Choosing the right HR software for your startup can feel overwhelming. You are bombarded with features, dashboards, automations and promises of data-driven decision making.
But let’s face it. When you are running a small business with just a few employees, a lot of this can wait.
So what do you actually need from day one? And what can be left until you are bigger, busier and ready to invest more heavily in systems?
Let’s break it down into three categories: must-haves from day one, nice to haves for later and things to avoid for now.
Must Haves From Day One
These are the essentials. Without them, you are risking poor record keeping, non-compliance or simply wasting hours on admin.
1. Employee Records
You need a secure and centralised way to store essential information like contracts, right to work documentation, emergency contacts and working patterns. A basic HR information system can help you stay organised and compliant.
2. Holiday and Absence Tracking
Even with just a few employees this gets messy fast. Manual tracking leads to errors, unfairness and stress. A simple system where employees can request time off and you can see who is off and when is essential.
3. Secure Document Sharing
Policies, offer letters and job descriptions all need to be stored, updated and shared in a way that is easy for everyone to access but is still secure.
We partner with Evalu-8 which is an all-in-one HR system ideal for small and growing businesses. It covers all the essentials without overwhelming you with features you do not need yet.
Nice To Haves (Once You Are Growing)
These tools become useful when your team starts to grow and you need more structure or insights.
1. Performance Management Modules
Regular check-ins and feedback matter from day one but you do not need software to do it. As your team grows, it is worth looking at systems that can help with goal setting, appraisals and development tracking.
2. Recruitment Software
If you are hiring regularly a recruitment system can help you track applicants, streamline interviews and reduce admin. But for occasional recruitment, a simple process, clear job advert and structured interview guide will do just fine.
3. Basic Reporting Dashboards
Data like turnover, absence trends and holiday usage becomes more meaningful once you have a few more people onboard. Until then, reports are not likely to offer much value.
Avoid (Until You Are Scaling)
Some tools might look impressive but they are usually designed with much larger teams in mind. They will eat up your budget and time without real return.
1. AI-Driven People Analytics
You do not need predictive data models when you have only got five employees. At this stage, intuitive decision-making and common sense are often better indicators.
2. Complex Workflow Automation
These are great for HR teams managing hundreds of employees. For you, unless you and your team are super tech savvy, they will likely just overcomplicate things.
3. Expensive Integrations and Custom Builds
It is tempting to build a perfect HR ecosystem but right now you should focus on affordable and user-friendly solutions that can grow with you.
Keep It Simple and Start Smart
The best HR software for your startup is one that
- Solves your actual current problems
- Is easy to use for you and your team
- Can grow with your business
That is why we have partnered with Evalu-8, a flexible HR platform that covers the essentials like employee records, absence tracking, document storage and more without unnecessary features or complexity. Plus the support team are based in the UK and are super friendly and helpful!
Want help setting up your HR system the right way?
At Dakota Blue Consulting, we work with startups and small businesses to get their HR foundations in place from day one. Whether you are choosing the right software, writing compliant policies or just figuring out where to begin, we are here to help.
Get in touch to find out how we can support your business with expert, friendly and practical HR advice that grows with you.