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170-200 people is no longer a small business ;)
From 25/30+ people, companies usually have an in-house HR department. I used to work for one - in my previous life - and for a 120 people brick and mortar company we were 3.5 in HR (the HR manager, 2 salary/tax employees/technicians and me, part-time student).
The HR stuff is usually run on intranets not internet... What functionalities would you need the app to do?
For now, we are looking for following.
1. Web based profiles for each employee (Photo, ID images, letters issued, dates(joined date, etc.)
2. We DON't need it do any expense related work. We do that on the accounts application.
Maybe a myspace account will do all this. lol
I am suprised that we can't find somthing simple like this out there for HR.
You might be able to use forum or basic CRM software to handle this if you're not looking for high levels of automation.
Might also be better to take a look at places like rentacoder / elance to see if someone has impleted something that meets your requirements.