What is HR software for startups?


HR software is a tool that helps startups manage their hiring, interview scheduling, payroll management, benefits administration, attendance management, employee data storage, and many other employee-related tasks on a day-to-day basis. 

It reduces human effort and provides HR professionals with more time for tasks that really need their attention. But there’s a lot more that HR software contributes to than this. 

Why does a startup need HR software?


Startups grow at a rapid pace, and with the right HR software, they can lay their foundation well by attracting, hiring, and retaining the right people from the get-go. Doing so will have a long-term positive impact on the startup’s growth and sustainability.

The people you hire, especially at the initial stages of growth are crucial. So you need to attract the right talent and hire and train them the right way. These steps can very quickly become too expensive to handle, especially for startups. 

The right HR software enables you to control the entire process right from the beginning by managing multiple job boards and postings simultaneously, automatically screening candidates based on custom criteria, and ensuring a smooth interview and onboarding process—all from a single dashboard, much more efficiently and proactively than with spreadsheets.

Having a small team means that every single contributor plays a major role—this makes having proper communication all the more important. HR software enables you to track employee performance in a streamlined manner and helps manage their appraisal cycles a lot better. 


Unexpectedly, using HR software is a lot more economical than using spreadsheets. There is plenty of free HR software for startups to help manage your talent pool. HR software also enables free posting to multiple popular job boards which otherwise end up costing a significant portion of your hiring budget. 

Research shows that it costs an average of 33% of an employee’s annual salary to replace just one employee. By enabling better employee engagement and retention, HR software also reduces the cost of turnover for startups. 

HR software saves time by automating a lot of mundane, repetitive HR tasks like resume screening, candidate rejection, online assessments, notifications, leave management, etc. This leaves more time for the HR team to spend on tasks that really need their attention and help them build better employee relationships.

Not using HR software can put startups at a serious disadvantage because it directly affects the startup’s growth trajectory. Look for features that you need before choosing the right HR software for startups. Speaking of which—

Features of HR software for startups

What features should you look for when choosing HR software for your startup? 

Features of HR software for startups Features of HR software for startups

When does your startup require HR software?

Here are 3 signs that your startup needs HR software:

1. You’re starting to wonder if spreadsheets are not doing the job for you

It seems very obvious, but if you’ve come this far, you might want to consider HR systems for startups—take a few free trials, no pressure!

2. Paperwork is taking more time

Hiring, onboarding, engagement, appraisal, retention, offboarding—all of these stages require tons of record-keeping and admin work—If you find yourself nodding along, it’s time for your startup to get its HR solutions in order. Why do it manually when you can automate them all?

3. You’re hiring

If your startup is hiring more people this month than it did last month, you definitely stand to gain by using HR software for your startup.

What makes Freshteam the best HR software for startups?

Freshteam parses resumes and populates their contents in the candidate profile automatically. You can add tags to candidate profiles to pull up similar profiles, add comments under candidate profiles and tag your team members to collaborate and choose candidates easily. 

Freshteam comes with over 50 inbuilt job descriptions that you can use right away. Create jobs and share them on social media platforms from within Freshteam and also tag different profiles with its hiring team to ensure faster hiring. Freshteam also enables you to archive resumes to the talent pool for later perusal.

Freshteam integrates with popular job boards like LinkedIn, ZipRecruiter, Indeed, Monster.com, and more. Manage job postings on all of these platforms right from within Freshteam without having to juggle multiple subscriptions. Freshteam also integrates with candidate assessment tools like HackerRank, Mettl, Skype, and Hangouts. 

Freshteam enables you to track the source and medium that each candidate profile came from. This enables you to identify the source that your best candidates are coming from and advertise more there while spending less on avenues that aren’t giving you the best results. 

Freshteam enables you to set custom hiring automation for each job created. Automate repetitive tasks like resume screening, candidate assessment, interview scheduling, onboarding, etc, with Freshteam in a matter of minutes. 

Create custom career sites with no coding as per your brand requirements. Freshteam optimizes your career site for mobile as well. Choose from multiple templates and add your own branding to stand out from the competition.


How to find the best HR software for your business?

Here are 4 steps to find the best HR software for your startup:

1. List down your requirements—should it be within a certain price range? Does it have all the features mentioned above? 

2. Sign up for free trials of the HR software that satisfies your requirements. Get demos for the software plan that you are interested in.

3. Look for reviews on popular software review platforms, and keep an eye out for customer reviews from companies that have < 50 employees for a startup.

4. Take advantage of the free plan while you shift operations from spreadsheets to the HR software of your choosing. You can upgrade to paid plans once you are comfortable with the software you’ve chosen.


Are spreadsheets good for HR management for startups?

A lot of startups do manage with spreadsheets, although ‘manage’ is subjective. Here is why spreadsheets aren’t enough:

  • Time:

Every time a new job application comes in, every time an employee takes a day off, every time you need to track employee performance, it all needs to be entered manually on a spreadsheet. With startups being understaffed and hectic by nature, spending any time more than necessary, especially on spreadsheets can be counterproductive. 

  • Data:

As against HR software for startups, spreadsheets make data analysis inefficient and chaotic. The data is spread across documents and it’s difficult to analyze all the numbers quickly and accurately. This inevitably delays decision-making and causes errors in hiring budgets and timelines. 

  • Employee reliance:

Spreadsheets aren’t and shouldn’t be accessible to all employees due to the presence of sensitive/confidential employee data. But this also means that employees need to depend more on the HR department to get basic information like upcoming holidays, time-off availability, health coverage details, and so on. 

  • Out of date:

Spreadsheets need to be updated manually at regular intervals to keep the employee data from becoming outdated. Failure to do so might lead to incorrect decisions and affect the hiring process negatively. Are spreadsheets really worth the pain?

  • Not secure:

And of course, spreadsheets are not the safest way to store employee data. The data can be deleted or altered by the people it is shared with, and there’s also the risk of the data being opened from unprotected devices which leaves it vulnerable to multiple security breaches.