March 28, 2023

Paid vs Free HR Software in 2024: Which is Right For You?

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Tags: HR

Key takeaways

  • Forever-free HR software typically limits the number of users you can have on one company account.
  • Free HR software also offers limited functionality and features compared to paid HR software.
  • Low-cost HR software is available if you want to upgrade from free HR software but still need to be mindful of your business budget.

If you’re looking for human resources help on a budget, the idea of free HR software might sound appealing. Free HR software can certainly be beneficial for some companies, but it presents significant drawbacks that are inherent in free software platforms.

What is free HR software?

When we say free HR management software, we are specifically referring to platforms that offer a free plan with no time limit. This is very different from a free trial, which usually lasts anywhere from one week to one month or longer before you have to commit to a paid plan. Some HR tools don’t even offer a free trial, instead only giving potential customers a guided demo before requiring them to commit to a paid plan. Forever-free HR software is distinct from both of these alternatives and shouldn’t be confused with them.

Some examples of forever-free HR software include Zoho People, Connecteam, and OrangeHRM. Most of these platforms limit the number of employees or users you can have before you must upgrade to a paid plan. For instance, the Connecteam free plan limits your business to 10 users, while Zoho People limits you to five users. Once your company grows beyond those limits, you must upgrade to a paid plan.

You should also be aware that even the best free HR software often hides features behind a paywall to encourage users to upgrade. Some “free” HR software has hidden fees that aren’t disclosed upfront, so be sure to read the fine print before signing up. Others may charge for tutorial videos, instruction resources, or other support, so you’ll be on your own if you run into a problem and don’t want to pay for help.

Who should use free HR software?

Free HR software is often beneficial for small businesses that don’t have the budget for paid HR software. Small businesses also tend to have a low number of employees, which makes it more likely that they will fall below the user cutoff for free software. If you are a larger company and need more than five to 10 users to log in to the HR software, then you might have to upgrade to paid software.

Free HR software might also work for your company if you need minimal HR functionality such as payroll and time tracking. Since some free plans intentionally limit functionality to encourage upgrades, you’ll need to consider looking for a paid plan if your company needs more robust features like performance management, recruitment, or employee engagement.

For teams that are new to HR management software, the limited functionality can sometimes be a benefit. It provides a cost-effective opportunity to get acquainted with using HR software without the constraints of a time-limited trial. If you have been doing everything manually in disparate files or paper processes, then you might find free HR software sufficient for automating simple tasks.

Also read: 14 Must-Have HR System Features

Should you pay for HR software?

You will need to consider upgrading to an HRIS system if your HR needs are growing and you need more comprehensive functionality than free software can provide, especially when it comes to reporting and analytics. You might also consider paying for HR software if you are tired of cobbling together multiple free platforms and want to move to a unified platform that brings all your HR functionality under one roof.

In some cases, you might find that your HR team has been spending a disproportionate amount of time and manual effort compensating for the limitations of free software. If you’re willing to pay to upgrade to a more advanced platform, your team can spend that time and energy on more valuable activities that will drive your HR goals forward.

You might want to look into a robust HRMS system if your team needs more support from the software vendor. Most free software platforms offer little to no support, which is another way they keep costs low, but it means your team might have to spend a lot of time troubleshooting issues using documentation and help guides.

Free HR management software also tends to release feature updates and bug fixes rarely, if at all. If your team is getting tired of dealing with software bugs and the lack of updates, you might want to switch to a paid platform that rolls out software updates regularly to patch new vulnerabilities. If you are concerned about risk management, you might also want to upgrade to a paid platform with features that are specifically intended to maintain data privacy and security.

Choosing between free vs. paid HR software

While free HR software is a great option for some companies, it’s not a solution for everyone. If you don’t have the money to spend on HR software, then you should be prepared to spend the time compensating for the limitations of free tools. On the other hand, if your team is pressed for time, then you should expect to invest in a platform that will support your HR goals.

Also keep in mind that investing in paid HR software upfront may set you up for greater success in the long run, since you won’t need to worry about running into bottlenecks and figuring out how to switch platforms. In fact, there are many low-cost options that provide the right features at a price point that will work for your budget. To explore your options, check out our HR Software Guide.

1 Rippling

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Rippling is the first way for businesses to manage all of their HR, IT, and Finance — payroll, benefits, computers, apps, corporate cards, expenses, and more — in one unified workforce platform. By connecting every business system to one source of truth for employee data, businesses can automate all of the manual work they normally need to do to make employee changes.

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2 BambooHR

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BambooHR is an award-winning HR platform that helps your growing organizations automate, centralize, and connect your people data all in one place. It gives you a one stop shop to manage data, hire talent, run payroll, and help employees grow.

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3 GoCo

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Elevate your HR with a modern, easy-to-use HRIS designed for small businesses. GoCo is a secure, compliant hub for sending, digitally signing, and organizing your sensitive HR documents and data. Manage records, performance, time off, onboarding, benefits, and more – all in one place. With the best support in the industry, every GoCo customer is assigned a dedicated Customer Success Team that is readily available to provide guidance and ensure a smooth and reliable HRIS experience.

Learn more about GoCo

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