Sabrina

Welcome back to the HR Connection, the podcast built solely for those managing human resources in a 1 to 500 employee organization. My name is Sabrina Baker. I am your host of the HR Connection. Normally, I am joined by Marie Rolson, who is an HR business partner with Acacia, but today I have a special guest. Penelope Angulo is our payroll and operations manager. She is our tech guru, and she is here to tell you about a project that she has been working on since the beginning of this year that will be launched over time that is going to help you make better decisions about your HR technology. As you will hear, I have lots of ideas for our business, and I am always trying to figure out the right time to start working on these things. And I knew that this year was the year that we needed to do two things: release a cohort and release this HR tech guide built by someone using HR tech every single day. I think you're really going to enjoy what Penelope has to say. Let's get into it. If you've ever tried to find the right HR software for a small business, like actually sat down and researched it, you know how frustrating that can be. The reviews are written for enterprise companies. The comparison sites are either outdated or clearly pay-to-play. And the demos, you spend 45 minutes on a call just to find out that the pricing starts at more than your entire HR budget for the year. So today I'm bringing on someone from our own team who decided to do something about that. Penelope is our payroll and operations manager. She has been with us for a couple of years now, and she has been heads down building something that I think is going to be genuinely useful for our entire community. It is going to be a real hands-on HR tech guide built specifically for small employers by someone using the tech. So Penelope is in the thick of this every single day with our clients using technology. She is our technology expert, and she is going through and thinking about this from her own perspective and that of our community. Penelope, welcome to the HR Connection.

Penelope

Thank you. I'm really excited to be here and to finally talk about this. This is a project that has been living in your head for a long time, in Sabrina's head, for people that don't know, and then also in spreadsheets, sticky notes. So it's fun to give it some air.

 

Sabrina

Yeah. Lots of projects live in my head, don't they, Penelope? Lots of ideas that I'm always like, ooh, I want to do all the things now. But this one is definitely one that, just like the cohort, which we announced a couple of weeks ago that I had been thinking about for a while, and I just really think that it's going to be so helpful. So let's start there. Let's start at the beginning with why I decided we needed this in our lives. As with everything small business, HR, and I know people have heard me say this a million times, but there is this massive gap in the market surrounding information, and specifically around HR tech. So I spent many years going to HR conferences and would peruse the exhibit hall and would ask tech vendors what their threshold to entry is, who are they catering to, what employee size, and never did I hear, not hardly ever did I hear, that they would take small businesses. And I know that they exist, but it's really hard to find them. You can find all kinds of info on HR tech for enterprise, but there are no ranking sites, no informational portals that tell you what might work best if you're, say, a 50-person firm. So you really have no choice but to default to the brand names like ADP, Paychex, Paylacity, and hope that you're getting a really good deal. So I had been sitting on this for a while, like I do many things. And just as I said, like the cohort, which we've already announced, I decided that 2026 was the time to get this rolling. And so Penelope, as our payroll and operations manager, you obviously work in tech systems, as I mentioned, across our clients, and you are our tech guru internally. So as I tried to build out software, you are the one that I often mess it up and then hand it off to to fix. I can be honest about that. And so you were going to be the absolute person and the obvious choice to take on this project.

Penelope

Yeah, that's right. And I have seen the lack of information firsthand because of this real experience we live on the day-to-day. We will often have clients come to us and want to explore a new HRIS. And because it was hard to find information on all available systems, we default to a few trusted partners each time. And don't get me wrong, the partners are the right partners for the specific clients that we have, but sometimes clients ask for other demos. And before this project, I never knew where to send them.

Sabrina

Right. And I think that's something our listeners feel really deeply. It is super hard to know where to go for really good advice on what to do or implement when you are in a small environment. So tell me, what do we know to be different about small environments when it comes to how they think about or have to think about HR tech?

 

Penelope

Yes, I can think of a few things. Number one is budget. We're not spending enterprise money, so pricing and value matter a lot more. Number two is staff. At a small company, the person evaluating HR tech is very often the person running payroll, managing benefits, and answering employee questions all in the same afternoon. So the ease of use isn't a nice-to-have. It's a deal breaker if they don't have it. And number three is just complexity. Small businesses don't need every feature. They need the right features. And the features have to be configured simply. That means that it's not going to break when you have a turnover event or when you have a weird pay period. We want an easy-to-use system that's not going to break.

Sabrina

Yeah. Yeah, I think those three are absolutely you kind of hit it on the head there that obviously, we're always looking at budget in small environments, always, always. And then that staff piece, meaning that this same person who's running all of these things is going to also have to implement and use the system, right? So that ease of use, those integrations, I know that's something that's always top of mind for you is like, what does it integrate with? How complex is it for not only internally for the HR leaders, but also potentially for employees to use if they're going to have a self-service option or time and labor? How hard is that? And before this, there has been absolutely nothing out there that spoke to those realities.

Penelope

No, not really. Not in a practical kind of way. So that's what we're building ourselves and will be sharing very soon.

Sabrina

All right. So let's get into what this thing actually is that you are building. What categories of HR tech are you going to be covering?

 

Penelope

Yes. Well, we're going to be wide but focused. The categories are things that most small businesses with, say, 5 to 100 employees are going to encounter. So payroll and payroll integrations, HRIS and people management platforms, onboarding tools, time and attendance, benefits administration, applicant tracking for recruiting, and also performance management. Those are the core buckets that we are actually looking for in this first iteration of the HR tech.

Sabrina

Yeah, that's a really solid list. And I think to your point, this first iteration, we wanted to go core, core products. And then, of course, over time, we'll be expanding that out to other things. But I think that when you think about small environments, they sometimes can only afford core functions. They can only afford to have software that handles their core functions. So really solid list. And within each of those categories, how many tools will you actually be looking at?

Penelope

It really varies. In some cases, there are three to four really prominent players, and in others, we have more. I'm not trying to be exhaustive. I'm just trying to be useful. So I'm focusing on tools that small businesses realistically encounter or should really know about. Not every option in the market is going to be geared towards them.

Sabrina

Yeah, I think that's such an important point is that we want to be useful here. We're not trying to be exhaustive. This is not in this, especially this first iteration, are we trying to cover every tech tool on the market because there are thousands of them, right? And so many of them don't speak to our clients. They don't speak to our community, our audience. And so we really are trying to pull out the most important ones that are going to fit to our listeners and really focus on that first. So how are you actually getting into these tools? Are you doing full demos? Are you doing free trials? What's your process been?

Penelope

Yeah, it's a little bit of both, depending on what's available. For tools that have a genuine free trial, I am using that. I'm setting up a test environment. I'm running through the real workflows, importing fake employee data, the whole thing. And for the other tools that do a demo only, I'm doing the demos, but I'm also pushing hard to see the actual product, not just a guided tour of the best features. I want to know what it's like to troubleshoot something or what happens when you make a mistake and need to fix it. That one has been a little bit of a trial and error, but we're getting there.

 

Sabrina

Yeah, I love that. And it's part of the reason why, one, I wanted you to own this project because I knew that you would think about it a little bit differently. I knew that you would want to do more than just a demo. You can only see so much from a demo, and you're only going to get what the vendor wants to show you. But I knew that you would push a little bit more just your experience and your personality and how you love to have all of your I's dotted and your T's crossed. I knew that you would push a little bit more to think about the practical usage of it, not just what you can show me on a screen, but practically what happens when things break. And think about our listeners. Some of them are HR departments of one, managing the system. Something breaks, they don't have time to spend hours and hours on customer service, right, trying to get something fixed. And so I love that you are thinking about stuff that doesn't show up in demos, right, that recovery piece.

Penelope

Yes, exactly. That's right. And honestly, how a tool handles those errors tells you a lot about whether it was assigned for real users or if it was just a sales cycle. I think we have all been hurt by that where salespeople, they're lovely, and they sell you this super golden product. And once that you buy it, you realize it was just fool's gold. So we're trying to avoid that for our clients.

Sabrina

Absolutely. And you know what else that I know to be true is that a lot of your big vendors have just kind of stripped away features and said, oh, now this is our small business offering. And so I love that you're digging in enough that you're finding out, is this something that's really going to be helpful for small businesses, or is it just this stripped-down software that really gives them nothing? Like in order to get it into the price, they stripped out all of these features to say it's small business focused, but small businesses still need the features. So I think that one of the things we're trying to do with the list, curating the list of who's actually catering to a small business and who just stripped out features to say that it's available to small business, I think that's really important. All right, Penelope, so let's talk about how you're actually scoring these things, because obviously, "I liked it" or "it has good vibes" isn't really a guide. We have actual frameworks that you are using to make sure that we are comparing everything the same, to make sure that you are looking at things, and that it's not just based on how you personally feel, because you obviously have your favorites of the systems that we use, but it's not how you actually feel. It's really this kind of unbiased framework. So tell us, what is the framework that you are using?

Penelope

Right. Yeah, we actually wanted to be fair towards all vendors out there, even though I do have my favorites here and there. So that was one of the things that I spent the most time on, making sure that the criteria actually reflected what matters for small businesses and not just what the industry measures or what I think it's a good software. So we landed on five core areas. The first one is the ease of setup. Can a non-technical HR person get this running without professional services? And how long does it realistically take? The second one is the ease of ongoing use, because one thing is the setup, and the other thing is living with the day-to-day interface forever.

Sabrina

Yeah, I think that distinction is so important. I've certainly seen tools that are terrible to set up but great once you're in there, and then vice versa. Certainly had experiences where implementation was DIY. You figure it out and you do it. But then once you do that, it's a great tool, and then vice versa. Others where the implementation was a little bit more hands-on and the vendor was very involved, but then once they left, we did not know what to do. So certainly seeing that where it's terrible on one end or the other, but great in the opposite.

Penelope

Yes, totally. And both matter, but they're different. Then the third one that I can think of is pricing transparency. Do they actually tell you what you're going to pay, or do you have to get on a call to find out? And is it predictable as you add on employees? What we have known is that businesses grow, especially small businesses. So that's a very important part of our criteria. Number four is the customer support. At a small company, you don't have an IT department to troubleshoot things. So if something breaks on a Friday afternoon, can you actually get help? Fifth would be integration. Does the system play nicely with the other tools that you already have, like common payroll platforms, accounting software, that kind of thing?

Sabrina

Yeah, I love this list. I'm just going to reiterate them real quick. So first is ease of setup, so how easy it is to set up, how easy it is to implement. Then ease of use, so how easy it is ongoing use once you've set everything up. And then we have pricing transparency, which is huge, right? Because obviously, in small environments, you are dealing with a very small budget, a very fixed budget. You don't have a lot of money for extras. And so not only your pricing transparency at implementation, but as you said, adding employees or adding modules, what is that cost going to look like? It's one of the things we talk about with software, with PEOs. We know who has these hidden fees, that the implementation is one thing, but then there's always these extra costs. And so I think that's going to be a really important piece of your framework here. Customer support, absolutely. It's so important, again, because you can be an HR department of one. You don't have time to sit on four hours of wait and help and then not get the help. And so the partners that we use and we love, I think part of the reason that we love them is because of their customer support, that we do find it easy to get a hold of somebody and to get a resolution. And then integration, yep, you want your systems to talk. And especially as we talk about scaling businesses, we want to make sure that as we add software, as we grow and we're allowed to add software, that then it integrates with what we already have. We don't want to have six systems not talking to each other. You and I did a whole episode last year, right, about that and how we would never want to have six systems not talking to each other. So I think the integration piece, and not only with other HR software, but the accounting software, which is going to make it so much easier for general ledger stuff, is super important. So are you go ahead.

 

Penelope

And you don't want to grow one system and then have to grow five more. So you have to be very strategic about all of the systems that you're using in the company and how big are you going to scale them down the road?

Sabrina

Absolutely. So are you weighing those equally, or does each one carry different weight?

Penelope

We weighted them based on what we hear most from small business HR. So the ease of use, both the setup and the ongoing one, carries a bit more weight. But honestly, a tool that tanks on any of these categories is going to have a really hard time ranking well overall because of all of these things really matter when you're a team of one. You don't feel the impact if a system is really not working when you have a big department, 10 people within the HR department. But if it's just you, yourself, and I, you're going to feel it.

Sabrina

Yep, absolutely. So I know you've all this has already started, right? You're already in the process of this. You're building it. You've been doing demos through Q1. Do you have any surprises so far in what you found, anything that's gone against your expectations?

Penelope

I do. I have a few. Some of the tools with the biggest marketing budgets have been genuinely harder to use than I expected. And there are a couple of smaller, quieter players that have really impressed me, which is how thoughtfully they are built for this market. So I'm just excited to shine some light on those and to share that with the rest of our group.

 

Sabrina

Yeah. I just want to pop in here and tell our listeners how we use software. So we are fractional HR, embedded HR in our client spaces. We do not force them to move into any software. So they come in, whatever HRIS they're using, whatever payroll system, whatever non-payroll system, if they're in spreadsheets, whatever they're in, we will work with it. But if they are looking for something new, if they say they don't like their HRIS or they are in spreadsheets, we will definitely try to get them onto a system. And so because of that, we work across many different platforms already. We have, again, mostly Paylocity. We work with quite a bit, but we have Bamboo. We have ADP. We have Paychex. We have a lot of your, I guess, what you would say, your brand name players that we work in all the time. So we already kind of had those, and of course, those will be on our list. But you've really been kind of reaching out and trying to find maybe some more obscure ones, the ones that we haven't used as much or we hadn't even really heard of. Some of these we hadn't even heard of, I think, until you started doing your research. And so it's really going to be, hopefully, a comprehensive list of, yes, you've got your brand names and your big names and people who the things you obviously know, but maybe some of those few smaller players, to your point, who they don't have the marketing budget, but really, when we dig in, their platform is really solid.

Penelope

Yes. Yeah, that is correct. And then something that you said, too, for those big names is that whenever they cater towards the small employers, they strip down a lot of things. So that is something that sometimes they're not aware until they sign the contract and they realize that they can only run payroll. So we're going to be really those names are going to be included in the list, but I just want people to know that, yes, we went wide with this net, and some of the names we haven't heard before.

Sabrina

All right, Penelope, so this is obviously a very big undertaking. It is a project that I laid out for you in Q1. It'll be an every quarter project. This is going to be on your plate until eternity, maybe, definitely for a long time. We have talked a lot about how we want to roll this out, making sure that we get it in front of the right people. And to your point, we want this to be really, really useful, and so making sure that we're getting it in front of the right people who are going to want to be able to use it. So tell our listeners what we landed on as to how we will be sharing our findings.

 

Penelope

Yes. It's been actually really fun working on this project. And then I could see myself working on this for eternity. So yes, Sabrina. But because of that, because it is a huge undertaking, it's going to be a phased-out project. So we're releasing it category by category instead of waiting until everything is done. So the first categories we'll publish while I'm still working through the later ones. That way, people who need guidance on, let's say, payroll tools or HR tools, ATS, whatever it is, don't have to wait six months for us to then launch performance management.

Sabrina

Yeah. So it is a living guide. It is something that it's not a one-and-done thing. It's something that we will be adding to over time. Even when we're through all of these categories, we might come back and revisit again because new software will be added or whatever. So it is absolutely a living guide, not a one-and-done thing.

Penelope

Yes, that's a goal. HR tech changes fast. The pricing changes. The features get added. Companies get acquired. So we're planning to revisit and update reviews in our regular cycle so that the guide stays accurate over time.

Sabrina

Yeah, I think that's great. And where will people find it? So what's the best way for our listeners to follow along as it comes out?

Penelope

Our email newsletter is one. That's where we always send those first drops. If you aren't subscribed there, check out the link in the description box. And I'm sure you and Marie will add the blurb in the podcast episode that drops around the same time as well. We'll also be posting updates on LinkedIn. And if people have specific categories that they want us to see prioritized, we genuinely want that feedback. If they have a software that they want us to test, try out, just drop comments in the link, and then we'll make sure to look into that. It really helps us focus on what's the most useful.

Sabrina

Yeah. Yeah. So our email newsletter gets the first drop. I'm sure we will put a blurb in the podcast episode when we have a drop as well. And then, of course, connecting with any of us across LinkedIn, you'll see that we all tend to share content when we have something like that. So connecting with Penelope, connecting with me, connecting with Marie, however you want to do that. But then I love that piece about listener input. We always want listener input, and we do use that to actually shape what gets covered first. I always say that HR in a small business, it's not just small HR. It's not smaller enterprise HR. It's its own discipline. And we know that while we're working in it, we don't have the market cornered on everything that happens inside of small businesses. And so we need to learn from people who are listening and other people who are inside of small environments. So we always want that listener input and do absolutely use that to shape what you're going to cover in this guide.

 

Penelope

Yes, 100%. This is being built, Doug, for this community, so it should reflect what they actually need and want.

Sabrina

Penelope, this is such needed work. I'm so excited about it because it was in my head for a long time. And I think that anyone who has tried to evaluate HR tech for a small business is really going to find this super valuable. Before we are done today, before I let you go, is there anything you want to say directly to the people who are going to be using this guide?

Penelope

Yes. Just know that I'm working on this for you. I have been on your shoes. I'm trying to make a smart decision with limited time, limited budget, and no one to really ask about anything. I wanted to create the resource I wish I'd had. So I hope it saves people some real headaches, and I hope it helps small businesses invest in tools that actually make their lives easier.

Sabrina

Perfect. Thank you so much for coming on and for doing this work. I know our listeners are going to be following this very closely.

Penelope

Thanks for having me. This was very fun.

Sabrina

All right, folks, links to follow the guide as it comes out, so links to our email list, links to connect with Penelope or any of us on LinkedIn, and of course, our website will be in the show notes. If you found this episode useful, share it with someone in your network who's managing HR at a small business. And if you didn't hear about the HR cohort that we are also launching, that link in details. We have a podcast episode about it and then a webpage where you can sign up. That will also be in the show notes. Thanks so much for being here, and we'll see you next time.