Should you stay on spreadsheets or switch to HR software? The honest answer is: it depends on five specific factors. This framework gives you a numerical score that tells you which side of the line you sit on. No salesperson framing, no vendor agenda. Just the math behind the decision.

The framework draws on the experience of small companies that have made this switch. The break-even is rarely about headcount alone. It is about a combination of size, growth rate, compliance complexity, time cost of admin, and risk tolerance.

Question 1: How many employees, today and in 12 months?

Below 10 employees today and slow growth (under 5 hires per year) keeps spreadsheets viable. Above 15 today or growing fast (10+ hires in next 12 months) tips you toward software. The trigger is not the headcount itself, it is the rate of compounding admin work as you cross 25 employees.

Score: 0 if under 10 with slow growth, 1 if 10-20, 2 if 20+, 3 if growing fast.

Question 2: How much time does HR admin take you per week?

Track this honestly for one week. Count time spent on PTO requests, document chasing, onboarding paperwork, contract updates, manager questions about HR data. Score: 0 if under 2 hours, 1 if 2-4 hours, 2 if 4-8 hours, 3 if over 8 hours.

Above 6 hours/week, HR software typically pays back in saved time alone.

Question 3: What is your compliance complexity?

Single country, full-time only, no regulated industry: low. Multiple countries OR contractors mixed with employees OR healthcare/finance/government work: high. Score: 0 if simple, 1 if some complexity, 2 if multi-jurisdiction, 3 if regulated industry.

Question 4: How would you handle a GDPR Subject Access Request today?

If a former employee asks for all data you hold on them, can you produce it within 30 days? If your honest answer is 'eventually, with a lot of work,' you have GDPR exposure. Score: 0 if confident in 1 day, 1 if 2-3 days, 2 if a week, 3 if not sure.

Question 5: What is your risk tolerance for an HR mistake?

Mistakes here include misclassification (FLSA back pay), missed I-9, late W-2, lost contract, wrong PTO calculation. Score: 0 if you can absorb $10K errors easily, 1 if it would hurt, 2 if it would be material, 3 if it would be company-threatening.

Total score: what to do

0-3: Stay on spreadsheets. You don't have enough scale or risk to justify HR software yet. Re-run this in 6 months.

4-7: Borderline. Either start evaluating now (soft start) or invest in better spreadsheet processes.

8-12: Switch to HR software. The math is on your side.

13-15: You should have switched already. Prioritise this.

Spreadsheet vs HR software at common SMB sizes

Company size Spreadsheet viable? Recommended path
1-10 Yes Spreadsheet + payroll + Drive
10-20 Borderline Lightweight HRIS or strong spreadsheet discipline
20-30 Marginally Switch within 6 months
30-50 No HRIS like Treegarden, BambooHR, HiBob, Personio
50+ No, costly HRMS-grade platform

Frequently asked questions

What's the cheapest way to test HR software before committing?

Most platforms offer 14-30 day free trials (BambooHR, Zoho People, Sage HR). Treegarden offers a 30-minute hands-on demo instead of self-serve trial. All let you test the actual feature set before signing.

Can I phase the switch to reduce risk?

Yes. Most companies migrate in stages: start with employee directory + document storage, add leave management in month 2, add onboarding workflows in month 3. Keep spreadsheets parallel for a month, then archive.

Does my decision change if we're remote-first?

Yes. Remote-first companies hit the spreadsheet-breakdown threshold earlier (often at 12-15 employees) because in-person knowledge transfer is missing. Software-mediated processes become essential sooner.

How long does HR software implementation take?

1-7 days for SMB platforms (Treegarden, BambooHR, Sage HR). 2-6 weeks for mid-market (HiBob, Personio with custom config). Don't pick a platform that requires 3+ months unless you genuinely need enterprise complexity.

What if my team resists the change?

Common reasons: fear of surveillance, learning curve anxiety, attachment to existing process. Mitigate by being explicit about what data is collected and why, providing 1-hour training, and showing the immediate self-service benefits (PTO lookup, document access).

See Treegarden in 25 minutes

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Related on Treegarden

Sources

  1. SHRM Talent Acquisition Benchmarking (2025)
  2. GDPR Regulation (EU) 2016/679 (2018)

Next buyer step

Compare the pricing model against Treegarden

Use these pages to move from vendor research to a practical ATS or HR software shortlist.

HR module Treegarden HR module Use HR workflows when hiring data needs to become employee data. Small HR Best HR software for small business Compare HR software by records, leave, documents, performance, and ATS fit. HRIS Best HRIS for small business Shortlist HRIS tools while checking recruitment handoff. ATS first Recruitment software for small companies Decide whether the first system should be ATS or HR software. Pricing Treegarden pricing Keep ATS and HR modules separate instead of forcing a suite purchase.