6 Free HR Software Systems for Small Businesses in 2020

Many small business owners grapple with a conundrum as their companies grow: what to do when your operation is big enough to warrant an HR system, but not big enough to require an HR department. Hiring a full-time HR professional can be prohibitively expensive or just not the best possible use of funds at the time. The alternative, however, might mean managing your company’s people operations yourself—not a great prospect for a busy entrepreneur. 

The good news is that there are a ton of great free HR software options out there. You don’t need to sacrifice quality for affordability, either. Many HR software companies offer free versions of their platform for smaller businesses with modest requirements, and others offer full-fledged HR software suites at no cost at all. 

The bottom line is that there are more than a handful of free HR software options out there. Here are a few of the best free HR software systems out there, as well as some tips on what to look for when picking out the right one for you.

Types of Free HR Software

As with most types of small business software, there’s a solution out there for everyone. Not every platform is created equal, nor is every option suitable for every business. Some free HR software options that come with absolutely no strings attached may only provide a handful of assistance with the most basic tasks. Other free HR software tools could offer a better experience with more features and intuitive design, but restrict the number of users or tools you get to use.

The free versions of paid HR software tend to take two different tracks in terms of user experience. Some providers opt to give users of their free version a more robust scheduling experience, for example, and may restrict onboarding tools to a small subsection of a program’s greater capabilities. This might be enough for you if you only need to manage a few aspects of your company’s HR affairs with the aid of software, and can save you a fortune in the process.

Other limited or free versions of paid HR software may give users a little bit of everything they offer to their paid users, but allow for fewer employees to be entered and managed in the system. This is a great option for small companies with few employees, since they might be able to manage all of their needs without sacrificing performance. Your success in finding the right tool can be a matter of coincidence, though: In order to get just the tools you need, for just the right number of users, all without paying a dime is a pretty narrow needle to thread. However, very small businesses or ones that are only looking for a few features may more easily find success.

Free HR Software: The Top Options in 2020

“Free” can have a somewhat loose definition in the world of HR software tools. More often than not, the free versions of these tools are limited in their capabilities or support. 

Nevertheless, each of these six free HR software options is worthy of inclusion on our list of top picks. Some are free versions of excellent (albeit paid) platforms that are worth checking out before opening your checkbook. Others are good entry-level tools that can help you get your feet wet with HR software without paying for the privilege.

1. OrangeHRM

One of the few completely free HR software options around is offered by OrangeHRM. This platform includes must-have features to make people management easier, such as personnel information management, vacation hours tracking, attendance and timekeeping, and a document manager for keeping on top of company files. This tool goes beyond these basic functions by including employee performance, recruitment and hiring, disciplinary measures, and expense tracking. Plus, you can manage benefits and insurance information as well as compliance needs.

The platform comes in two varieties: an open-source version of the software that is absolutely free to download and use and a cloud-based paid subscription model. Be aware that the open-source version of the OrangeHRM system does come with the drawback of being limited to less-stable developer updates than the paid, cloud-based version. If you need technical support, you’ll also have to upgrade to Premier Open Source Support. 

2. Zoho People

Zoho is a preeminent provider of all manners of professional software, be it payroll services, website builders, marketing automation, and more. The company’s HR solution, Zoho People, provides almost every function you’d want in a program of its kind. This includes employee records, time and attendance management, performance review execution, automation tools, and even a ticketing system for your employees’ HR-related questions.

Zoho People offers a free version, although it only includes its core functionality and strips away most of the unique offerings and customizable capabilities. A free Zoho People account supports up to five employees per company, and consists of an employee database, document management tools, and tools to help you track employee time off and leave. Keep in mind that this slate of tools is pretty thin—even compared to other platforms such as OrangeHRM that provide much more (for a lot less).

3. Bitrix24

Next on our list of free HR software, Bitrix24 is a larger business management software platform that offers just about everything you might need to run your business. This includes all things related to customer management, communications, accounts payable, and—as you might have guessed—a comprehensive HR management suite. The free version of Bitrix24’s HR tools includes an employee directory and organizational chart, collaboration space through a company intranet portal, and document management tools. Other elements of the company’s HR platform come at a cost, however. 

Granted, Bitrix24’s free version is a pared-down iteration of their otherwise robust platform, but there are still plenty of reasons to opt for this free HR software versus its competitors. For starters, the free version of Bitrix24 allows for 12 user seats and five gigabytes of data, which is more generous than most other fee-free options out there. Your business may bump up against these limitations quickly if you’re growing quickly or already have more than a dozen employees, though.

4. Freshteam

Another option to check out is Freshteam Sprout. As with most software providers, Freshworks, the parent of Freshteam, does not provide all of their applications for free. Rather, they offer up a few choice components of their broader platform that allows smaller-sized businesses to get a flavor of what the bigger platform provides without the monthly fee. 

Freshteam Sprout, meant for up to 50 employees, distills Freshteams’s three additional offerings to the core capabilities required to manage a small business’s HR operations. This includes a basic career site, applicant tracking, up to three published job postings, and a recruitment team inbox. They also offer some employee management tools including an employee directory, employee referrals, and basic time-off management. They also offer access to Sprout through iOS and Android apps. Of course, if you’d like to put up more job postings or have tools such as resume analysis, you’ll have to upgrade to the next tier. But this can be a strong option for smaller teams or businesses that aren’t very actively recruiting many positions at once.

5. WebHR

Another appealing option for managing your small business’s HR needs is WebHR, which provides a robust set of tools in an intuitively designed user interface. The free version of WebHR incorporates time and attendance tracking, employee recordkeeping, vacation and leave tracking, document management, and even employee self-service tools. If you’re keen on letting employees take charge of their own HR records, having a self-service portal in a free platform might be reason enough for you to think about WebHR as a viable contender for your small business. 

As much as WebHR is a great option to consider when looking for free HR software, it doesn’t come without its own setbacks and limitations. The free version only allows for five seats, which is a deal-breaker if you have more employees than that. Also, there’s no way to screen job applicants’ educational credentials within the app at present, which may add a level of manual work to the hiring process you’d otherwise like to avoid.

6. Apptivo

Lastly, Apptivo rounds out our list of the best free HR software options for small business owners because it provides a comprehensive set of free features that very small companies can take advantage of. The Apptivo HR platform includes document storage, organizational chart creation, time-off tracking, payroll, benefits, and much more. Even better, Apptivo also gives small businesses other vital tools to help make it easier to get the job done across several aspects of their day.

As with most free HR software, Apptivo’s fee-free version places significant limitations on how it works. First, the platform only supports three employee seats per business, which might make it a non-starter for your business. Also, you’ll only see a subsection of the tool’s broader capabilities, but that’s to be expected with almost every free HR software offering. 

The Bottom Line

The upside of free HR software is that there are lots of options with plenty of different features for you to consider. However, as you’ve seen, if you peek under the hood, you’ll find that many free HR software options are simply pared-down versions of paid platforms. 

For many businesses, it can be smart to begin with free HR software to get a better understanding of how the platform as a whole works. Then when you’re reading to graduate to a paid plan, you’ll have a good idea of which platform will best serve your business’s needs.

Sally Lauckner

Sally Lauckner is the editor-in-chief of the Fundera Ledger and the editorial director at Fundera.

Sally has over a decade of experience in print and online journalism. Previously she was the senior editor at SmartAsset—a Y Combinator-backed fintech startup that provides personal finance advice. There she edited articles and data reports on topics including taxes, mortgages, banking, credit cards, investing, insurance, and retirement planning. She has also held various editorial roles at AOL.com, Huffington Post, and Glamour magazine. Her work has also appeared in Marie Claire, Teen Vogue, and Cosmopolitan magazines. 

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