Where to Start with HR Tech: Benefits Management

Benefits management software is the last of the four HR technology tools a small business needs to be prepared for growth. Benefits management involves a lot of detail, including with sensitive information, and things get complicated very quickly, so you want a tool to help manage those details effectively. Fortunately, there are usually options to get this tool for free, or included the cost of something you’re already paying for, so there’s low to no marginal cost here. A good benefits management tool will enable employees to review and choose their benefits, communicate the relevant withholdings to payroll, and allow you as the employer to easily pull an employee’s complete benefits package or a report of everyone on a given benefit plan.

One caveat here: in hiring, a “benefits package” refers to all non-salary or non-cash benefits, including health benefits, retirement benefits, time off, etc etc. In HR, when we talk about “benefits management,” this doesn’t include time off and may not include retirement benefits, but does generally include health insurance (medical, dental, vision) along with the other insurance benefits (disability, hospital indemnity, things like that). I’ll talk more about time off management and retirement benefits in a later post.

All that being said, what are your options for managing benefits?

1. Manage them on paper. Your insurance provider will have a paper enrollment form, you have your employees complete it, and then you return it to the insurance company. This gets messy over time, as people experience life changes or your benefits plans renew and change. I don’t recommend doing this for very long, or at all if you can avoid it.

2. Use your HRIS. A lot of HRIS tools will offer benefits management functionality. Sometimes, they may require you to go with their preferred broker or insurance company (in which case, I’d recommend you get a quote from them, along with a few outside quotes, and decide based on cost and plan availability). If you have a PEO relationship, their HRIS tool will almost certainly have benefits management functionality, and your account manager will probably tell you they’re able to offer lower rates on benefits - that’s one of the perks most PEOs claim to offer.

3. Alternatively, if your HRIS doesn’t offer this, or if you’re not in a PEO, the next best option (and it’s a good option!) is to find a broker that offers a benefits management tool. A benefits broker operates on more or less the same model as an insurance broker that you would work with for home or auto insurance - you get the benefits, they get paid by the insurance company. Many modern brokers will use a benefits management tool to manage their clients, and they’ll be able to give you (and your employees) access to self-serve. If your broker doesn’t have this, it might be worth talking to a different broker - access to this tool really does streamline administration that much.

Between an HRIS and a broker, you’re very likely to have an option (and maybe a couple of options) to manage your benefits. It’s worth leveraging that database on setup rather than trying to keep everything on paper and in folders - it can be quite a mess to clean up after the fact!

Where to Start with HR Tech: Performance Management Tools

We’ve already talked about an HRIS and an ATS, and I would argue that those two (along with maybe a separate payroll tool, in some cases) are the foundation of a modern People function. In most cases, I would suggest implementing these early, somewhere between employee #10 and #20, especially if you’re growing steadily. Delaying that implementation will result in a headache for you and the HR staff you eventually need to hire.

Performance management tools are the first tool I’d suggest you consider once you’ve got a solid foundation in place. In addition to a tool, I’d also suggest defining a regular performance review process and putting together a role architecture (even if it’s sparse!). This does two things for your business:

• Risk mitigation - when you make a point of discussing an employee’s performance with them at least once a year, it ensures that uncomfortable conversations with underperforming team members aren’t put off indefinitely. It’s understandable that busy managers (especially those who don’t have a lot of experience) might put off telling someone that they’re not meeting expectations, but letting underperformance linger makes it more difficult (and risky) to take action later. Legally, situations that you let linger are situations that you’re implicitly okay with, so you have to take extra steps to manage someone out of the business when they’ve been underperforming for an extended period of time. And managing someone out is uncomfortable at the best of times, but it’s even worse when it’s a situation that has dragged on for too long.

• Employee engagement - people know when they join a start up that their role is likely to change and evolve over time. That’s expected. There comes a point though where you have multiple people doing more or less the same job, but with clearly different levels of experience and competence, or an employee who has been with your organization long enough that they have clearly exceeded the expectations of their role, but it may not be defined what promoting them should look like. Having a role architecture and regular performance management conversations means:

  • Employees know what growth opportunities are available to them within the organization. You’re giving people a framework to make that ask, and you want them to make that ask to you, not to your direct competitor.

  • When it’s (past) time to promote a strong performer and recognize them for their hard work, you don’t have to spend a month discussing “But what are we promoting them into? What does it mean to be a Senior xyz?”

I’ll write blogs on building out your role architecture and creating a performance review process in the future, but for now, how would you go about selecting a tool? If you’re running a growing business, controlling your expenses is almost certainly on your mind, so the first place I’d look is your existing tools. Some HRIS options will have performance management functionality, and it may already be included in the plan you’re paying for. If your HRIS tool doesn’t offer this, you could also look at any wiki tools or workflow management tools you use - you may be able to leverage those, assuming there’s a way to keep private notes (ideally between managers, their team, and HR and no one else). You’ll be looking to set up regular check ins, with templates to keep conversations on track, and notes so there’s a record of what’s discussed. That won’t give you all the bells and whistles, but it’s enough for a minimum viable product.

If none of those options will work in your situation, the next step is to look for an outside option. There are lots of them, but I think this blog from PerformYard gives a good overview. They’re obviously biased, and they’ve put themselves at the top of their list, but PerformYard is generally a good option, and cost competitive from what I’ve seen. Lattice, 15five, and CultureAmp all have active online presences; if you’re trying to get a handle on what’s considered “good” in the performance management space, I’d suggest taking a look at what they’re sharing or follow them on social media and pick it up over time.

Where to Start with HR Tech: The ATS

Any recruiting operation with more than a couple of open roles needs an ATS, or an Applicant Tracking System. This is a database system that will post on all the big job boards, collect applications, and make it easy to review, sort, and automate outreach to candidates. This is important because one of the biggest challenges in recruiting today is the sheer volume of candidates. The proliferation of AI tools that will apply on a candidate’s behalf means that some applicants apply to everything. I’ve seen posted jobs get 1,000+ applicants in under a week. If those applications are all landing in your inbox, you may find it difficult to get any other work done that week! A good ATS will do a few things:

• Manage the flow of candidates separate from your regular inbox. You can still turn on notifications so you know when applications come in, but the ATS will store application materials and any emails you exchange with a candidate, making it easy for someone else to step in and pick up the conversation, schedule interviews on your behalf, take a look at candidates and provide feedback, etc.

• Post on job boards. Most ATS solutions will have an API set up with the big job boards, and will post your jobs for free. This means you don’t have to go to four or five different job boards and post them separately. Most ATS options also have a marketplace where you can choose to pay to post your job on a specialty job board, if that’s needed as well.

• Get other people involved. An ATS means that you can easily share a shortlist of candidate profiles to a hiring manager or interviewer, and they’ll usually be able to provide feedback or comments in the system.

• Connect notes or application materials to the right candidate. It’s manageable to keep notes and comments for one or two people in your regular organizational process, but when you’re six months down the line and 10 hires (and hundreds of interviews) later, you’ll wish you had all of your materials about a given person in one place.

• Send emails and schedule interviews with minimal back-and-forth. An ATS will let you create a standard template for the common messages you’ll need to send (such as “we’re not moving forward with your application,“ “we’d like to schedule an interview,” “here’s an overview of our benefits package,” and others), and you’ll be able to easily drop in the candidate name or role title. This allows you to send emails to a number of candidates at once, while still maintaining a positive and warm candidate experience. Even better: more and more ATS systems are including scheduling functionality or integrations with tools like Calendly to allow candidates to schedule interviews with hiring managers without the need for a lot of back and forth.

Like most things in the world of HR tech, there are a LOT of options for ATS systems, but most of them will fall into three buckets:

• Add-ons to existing tools. If you implemented BambooHR or another HRIS tool to manage your employee data, then you may already have an ATS, you just need to set it up! In some cases, this may involve an add-on cost, but a number of HRIS platforms include ATS functionality for free. This approach may not come with all the bells and whistles, but you can be confident it will integrate well with your current tool set, and it may be more than enough for most job postings.

• Free ATS solutions. Everybody loves free, right? There are a few free ATS options out there, especially if you only have one or two roles open at a time. This article shares a number of options that are current as of 2025, but I do want to caveat: many free ATS solutions are looking to convert free users to paid, be that by restricting some functions, completing beta testing and then converting the whole platform to a paid approach, or significantly limiting the support that is available. It can be a good short-term approach, but you can expect to hit the limits of this solution relatively quickly if you continue to grow and expand your recruiting operations.

• Paid standalone solutions. There are a number of standalone ATS options to consider as well! These range from tools designed for small teams (Breezy HR and JazzHR are the front-runners there) to bigger platforms designed to support external recruiting teams that might have roles for multiple clients. This article from Zapier gives a good overview of what’s out there, although as always, there are other solutions if you go looking for them! You might want to consider one of these if you’re expecting to have a large number of hires in the near future or if the majority of your roles will be particularly difficult to source - sometimes these solutions are better suited to high volume recruiting or passive candidate outreach.

If you’ve ever worked with a database like Salesforce or Microsoft Dynamics before, you may find yourself thinking “isn’t an ATS just a database? Why pay for something I could build in Microsoft Access?” And the truth is, you’re right, an ATS is just a relational database, optimized for recruiting. You certainly could build this yourself if you’re technically inclined and have a lot of time on your hands, but personally, I wouldn’t recommend it. There’s a lot of competition in the ATS marketplace, and that means that prices for these tools are relatively low, and almost certainly cheaper than the time investment that would be required to get a homegrown solution up and running.

Where to Start with HR Tech: the HRIS

If you employ people, you’re going to need some form of an HR Information System, or HRIS. This is the system that serves as the source of truth for all of your employee data (titles, start dates, compensation history, etc), and handles some basic (but not simple!) functions like payroll. In theory, you could run payroll manually and store all of your employee data in a folder somewhere, but I can’t think of a single example where that’s a good idea. Modern payroll functionality handles the calculations involved in paycheck deductions, and is far more scaleable - you might be able to get away with running payroll for one or two employees by hand, but by the time you’ve got 10, you’ll spend all of your time doing nothing but payroll, and making mistakes in people’s pay is a recipe for hefty fines.

The range of options for an HRIS is wide - the HR tech market is saturated and there are options for everything. The best in class option is Workday, but I’ve never seen a use case for a small business that justified the investment (you can expect to spend $20k or more on an annual Workday subscription). For a small business (<20 people), there are three approaches I’d consider:

• HRIS/Payroll tools designed for small to mid-sized businesses: BambooHR, HiBob, Gusto, and “the Pays” (Paychex, Paylocity, and Paycom) are some of the names here. These can be low cost, and are often priced by headcount, so you’ll pay something like $25 per employee per month. These are tools that are designed to scale and are often used by organizations with 100 or even 200 employees - I’ve heard of companies with over 1000 people using HiBob - so investing early means you’re well set up to grow, but the pricing structure means you’re not overinvesting when cash is tight.

• Barebones payroll solutions like Quickbooks or ADP Run. These often are selected because it’s an easier set up, especially for small teams that might already be using Quickbooks for accounting or that already stores employee data in a secure folder, so they’re focused on just the payroll piece of functionality. The challenge with both of these is that they’re very narrow solutions - they often only do payroll. They might be easier from a Finance side, but they don’t scale well, and they don’t offer the same integrations and employee self-serve options. If you search for these, you’ll also see tools like Gusto and BambooHR appear as competitors, and to my mind, those are better options that allow for growth and customization to better fit your needs beyond payroll.

• Professional Employer Organizations (PEOs) such as Insperity, Justworks, or ADP TotalSource. These are full-service options that will include an HRIS solution in addition to benefits offerings, performance management tools, applicant tracking, and compliance support. Working with a PEO means that you are entering into a co-employment relationship with the PEO, and they share the risk in employing people. They will take care of some of the administrative tasks, such as registering with various states where you employ people, and ensuring that you’re following current legislation. They also provide Employment Practices Liability Insurance, which means you’re covered in the event that an employee makes a claim. A PEO can be a great way to offer generous medical insurance at lower premiums, and for risk-averse companies, the compliance coverage can be very reassuring. You do give up some control though: PEOs often expect to be included in termination decisions, you may not be allowed to bring your own benefits, and they often retain control over employee data, so when there’s an error, you need to work with their support teams rather than fixing it yourself. In my experience, PEOs can be hit or miss, and you have to stay on top of managing that vendor relationship because they have more control over your employee data and employee experience. They’re also more expensive (often priced as a percentage of total payroll), as they’re offering a lot more than just a technical solution.