New research indicates small and medium-sized businesses (SMEs) worldwide are leveraging HR technology to navigate regulatory changes and accommodate new workforce trends, particularly when it comes to health & safety.
BrightHR’s Leaders in Tech report, which highlights usage data from over 100,000 SMEs globally, underscores the growing role of HR technology in streamlining operations, improving employee engagement, and supporting businesses through a complex landscape shaped by regulatory change, economic pressures, and rapid technological advancement.
“As 2025 approaches, SMEs are facing a perfect storm of challenges, including rising costs, employment law reforms, and an accelerating pace of digital transformation,” said Alan Price, CEO of BrightHR. “In the UK, where the Autumn Budget and Employment Rights Bill are poised to introduce significant changes for all employers, technology is proving indispensable in helping businesses stay compliant and improve their operational efficiency. With almost half (42%) of SMEs surveyed by BrightHR saying they are ‘not confident’ their HR practices are compliant with existing employment laws, the use of technology to ensure compliance is more important than ever, and will become even more vital in the months ahead as tax adjustments and legislative changes start to come into effect.”
Key findings: HR tech adoption accelerates across small businesses
- Use of e-learning courses for HR and health & safety compliance is growing rapidly: In the light of new regulatory requirements and the changing nature of work, training employees and managers in employment law and workforce changes has become essential for businesses looking to stay compliant and competitive in a fast-moving regulatory landscape. In the past year, the BrightHR Learning Management System (LMS) saw over 750,000 e-learning courses completed globally, a staggering 1,289% increase on the previous year, highlighting a growing trend of business owners turning to online courses to train their staff in changing employment laws and meet new regulatory requirements. Of the courses, ‘Health and safety awareness’and ‘Equality, diversity & inclusion awareness’ were among the three most popular, highlighting how e-learning courses are growing in importance as a tool for employers looking to quickly and easily assign their staff training on critical HR and health & safety regulations and avoid legal penalties for non-compliance.
- Scheduling software and remote clock-in technology are helping businesses adapt to flexible work arrangements: As businesses adapt to changing workforce expectations, with research by the British Chambers of Commerce indicating that only 27% of UK SMEs expect their workforce to be fully in-person over the next five years, technology is proving vital in helping employers accommodate flexible work arrangements. In the last twelve months, over 3.4 millionclock-ins were logged through BrightHR’s time-keeping app Blip—a 40.9% increase year-on-year—while over 10.1 million minutes of work (approximately 168 million hours) were offered to employees through its shifts and rotas tool—an increase of 31.2% compared to last year. Whether employees are in the office, at home, or working remotely, businesses are embracing tools that facilitate flexible work arrangements and ensure productivity and accountability.
- HR document libraries are helping businesses navigate regulatory change: Over the past year, SMEs in the UK have had to adapt to a whole host of employment law changes, from new rules around flexible working and minimum wage rises to new tax rules, leave entitlements, and redundancy protections. With the Employment Rights Bill currently progressing through Parliament, small businesses are set to face additional compliance challenges once this new package of ‘once-in-a-generation’ employment law reforms come into effect. Amidst these ups and downs, business owners are looking to expertly created HR documents to stay ahead of regulatory shifts and ensure compliance, with the report revealing that over 5.2 million pre-made HR and health & safety documents were downloaded globally in the last year, a 44.2% increase on the previous twelve months.
- Payroll integration is driving efficiency and supporting compliance: With statutory sick pay (SSP), minimum wage rates, redundancy pay, and holiday pay rules all changing in the past 12 months, and more changes on the horizon when new fiscal rules and employment laws come into effect next April, employers are increasingly demanding integrated payroll solutions that reduce the risk of manual error and ensure compliance. In response to this demand, BrightHR launched its enhanced payroll solution, BrightHR Payroll, in August this year, helping businesses bridge the gap between payroll and HR and protect their businesses by automatically adjusting for all the latest statutory requirements. With almost three quarters (72%) of UK businesses still using manual processes for their payroll systems, and 1 in 2 clients onboarded onto BrightHR Payroll since its launch arriving with inaccurate payroll runs, the need for efficient HR and payroll software integration has never been clearer.
- The future of employee recognition is digital: This year, employee experience (EX) and talent retention have emerged as top priorities for small businesses. In the UK, where recruitment costs are at an all-time high and set to rise further when employer national insurance contributions (NICs) increase from 13.8% to 15% in April 2025, employers are looking for strategies to cut hiring costs and retain top talent. According to Deloitte, companies that prioritise EX see a 25% increase in employee retention, demonstrating the benefits of employee recognition and holistic benefits packages for retaining top talent. The Leaders in Tech report indicates that small businesses are leveraging technology to improve EX and recognise employee contributions, with over 60,000 Praise points shared through BrightHR’s innovative Praise tool this year. As the UK faces rising recruitment costs and a competitive labour market, finding ways to attract and retain top talent will become even more critical in the coming year.
Alastair Brown, CTO at BrightHR, added: “As SMEs navigate increasing workloads and financial uncertainty, automating key HR functions is helping them manage operations, improve compliance, and control costs. At BrightHR, we’re proud to lead this charge, providing the tools businesses need to succeed and grow in the face of challenges.
“2024 has been a year of rapid transformation, from economic shifts to the growing adoption of AI, and BrightHR has been at the forefront of helping businesses adapt. We’ve launched over 24 major products this year, welcomed more than 20,000 new customers, and empowered businesses to stay ahead of regulatory changes and workforce demands.
“Our second Leaders in Tech report clearly shows that HR technology is no longer a luxury but a necessity for small businesses. By embracing innovations in employee recognition, smart scheduling, and e-learning, and using these tools to ensure compliance with regulatory requirements, SMEs can protect their businesses and ultimately position themselves up for long-term growth.
“Whether it’s managing flexible working through our Blip app, supporting staff compliance with HR and health & safety regulations through our Learning Management System, or helping businesses distribute 10 billion minutes of work through our scheduling tool, our commitment to innovation is clear. As we look to 2025, we’re ramping up investments in payroll, performance management, and new features like our NFC-enabled clock-in kiosks—continuing to deliver tools that help businesses thrive in a complex and evolving landscape.
“Our customers are at the heart of everything we do, and we’re proud to lead the HR tech space with solutions that are shaped by their needs. The future is bright, and it’s theirs for the taking.”
