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Small businesses and startups are turning to the cloud in droves.

Why the move to the cloud? To automate back end processes such as accounting, invoicing, billing, human resources, payroll, and administrative work that used to be expensive and difficult to manage.

In this post we are talking about Human Resources. Specifically, what is the best HR software for small business, and/or a startup?

Ready to get started? Let’s go!

Successful small businesses inevitably reach a point of needing to hire employees and manage them in a system, whether it be a spreadsheet or cloud software. Many questions arise such as:

  • How do I stay in compliance with state payroll taxes?
  • What I am required to fill out when hiring an employee?
  • How do I offer retirement or health benefits to employees?
  • Where can I get insurance?

These are just a few of the questions that an effective HR system and advisor can solve for you.

Today I’ll review two HR systems that I’ve worked with in the past that have been a good fit for small business. Here are the criteria for my review of BambooHR vs Zenefits:

  • Price
  • Capability
  • Ease of Use



For complete disclosure, Lucid Books used to do the accounting for BambooHR until they grew large enough to need in-house staff.  I love the company, but again, will do my best to be objective as I review their software.


BambooHR has a pricing page that gives you an idea of what their software might cost. They charge a one-time setup fee, as well as a per employee fee. For small businesses under ten employees, you can bet that it will a very affordable solution.


BambooHR has developed an HR system with all the features your small business needs. I think at a minimum you’d want:

  • Hiring module for onboarding employees
  • Calculation of deductions and benefits
  • Add/Remove/Change employees and run HR reports
  • Integration with payroll systems

BambooHR offers the ability to post your job listing to Facebook and Indeed at the click of a button. So after you create your job descriptions it’s easy to get traction for recruitment. Another nice feature of BambooHR is their open API, which allows other companies and partners to connect directly into their system. You can see their partner network here.

Their network includes benefit management partners and payroll providers that can help ease the process of quoting employee benefits and getting your data into a payroll system for processing.

Ease of Use

I won’t go into too much detail here, but suffice it to say that BambooHR’s platform is very easy to use. The design and workflow is cutting edge, as their software was set up in the cloud from the first day. It includes a dashboard overview of your company and easy to access modules for employee management, recruiting, and reports. Just the fact that it’s in the cloud and they have mobile apps means you can access the data from anywhere, and from any device.




Zenefits has created a disruptive model in the HR industry by not charging anything for their product or service. Rather than charging a subscription fee to their end users, Zenefits is relying on the insurance commissions that their users sign up for. As such, when you sign up for Zenefits you must designate them as your new insurance broker. The payback though is that you don’t ever have to pay them a dime, and you have an insurance broker that you can ask questions.


Zenefits is a fairly new product and is adding features periodically. As such, they don’t provide the same feature set as Bamboo HR. Their reporting is basic at best and they don’t have any sort of recruitment module. However, where most small businesses need help, they have it.

  • They integrate with payroll (including ZenPayroll)
  • They quote you medical/dental/vision benefits
  • They calculate deductions/benefits and sync to payroll
  • They can pay contractors directly
  • They follow state hiring/firing laws and maintain documentation in their system
  • They do electronic signatures
  • They do stock options for employees of startups

For most small businesses, this will get the job done, and without any additional cost.

Ease of Use

Zenefits breaks from the tabbed approach to cloud software and makes everything available on the dashboard area, with a small sidebar on the right, and you can do most anything from this area.


Zenefits currently doesn’t offer a mobile app but is in the cloud so can be accessed via a browser from any device.


So, of these two platforms, what is the best HR software for small business?

If you are on a budget and don’t need a lot of the bells and whistles that BambooHR has, you might feel more inclined to lean toward Zenefits. On the other hand, if you are in growth mode you will definitely want to stick with a platform that can grow with you, and that would be BambooHR.

It just depends on what you need, choose the one that best suits your business needs.

Two big thumbs up for both platforms!