Top tips for finding the best HR software for SMEs



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8 mins


As small and medium-sized enterprises (SMEs) grow in terms of revenue, client base, and employee numbers, so does the complexity of their human resources management. From recruiting and onboarding to performance management and payroll, HR tasks can quickly become overwhelming, particularly for businesses with limited resources.

Fortunately, technology has revolutionised HR management, providing SMEs with a choice of HR systems that can automate and streamline HR processes. However, with so many options on the market, it can be challenging find the right HR software for SMEs that suits their unique needs and budget.

In this blog, we will discuss top tips for small and medium-sized businesses to find the right HR software that can enhance their HR management capabilities and drive business success.

Identify your HR software for SMEs needs before assessing the market

SMEs need to have a clear understanding of their HR needs – now and in the future – if they want to choose the right HRMS software that will best serve their organisation. To identify these needs, the first step is to conduct a thorough analysis of your current HR processes and systems, and identify areas where you can make improvements. Taking a close look at your existing HR data, processes, and workflows, as well as conducting employee surveys to gauge satisfaction and identify pain points, will help your SME understand what’s working well (and therefore needs to be replicated in your new HR system), and what could be improved with the right HR software.

With this foundation, SMEs can then begin to research HR software solutions that address their particular needs. It is important to choose software that is able to satisfy your organisation’s specific requirements; remember, some HR software solutions are designed for large enterprises and may have features that are not relevant to your needs as an SME, while others may lack critical features that are necessary for effective HR management, especially if your SME is planning for a period of rapid growth.

Essential factors to consider when reviewing potential HR software for SMEs includes ease of use, scalability, cost-effectiveness, and compatibility with existing systems, such as payroll or time and attendance software. It’s also important to consider the level of ongoing customer support provided by the software vendor, as well as the availability of training and resources to help with implementation and ongoing support. Make sure that prospective HR software vendors will meet the needs of your SME by asking them these eight critical questions.

Don’t forget that UK organisations with more than 250 employees are required by law to submit their gender pay gap figures to the government. This requirement aims to promote gender equality and diversity in the workplace and improve transparency in pay practices. However, collecting and reporting this data can be a time-consuming and complex process for SMEs, particularly those with limited HR resources. This is where HR software – such as Ciphr HR – can help.

Ciphr HR streamlines the process of collecting and analysing data related to the gender pay gap, helping SMEs collect relevant data on employee salaries, job roles, and demographics, and calculate the gender pay gap figures automatically. This can save HR staff significant time and effort, reducing the risk of errors and ensuring compliance with legal requirements.

Modern software for HR can provide insights and analytics that help SMEs understand all facets of their people management – not just their gender pay gaps. Look for an HR system that can automatically generate reports, and distribute them to key stakeholders, so your organisation can make more informed decisions about, for example, pay, absence management, and training initiatives.

Learn more: Why is HR software important?

Look for a user-friendly interface

SMEs typically have limited resources and staff, which means that every aspect of HR must be optimised for efficiency and effectiveness. One important consideration when choosing between HRIS systems is the user interface (UI). A user-friendly interface can make a significant difference in how quickly and easily employees can perform tasks within the system.

A user-friendly UI streamlines HR processes, making it quicker and easier for employees to perform tasks such as requesting time off or updating their personal information. This can save time and improve efficiency within the organisation. Additionally, a user-friendly interface can increase employee adoption rates. Employees are more likely to embrace new HR software if the interface is easy to navigate and understand. If the software is difficult to use or confusing, employees may be hesitant to use it, leading to poor adoption rates and a lack of engagement with the system.

Choosing an HR software with a user-friendly interface can also reduce training costs. A software with a clear and intuitive UI can reduce the need for extensive training on how to use the software, allowing SMEs to focus on other important areas of the business. Moreover, a user-friendly interface can improve the accuracy of HR data. When the interface is easy to use, employees are less likely to make mistakes when entering information, which can improve the accuracy of HR data.

Check for scalability

Scalability refers to the software’s ability to handle increased workloads and users as the organisation grows. HR software for SMEs needs to keep up with their growth. As a company expands, its HR needs become more complex, and its existing systems may no longer be adequate. Scalable HR software adapts to the changing needs of the organisation, providing more functionality and capacity as the company grows.

Scalability ensures that SMEs can manage their HR needs without interruptions or downtime. HR software that is not scalable may experience performance issues or even crashes when the workload exceeds its capacity. This can be particularly problematic for SMEs that do not have the resources or expertise to address these issues quickly. A scalable HR software can avoid such problems by providing ample resources to handle the increased workload, ensuring uninterrupted service and data integrity.

Scalability can save SMEs time and money in the long run. By investing in scalable HR software, SMEs can avoid the need to switch to a new system every time the company grows. This can be costly and time-consuming, requiring the organisation to purchase new software, train employees, and migrate data. Scalable HR software can eliminate this need, allowing SMEs to focus on other aspects of their business.

Look for integration capabilities

When deciding on which HR software to choose, SMEs should consider integration capabilities as a key factor. Integration capabilities refer to the software’s ability to seamlessly integrate with other systems or applications used by the organisation. In the context of HR software for SMEs, this means the ability to integrate with payroll systems, learning management systems (LMS), and other HR-related software. By choosing HR software with strong integration capabilities, SMEs can achieve greater efficiency and accuracy in their HR operations.

For example, integrating HR software with a payroll system can eliminate the need for manual data entry and reduce the risk of errors. This integration can also enable the automatic calculation of taxes, benefits, and deductions, saving time and reducing the likelihood of costly mistakes.

Consider the cost

While investing in HR software can provide significant benefits, including increased efficiency and productivity, SMEs need to carefully evaluate the costs associated with each software solution.

There are various factors that contribute to the cost of HR software, such as the number of features, the level of customisation, and the vendor’s HR software pricing model. It is essential for SMEs to identify their specific needs and assess whether the cost of the software is reasonable and justifiable. Additionally, SMEs should consider the total cost of ownership, which includes not only the upfront purchase price but also ongoing maintenance, support, and training expenses.

SMEs should also consider the potential ROI (return on investment) of the HR software. A good HR software solution can help SMEs save time and resources, improve HR operations, and enhance overall business outcomes. Therefore, investing in the right HR software for SMEs can be a cost-effective investment in the long run.

However, SMEs should avoid making decisions based solely on the cost of the software. Instead, they should take a comprehensive approach that includes evaluating the features, functionality, and vendor support. By selecting an HR software solution that is both affordable and comprehensive, SMEs can maximise the benefits of the software while minimising the overall cost.


Overall, the best HR systems for medium-sized businesses should offer the right balance of features, usability, affordability, and scalability to meet the unique needs of SMEs.

To find out more about how Ciphr can help your business manage its HR function, download our brochure or book a demo with one of our experts. Or, if you’re still not sure what features your HR system should have, based on your organisation’s size, read our helpful explainer: ‘How do HR systems differ in small and large firms?