds to the burden.

Compliance: Many new employers are unprepared for the extensive compliance requirements that come with managing a business. From liability insurance and applicant checks to pension auto-enrolment, health and safety regulations, employment contracts, and right-to-work checks, each aspect carries legal obligations. Non-compliance can result in significant financial penalties, underscoring the importance of staying on top of these requirements.

Why HR software can be a game changer for small businesses?

This is where we come in. “Do I need HR software for my small business?” Technically, no. Everything on that (by no means exhaustive) list can be managed manually. But should it be?

The risks of handling HR manually are significant. At best, errors in holiday bookings or payroll may result in unhappy employees. At worst, you could face fines for non-compliance, tribunals, or damage to your business’s reputation.

Today, HR software tailored specifically for small businesses is available through affordable subscription plans, often without the commitment of long-term contracts. Tools like SafeHR are designed to streamline HR processes by eliminating administrative burdens. Our software is intuitive and user-friendly, allowing you to focus on what matters most—serving customers, pursuing leads, solving problems, and growing your business.

How can HR software save time for your business?

Reclaim your time: Most administrative headaches are eliminated when key processes are automated. For example, when an employee takes time off, their absence is logged, and all relevant data is instantly updated. Holiday requests are no longer a burden—employees can view their entitlement and submit requests online. All you need to do is check for conflicts in the system and approve or decline. Saving time is one of the primary benefits of tools like SafeHR, which is why over 5,000 small businesses rely on our software.

Minimise errors: HR mistakes can range from frustrating to costly—or even disastrous. Managing these tasks manually makes errors almost inevitable. No one is immune to occasional slip-ups. By implementing a purpose-built tool that simplifies complex tasks with just a few clicks, you can significantly reduce the likelihood of errors that could cause serious issues for your business.

Ensure compliance: Employment laws change regularly, and staying compliant can be a daunting task. Unfortunately, regulators don’t make exceptions for busy entrepreneurs who struggle to keep up with the latest requirements. HR software helps ensure you remain compliant by promoting best practices, flagging upcoming deadlines, and securely storing sensitive employee data in compliance with GDPR regulations.

Enhance employee relations: Being a responsible employer is crucial, and disorganised HR processes can undermine the trust and respect essential to a positive workplace culture. While creating a fun work environment is important, it won’t compensate for recurring payroll errors. You invest time and effort into hiring the right people—HR software helps you retain them by providing a smoother, more reliable experience.

To conclude

In conclusion, while managing HR tasks manually may seem feasible at first, the increasing demands of a growing business can quickly make this approach inefficient and error-prone. HR software like SafeHR offers a practical solution, streamlining time-consuming administrative tasks, reducing errors, and ensuring compliance with ever-changing employment laws. By automating key processes, SafeHR gives you back valuable time to focus on what truly matters—growing your business, serving your customers, and fostering a positive workplace culture. With affordable, flexible subscription plans and no long-term commitment, SafeHR is trusted by over 5,000 small businesses to manage their HR needs effectively and efficiently. The question isn’t whether you can manage HR without software—it’s whether you should. SafeHR ensures that your business runs smoothly, allowing you to avoid the risks and focus on your success.