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Guide to small business HR services for 2023

Let’s be real: you probably didn’t set up your small business so you could spend hours on HR. And yet, having efficient and legal HR isn’t optional when it comes to managing staff.

Luckily, there are HR tools that can make that side of your business easy and streamlined, so you can manage crucial HR functions like payroll, leave, scheduling, and hiring — without hours of extra manual paperwork, messing around with spreadsheets, or spending thousands of dollars on outsourcing.

Get back to doing what you do best, and let the HR take care of itself (well, almost)!

Check out our tips for small businesses below for our full guide, including:

  • What HR for small businesses includes
  • How to know whether your small business really needs an HR tool
  • What to look for in an HR service
  • Four of the best HR tools
  • The key features that a great HR service should include

Let’s dive in.

What is a small business HR service?

A small business HR service helps small businesses digitize everything to do with ‘human resources’ so they can manage work schedules, time clocks, vacation and leave, payroll, team communication, hiring, and onboarding, without spending hours handling it all manually on spreadsheets or on paper.

It keeps everything in one place and enables you to ensure compliance to employee laws, coordinate staff, boost team happiness, and means all HR details and documents are kept safe and secure.

Signs your small business needs human resources

Thinking your business “doesn’t need HR yet” is a classic small business hiring mistake that many entrepreneurs and owners make early on. It’s tempting to think that your business isn’t big or profitable enough to need HR.

But actually, outsourcing these crucial tasks from the get-go can help you scale faster and run more efficiently, whether you have two staff members or 20.

Your small business needs HR if you:

  • Pay staff and want to turn hours worked into accurate wages
  • Employ (or manage) any member of staff, especially on an hourly basis
  • Schedule employees’ time or want to share schedules among the team
  • Want or need to hire or onboard staff efficiently
  • Communicate with staff and keep the team in sync
  • Need to stay compliant with local business and labor laws
  • Believe in building a strong and happy team
  • Want to make your business a great place to work

What to look for in an HR service

A good HR service will enable you to manage all the major aspects of managing your team, and keep everything on a single platform so you never have to waste time syncing tasks manually.

When comparing and contrasting HR services, you’ll want to make sure your chosen platform includes the following tools:

Hiring and onboarding

A great HR service will enable you to go from advertising to welcoming a new hire professionally and easily, including:

  • Job description templates, job posting and jobs board integration
  • Applicant tracking, interview questions and applicant messaging
  • Onboarding, background checks, contract signing, welcome packets, and new employee handbooks

Scheduling, time clocks, and timesheets

Look out for tools that:

  • Optimize and adapt schedules, and track hours and breaks
  • Share updates with your team members
  • Use templates to save hours of manual scheduling and avoid staffing clashes or no-shows,
  • Control time-off requests.

Also ensure it can all be done remotely on a smartphone too, for on-the-go management.

Payroll

A great HR service provider will enable you to:

  • Track employee hours and breaks, and convert timesheets into wages in just a few clicks
  • Calculate taxes, send accurate payments to staff and tax authorities, and keep compliant records.

Plus, a platform like Homebase will also enable staff to see when they’ll get paid (and even access funds early if needs be), as well as store emergency contact details and all account data safely.

Team communication and employee happiness

The best tools know how important it is to maintain an excellent staff community and make your business a happy place to work, to boost morale, improve productivity, and staff retention. Look for an HR service that:

  • Makes it easy for staff to communicate, share requests, and give credit via timely shout-outs
  • Offers employee benefits management, perks, and reminders of dates such as birthdays and anniversaries

These often-overlooked tools help turn employees into a thriving, happy team.

Many services will also offer tools for free (or via a free trial), with the more advanced ones as paid add-ons as your business grows, so you can test the service, and it can scale easily with you.

Similarly, a great HR service will integrate seamlessly with other important business platforms, so you can keep all of your tools together. For example, Homebase integrates with leading tools such as Shopify, ZipRecruiter, Glassdoor, and Indeed.

Best small business HR outsourcing companies

When it comes to choosing an HR company that works best for you, it can feel overwhelming to compare and contrast the different tools out there. So we’ve tried to break it down as simply as possible.

Homebase

A comprehensive HR management service specially designed for small businesses, with smartphone-accessible tools for everything from scheduling and timesheets, to payroll, hiring and onboarding, regulatory compliance, and even the much-overlooked-but-crucial employee happiness.

Pricing – It offers key tools such as hiring, time management, an employee mobile app, and customer support for free, and starts at $16 per month per location for even more advanced tools including legal compliance and payroll, with major integrations included.

Gusto

A service that specializes in payroll, which also offers tools dedicated to hiring, onboarding, simple time tracking, and automatic savings for employees, as well as a free employee app.

Pricing – Joining is free until you run payroll, with basic services for smaller businesses starting at $39 per month, plus $6 per person.

TriNet

An HR specialist designed for SMBs that works in a visual format to help non-HR professionals manage a growing team. Includes payroll and tax codes, and tools to ensure legal compliance, plus support and leadership training for staff.

Pricing – TriNet charges a flat fee per month, but the price varies by region, industry, company size, and scope of services. TriNet recommends scheduling a call to get a tailored quote.

Bambee

Designed for small to medium-sized businesses, Bambee describes its service as “putting your HR on autopilot” and specializes in compliance, onboarding, HR audits, staff training, and communication.

Pricing – Bambee (including a dedicated HR manager) starts from $99 per month for 1-4 employees, plus a one-time set-up fee of $500.

Other considerations for small business outsourcing and operations

You could be forgiven for thinking that HR is simply about hiring, onboarding, and training staff, but great providers will also specialize in the following services for small companies, ideally as part of their core package:

Outsourcing payroll

Payroll processing can feel complicated, but tools like Homebase keep everything together under one digital roof. This means that managing small business payroll services, and paying staff accurately and on time is a breeze, because timesheets, breaks, and vacations are automatically tracked and calculated.

Not only does outsourcing payroll to a digital HR software service save you from time-consuming manual administrative tasks and stress, it also means you keep up with important payroll trends (such as security, AI, and digital wallets) and changing federal or tax regulations, so you don’t have to stay on top of it all manually.

Scheduling and time clocks

For teams who work shifts by the hour, keeping track of scheduling and time clocks is crucial to ensure the smooth running of your business, avoid clashes and no-shows, book performance reviews, and make sure everyone is paid accurately depending on their individual schedule.

Engaging a tool like Homebase means small business owners and staff can keep employee schedules in their pockets with a smartphone app, so any changes, alerts or reminders are sent (and seen!) instantly. Templates and auto-scheduling help to avoid conflicts or clashes, and you can manage time-off requests in the same space, so everyone is informed at all times.

Smart time clocks help you track working hours, time off, and overtime, and automated schedule alerts can manage staff remotely so you can trust everyone is where they need to be at the right time (and get notified promptly if they’re not). Smart services link hours worked to targets, and ensure compliance with overtime employment laws too.

Team communication and staff happiness

Good HR goes beyond admin, and also makes your business a better place to work.

A strong team communication tool builds a strong community where everyone is involved, and keeps everyone in sync for even easier scheduling. It helps you to send helpful reminders, alert staff to events or updates, as well as giving staff space to share shout-outs and wins to raise morale. Team communication isn’t just about managers talking to staff; it also lets staff chat between them, too.

Great communication also enables transparency and lets you offer staff perks to boost employee happiness, such as birthday gifts, work anniversary reminders, health insurance, and rewards for other important milestones. This makes staff feel like they’re part of a supportive and happy team, which will motivate them to improve performance, too.

Small business HR services: The bottom line

Ultimately, the best small business HR service for you will be one that offers the majority of tools you find yourself using (or needing!) regularly, and will keep them synced and tracked so you set and forget them while you get on with actually running your business.

HR is crucial, and the best businesses know how key streamlined systems are in managing time, ensuring accurate pay, keeping track of staff and hours, and building a community in which everyone is happy, supported, and doing their best work.

Tools such as Homebase, which specialize in offering “HR for people who don’t do HR”, enables you to combine these must-do HR needs under a single, digital umbrella, so that managing HR is no longer a major timesuck, but the solid foundation of your business on which everything else runs smoothly.

FAQs for small business HR services

How much does it cost to hire an HR professional?

Hiring an HR professional can cost hundreds or even thousands of dollars, depending on the size of your company and the scope of the work you require. In contrast, signing up to a digital HR solution enables you to outsource professional HR expert tools for much less per month (and in some cases, for free).

Do small businesses require HR?

Any small business that is serious about success needs HR, whether it has one staff member or 100. Businesses aren’t faceless entities, they’re run by people, and making sure your people are happy, on time, organized, and paid properly is paramount. However, you don’t need to hire a whole HR team or in-house HR department; platforms such as Homebase can provide professional HR tools digitally.

Should a small business outsource HR?

If you’re not an expert in HR, and/or don’t have the skills, time, or patience to do it all yourself, then it makes sense for your small business to outsource HR, even at the start. Tools like Homebase can enable small businesses to “outsource” all the major HR tasks digitally and in-house, without having to pay thousands on outsourcing it to separate HR staff or to an expensive, full-time HR company.

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