Small Businesses And Professional Services Slow To Digitise HR – But The Opportunity Is Clear

New research from Smartly shows the sectors least likely to adopt digital HR tools, and how bringing payroll and people data together could change the game.

The digital divide is widening – and two groups are struggling to keep pace.

Smartly’s State of HR in New Zealand report reveals that:

• Small businesses (1–5 FTE) are the least likely to adopt digital HR solutions
• Professional services firms lag behind other sectors in using tech for HR and payroll

Why? In many cases, it comes down to perception: that HR tech is “too big,” too complex, or too expensive for smaller operations. But that assumption may be costing them – in time, compliance risk, and employee experience.

“These are businesses where a team of two or three people are trying to wear every hat – and still manually manage contracts, visas, and leave,” says Sarah Garvin, Associate Director of Sales and Marketing at Smartly.

“Digital tools don’t just save time – they prevent issues that small teams don’t always have the bandwidth to catch. When payroll and people data live in different places, errors and rework quickly pile up. That’s why having everything together in one system built for Kiwi SMEs can make such a difference.”

As Aotearoa faces a tightening compliance landscape and growing employee expectations, Smartly says the opportunity for small businesses and professional services is clear: modern HR support is no longer just for the big players. Accessible, all-in-one solutions now exist that make compliance simpler, reduce admin, and free teams to focus on their people.

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