Spreadsheets are free, flexible, and familiar. For a team of five or eight, they often work fine. But there is a point — usually somewhere around 15 to 25 employees — where they start to crack under the pressure of real HR work. Most businesses do not notice it until the damage is already done. What works at first At ten employees, you can track leave in one tab, employee details in another, and still keep a mental picture of everything. The person managing HR — often an office manager or founder — knows where everything is because they built it. It is not efficient, but it works. What starts to break at 20+ employees Version control becomes a problem. Multiple people editing the same spreadsheet means files diverge. Someone works from an old version. Data gets overwritten. Leave balances become unreliable, and no one is quite sure whose figures to trust. Calculations become manual and error-prone. Holiday entitlement for part-time workers. Bradford Factor scores. Statutory sick pay. These calculations are not complex in themselves, but doing them manually across twenty people means mistakes — and employment tribunal claims have started from less. Approvals happen outside the system. Leave requests come in by email, Slack, or in person. Someone enters them into the spreadsheet later — or forgets. The spreadsheet becomes a record of what people remembered to log, not what actually happened. Compliance gaps appear. Right-to-work document expiry dates. Training completion records. Performance review histories. When data is spread across multiple files, things fall through the gaps. You only find out when they become a problem. The person who built it leaves. The spreadsheet only made sense to the person who built it. When they leave, HR management starts again from scratch. When spreadsheets become a compliance risk Employment law applies from employee one. But compliance failures are easiest to miss when your records are manual and decentralised. Incorrect holiday entitlement calculations are one of the most common HR compliance issues in UK small businesses. It is not that businesses are trying to underpay — it is that the calculations are done manually, part-time workers are calculated wrong, or records simply are not kept. A proper HR system for small business calculates entitlements automatically, flags missing documents, and creates an auditable record of every approval. How to know you're ready to switch You probably already know. Some clear signals: Leave balances are regularly disputed You have more than two separate spreadsheets managing HR data A new starter's onboarding relies on someone remembering what to send them You have missed a document renewal or compliance deadline HR queries take more than a day to resolve If you're comparing platforms, these comparisons are worth reading: VeltoHR vs BreatheHR — both designed for UK SMEs, different pricing models VeltoHR vs BrightHR — BrightHR bundles HR advisory, VeltoHR focuses on platform capability VeltoHR vs BambooHR — BambooHR is US-based with USD pricing See all comparisons Final Thoughts Spreadsheets are not bad. They are just limited. They are a starting point — not a destination. If your team is approaching 20 people, the cost of staying on spreadsheets is already higher than the cost of switching — not just in money, but in time, risk, and daily friction.