When do you need HR software as a small business?
Whether you need HR software as a small business depends not only on how many people you have. Sometimes you manage just fine with ten employees without a system. Sometimes you lose track with just six. Size plays a role, but it's the signals that make the difference.
When is it time for HR software?
There's no fixed boundary, but here are five signals that most small businesses notice when the informal approach no longer works.
You no longer know who is off when. As long as you have four people who arrange it among themselves, that works fine. But at some point, someone asks: "Wait, weren't you also away that week?"
You no longer know what belongs in an employee file. Which documents do you have to keep and for how long? What do you do with a contract that is about to expire? These are questions that start small and grow as your team grows. A well-organized file per employee is legally required, and without a system, it's easy to overlook things.
Your team is growing and agreements are made verbally. From five to ten employees is a small step on paper, but in practice, a lot changes. New people join whom you don't know as well, and what used to happen naturally now needs to be documented.
You are considering hiring an HR employee. Often because you've lost track and think an extra person will solve it. Sometimes that's true. But sometimes a good system is enough to regain control, without having to hire someone. And if you later do hire someone for HR, they can start right away.
When someone leaves, the overview disappears with them. How many vacation days were still open? What was agreed upon in the last performance review? That knowledge walked out the door with them. That's the moment when many small businesses realize that informal storage is a risk.
I recently spoke with a small business that had grown from 8 to almost 15 people: a mix of employees in the Netherlands, people abroad, and a few freelancers they also offered vacation days and sick leave. All that information ran through email and a handful of Google Forms. It worked, but at the same time they knew they'd reached a point where something would eventually go wrong. That was the moment when "it still works" no longer felt like enough, and they chose Heartsome.
What Heartsome does
Heartsome is HR and recruitment software for small businesses: employee files, leave, sick leave, and hiring in one place. Starting at €1 per employee per month.
More about Heartsome for small businesses →
And if it's still too early?
Earlier this year I spoke with an entrepreneur running a team of six. Everyone worked autonomously, had their own client portfolios, and vacation was sorted among themselves. Nothing was written down, but it just worked. After the demo he was positive, but decided not to start yet because it still didn't feel like the right time.
"I'd look into it sooner once I'm heading towards ten people, or when I'm going to hire an HR person."
Fair enough.
If that's where you are, that's completely fine. You know where to find us when you start noticing the first signals, or when you want things properly sorted without having to think about it every time. Until then: good luck building your business.