The Top HR Software for UK SMEs and Small Businesses

The all-in-one HR system

We built Personio as an HR software for SMEs in the UK. Why? To unlock the power of your people with an HR solution designed with modern organisations in mind.

In this article, we explain why every SME needs an HR software they can trust. Moreover, some of the key features and buying considerations UK SMEs need to keep in mind.

What is HR software? 

HR software is a digitised solution for managing and optimising HR processes. It enables HR professionals and line managers to allocate their time and resources more efficiently, leading to improved performance, productivity and profitability.

Over the past decade, HR technology has come a long way. Organisations have ample opportunity to evolve out of relying on emails and spreadsheets to organise their work, with the options to match.

While there are different types of HR software, the most popular option for SMEs is a cloud-based HR software. This is a type of software that can be accessed from anywhere, with the proper permissions, because it exists in the cloud.

As we just talked about, there's a host of options when it comes to choosing an HR software. In our experience, it helps to choose one that covers each and every stage of the employee lifecycle, including:

  • Recruiting top talent

  • Onboarding new employees

  • Managing employee information

  • Evaluating employees through performance management

  • Paying employees on time

At the very least, having the option to cover each and every one of these stages should be table stakes for your average SME. For example, while you may not need a payroll solution today, you definitely need a way to safely and securely manage employee data.

Why HR software for SMEs?

A small-to-medium-sized enterprise is normally managing anywhere from 50 to 250 employees at a time. This involves storing a lot of data, managing a lot of important processes and overseeing a growing amount of moving pieces.

In short, there's lots to cover with very little room for error. An HR software for SMEs helps to centralise their people data while automating all their important processes. Especially as a business grows, these processes can quickly become difficult to manage when you don’t have a proper solution in place. 

Take a company like Core, Ireland's largest marketing communications company, as an example. Their HR Business Partner, Laura Mohan, makes the case: “HR as a team within Core is very focused on our people, our engagement. But before Personio, in terms of just task-driven work, it was very manual and very laborious.”

Much like the team at Core, many SMEs want to be able to focus on their people and their bottom line, but they struggle bringing together that data and reducing manual work.

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How does HR work in an SME?

Depending on your stage of growth, the role of HR at any given UK SME will vary. That said, there are some common circumstances that often include:

  • Support with sourcing, hiring and onboarding

  • Data management and keeping employee records up to date

  • Managing and running employee performance cycles

  • Building training programmes to aid in professional development

  • Running exit interviews with departing employees

When we think of an SME or small business in the UK and their HR team, we think about expertly managing each stage of the employee journey. The problem is that many teams don't have the time to commit to managing this experience from start to finish.

What about HR software for UK small businesses?

For a lot of the same reasons as SMEs, small businesses can also benefit from the introduction of an HR system. HR software for small businesses in the UK is especially helpful because it opens up time for leaders to focus on growing the business.

This is especially true if your small business is relying on one person to run your entire operation (and even more true if it's managed by your CEO or another member of the executive team). Ask yourself any of the following:

  • Do we have easy and immediate access to employee files?

  • Is all of our information housed in a compliant and secure way?

  • Do employees have the opportunity to update their information or do we have to do it?

  • Are we getting the most from our employees in terms of performance and development?

If you can't confidently answer yes to each and every one of these questions, you may need to consider an HR software for your small business. Adding one can add a layer of security and control to your entire business that could be badly needed.

How does HR software help SMEs and small businesses?

HR software helps SMEs and small businesses get and stay organised. Whether you are a busy CEO or COO, the only HR manager or part of a small HR team that wants to focus on bigger things, HR software is designed to make your – and your business’s – life easier. 

What is an example of how HR software works in an SME?

Take absences, for instance. According to the Independent, the average British citizen takes somewhere around 5.6 holidays every year. In an SME of at least 50 people, that is 280 separate holiday requests that need to somehow be managed.  

A smaller business may simply rely on an Excel sheet to track holidays. For their employees, that would make the process look a little like this: 

  • Tell their manager they want to go on holiday 

  • Pulling up the Excel sheet 

  • Filling in all of their details 

  • Sending their HR representative a message that they filled the sheet out

  • Waiting for a response and approval from their HR representative

  • Communicating back to their manager that their holiday has been approved

But, all it takes is one erroneous click, and all of that information is lost to the world. Not only that, but the information is haphazardly stored on one sheet which makes it impossible to report on – is everyone taking their holiday? Who knows! 

A great HR software for SMEs is going to have an absence management feature that works something like this: 

  • An employee opens an app on their phone or on their desktop 

  • They fill out their details of when they’re gone and the type of leave they want to take 

  • Both HR and their manager gets a notification and the ability to approve the request 

  • The happy employee goes on holiday 

Not only that, but it creates a much stronger pool of data. No more relying on outdated measures like the Bradford factor.

Now, your growing team knows who is in, who is out and can report on long-term trends and make sure everyone’s entitlement is updated automatically. 

The biggest benefits of HR software for SMEs in the UK 

The business case for an HR software solution has many angles. Here are just some of the biggest benefits worth mentioning: 

1. Immediately centralise all of your people data

personio HR software for SMEs digital file management
Use Personio to store all of your employee data in one place - error-free, easily-updatable and legally compliant.

The biggest case for finding an HR software for your SME is having one place for all of your information. This is especially important when it comes to data security, or things like payroll and employment contracts. All of your data, all in one place.

2. Scale your team and your operations

personio reporting HR data for SMEs
Personio can help your team run templated reports and everything from absences to headcount growth.

Whether you're 25 or 250 employees, an HR software can help scale with your company’s size and growing needs. One moment, it can house all of your data. Next, it can use that data to generate reports for your board members on headcount and company growth. 

3. Helping to attract and hire top talent

Personio ATS HR software for SMEs
Candidate experience is everything. Treat candidates to a great hiring experience with Personio.

Speaking of scaling, an HR software for SMEs isn’t complete without the ability to source and recruit top talent. One of the biggest benefits is that it can seamlessly automate your recruitment processes, so that your next great candidate doesn’t slip through your fingers. 

4. Boosting employee engagement and experience

personio surveys employee engagement for SMEs
Personio offers a multipurpose survey tool to collect, analyse and leverage valuable employee feedback.

Keeping your employees happy matters, for both your culture and your business. An HR software can help simplify all of the key moments in the employee life cycle, making it easier for employees whether they are joining the company or leaving it. 

5. Cutting down on costs and ensuring ROI

personio HR software SME ROI
Maintain a close eye on goals and overall productivity with Personio's HR software.

A shocking statistic for SMEs in the UK: 83% of your employees lose up to eight hours per week on repetitive admin tasks.

And, it’s all thanks to cumbersome HR processes found on Excel sheets or randomly buried in emails. The things HR was designed to solve.

HR software is an investment into the future of your organisation – and it immediately gives time back to all of your employees to focus on their best work, and not painful administrative tasks. 

The five key features of great HR software for SMEs 

When it comes to deciding on the right HR software for your SME, consider these five features that we consider non-negotiable if you’re looking at any solution. 

1. Absence management 

Being able to easily manage leave is huge for an UK small business or SME. Especially as your team grows, you need to have an easy and effective way to manage entitlements, requests and reporting on absence trends. 

2. Employee data management 

Whether you have 50 or 250 employees, they all trust you to manage their data securely. That means keeping files like contracts, payslips and tax forms neatly packed in a unique digital employee file. Designed to keep all of your data in one place. 

3. Time tracking 

Whether it is who’s in the office, or how long they are working for, time tracking software – as part of any great HR software for SMEs – is table stakes. Especially in a world of increasing legal compliance when it comes to tracking time, SMEs need to be prepared. 

4. Performance management 

Any SME knows that they need to keep hold of their top performers to succeed. And, studies show that performance conversations matter to your top performers. Performance management software allows you to run automated performance cycles, collect feedback from multiple sources and enable your managers to run more productive conversations. 

5. HR helpdesk 

Whether your HR team is made up of 1 or 100 professionals, an HR helpdesk is an incredibly important way to centralise and streamline employee requests. In it, your teams can answer employee requests, keep them on file and even automate answers to your most popular questions. It can even reveal gaps where your organisation is missing clear policies. 

How much does HR software cost for UK SMEs?

personio pricing for UK SMEs
Invest in a software, like Personio, that offers a host of features that can offer ROI at every stage of the employee journey.

It depends on your needs. A great HR software, made for the needs of small businesses and SMEs in the UK, is going to be able to tailor itself to your unique needs.

Take Personio, for instance, our pricing relies on having a core system of record for your people data that is built out with apps that help bolster your most important work.

Personio: HR software for SMEs in the UK

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Making the decision to invest in an HR software is a big one. So, it helps to know what you’re getting – with Personio, you gain access to a host of features that can help take your team’s HR work to the next level. 

Everything from storing employee information, managing your entitlements and absences, tracking time, recruiting employees and onboarding them smoothly. There’s a reason why 10,000+ organisations trust us – and over a million employees rely on our solution. 

Consider a company like LUSH, who use Personio to manage the data of their 400+ employees and recruit new team members daily. 

Take action today by speaking with an expert or starting a free trial. We can help you manage your SMEs HR needs with ease – because everything starts with people. 

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