The Best HR Software for Startups in 2024

While there are many top HR software solutions to choose from, it’s essential for startup owners to consider the features each one offers and what will best serve their needs during the early stages of building a business. Startups must adapt quickly to meet the demands of clients, customers and investors. Having the right software in place can help minimize risk, improve efficiency and retain talent, all of which are critical to growing a successful business. We studied several options to help you choose the best HR software for your startup. Our best picks are based on key criteria like features, pricing and ease of use.

The costs of HR software for startups can vary based on company wants and needs, and staff size. While some offer pricing that is per employee per month, others, such as Bambee, charge a flat monthly fee based on the number of employees. These will often have different tiers to accommodate startups as the staff size grows. While we appreciate transparent pricing, some vendors offer customized pricing only. This means you’ll need to spend more time speaking with a sales representative to understand any nuances.

Once you have a base price, there may also be add-ons and features that increase the price. For example, Gusto offers transparent pricing tiers using a per-employee-per-month model. However, you may incur extra costs based on benefits you hope to add. Broker integration is an additional $6 per employee per month, while commuter benefits are an additional $4 per employee per month, with a $20-per-month minimum. Knowing these add-on costs in advance will help you select the right software solution and benefits. The cost of these add-on features is especially important to keep in mind as you plan for various changes that may occur as startup funding comes and goes, as it so often does for new businesses. Ideally, you want a solution that can grow with your company in a way that enables you to predict future costs and stay on budget.

Another thing to keep in mind when choosing an HR software solution is that many will have setup fees, while others will set up everything at no charge. Setup fees may be cost-prohibitive for some teams, but if you’re able to pay them, it may be helpful to getting started with a new system in the best possible way. However, if your budget is tight, consider a company that offers free setup and implementation.

A feature-rich startup HR software solution will help business owners eliminate administrative work, mitigate risk and support employees without a large HR staff. Here are some key features to seek out in great HR software for startups.

Dedicated HR Professionals

Not all solutions provide a dedicated HR professional, but knowing you have one is a huge benefit. If you are a new organization or feel as though you have some more advanced HR issues to work through, this feature can help bring peace of mind. For startups that have more experience or a larger HR staff, a dedicated and experienced professional may not be necessary.

Documentation Management

Building a company from the ground up often means multiple iterations of important documents. But when it comes to employee documentation, taxes and reporting, you can’t afford to have outdated information in multiple places. HR software can help startups maintain all necessary documentation digitally in one place. And in many cases, it can be accessed via desktop or mobile app. This convenience helps mitigate risk and maintain compliance.

Prebuilt Templates and Customizable Policies

Most HR software solutions provide startups with templates to help manage important HR processes. For those that currently don’t have offer letter templates or onboarding checklists in place, software provides a starting point. These documents can always be adapted as the company grows, but sometimes you just need a template to get started. Policy documentation and handbooks can also be overwhelming for startup leaders to navigate. But HR software can help by determining company needs based on other important HR information.

User-Friendly Interfaces

HR software platforms can help streamline tasks for both employers and employees. Startups can utilize software to help automate important tasks so they’re not lost as the company grows or work increases. Software can also make it easier to keep record of necessary HR tasks that have been completed versus those that remain open. Software also improves the employee experience. Without a full HR team to walk new employees through onboarding, important documents and payroll information, it’s easy for them to get lost. Having a good software solution in place allows employees to work through everything they need to complete. And many solutions conveniently allow them to complete necessary tasks via desktop or mobile.

Accessible Customer Service

HR tasks are critical to keep an organization running smoothly. Since startups are less likely to have an experienced HR staff, it’s important to know you can receive support when you need it. Some vendors offer support 24/7, while others have more limited hours. How and when do you prefer to receive customer service? If you need access to live chat or phone any time of day, make sure the vendor you select can meet your needs.

1. Conduct market research.

Before selecting an HR software solution, take time to do your own research. Most providers have a significant amount of information on their website. You want to take the time to learn about the available features, add-ons and integrations. You should also look to see if pricing is available online or if you will be required to contact a sales representative to get a quote.

In addition, we recommend searching for online reviews from other users. You can start with a website like Trustpilot to compare. Look for any trending pros or cons related to features, user experience and customer service. You can learn only so much from a sales professional and looking over the website. But if you notice an issue is consistently mentioned in various reviews, you can ask the company about it and see how they address your concerns.

We also recommend looking for reviews from other startup owners. Since startups offer a uniquely fast-paced and rapidly changing work environment, it will help to hear what other owners have to say about a particular product. Once you’ve done this, as well as all of the steps above, write down any questions you may have.

2. Contact vendors for demos.

Now that you’ve down your own research, reach out to the vendors you’re most interested in. Ideally, you want to schedule a demo so you can see the software working in real time. Make sure that any administrators who may regularly use the software are also able to speak with the vendors. They may come up with additional questions. As you go through the demos, ask everyone from your company who is participating to take notes. These will be helpful to refer to when it’s time to make a final decision.

While you have the opportunity to meet with a vendor contact in real time, be sure to ask if they offer any sort of free trial. If so, you’ll want to take advantage of the opportunity to gain hands-on experience with the product. In order to avoid any confusion between products, we don’t recommend completing all of your free demos at the same time. Completing them separately will give you more time to think through any pros, cons or additional questions. You can then address these when you touch base with each vendor again.

3. Evaluate pricing.

Now that you’ve had time to use each product (or at least discuss it in more detail with other users) you should feel equipped to determine what features you need the most. Since adding additional features is what typically increases the price of HR software, it’s important to know exactly what you need and what will best support your business. However, don’t forget to think about the future. As you add employees, will your solution still be cost-effective? Take the time to think this over and ask your vendor about what may cause a rate increase in the future.

Below are some key ways in which HR software for startups can benefit your operations and bottom line:

• Save money: Startups don’t typically have the funds available to hire a large, experienced HR staff to manage day-to-day tasks that are essential to the business. Choosing an HR software solution can provide the HR oversight and management a company needs without adding additional headcount to payroll.
• Receive expert support: Some HR software solutions, such as Bambee, offer dedicated support from an experienced HR professional. So, while it may not be feasible to bring on a full-time HR professional, startups still have the ability to get extra support through their partnership with an HR software provider.
• Reduce administrative time: Payroll, benefits, onboarding new hires – all of these tasks require a significant amount of administrative time. Startups are very fast paced, and customer demands can change rapidly. Startup leaders need to be focused on moving forward rather than being bogged down by the administrative tasks that are essential but don’t necessarily contribute to their product or service offerings in a direct way.
• Mitigate risk: Because startups don’t often have an experienced HR staff, the right HR solution can help the company to mitigate risk and maintain compliance without adding another person to payroll. HR solutions can ensure proper training is implemented on time, that payroll is handled correctly and that taxes and benefits are appropriately managed based on the location of each employee.
• Helps manage employee documentation: Keeping accurate and secure employee records is important for multiple reasons. HR software provides an easy way for startup owners to keep record of data that serves multiple purposes outside of just payroll and benefits enrollment. More basic employee data could also be helpful as the company grows and potentially applies for more funding. Having the right software in place takes one more essential task off of a small team that may not have a lot of HR experience.