As a company’s workforce grows, human resource (HR) management tends to become a much more complicated task. In such cases, manually computing each employee’s compensation or going through cabinets full of paperwork just to find a specific employee’s records can prove to be inefficient and time-consuming. Thus, to greatly enhance their HR department’s efficiency and productivity, businesses are now adopting enterprise resource planning (ERP) systems in their operations.
ERP systems allow businesses to manage and automate core processes across different departments in one centralized platform. This makes it much easier to share data among departments, improving overall operational efficiency, accuracy, and decision-making. For HR teams in particular, ERP systems help staff accomplish various tasks that will otherwise take more time and resources to do so manually.
To better understand how ERP systems drastically improve HR operations, here are some of its HR-specific features.
1. Centralized Employee Information Hub
ERP systems store all HR-related information in one unified database, eliminating the need for tons of paperwork, multiple spreadsheets, or separate systems. This also makes locating employee records easier, prevents data duplication, and eliminates instances where an employee’s data doesn’t match with what was in another system. With all HR data compiled in a centralized location, HR professionals can easily retrieve the data that they need to make informed decisions and maintain compliance with labor laws.
2. Automated Payroll Management
Managing payroll manually can be time-consuming and prone to human errors. By using an ERP system to automate the payroll process, computing for wages as well as corresponding overtime and deductions can be done in less time without sacrificing accuracy. The system can also generate and distribute electronic payslips that employees can save on their devices instead of paper payslips that may end up getting misplaced or destroyed over time. Moreover, ERP systems allow bank integration for direct payroll disbursement and ensure that employees are paid accurately and on time.
3. Seamless Recruitment and Onboarding
To streamline hiring and onboarding processes, many ERP systems come with applicant tracking and recruitment management features. For example, the system can be tasked to collect and filter resumes based on predefined criteria as well as track applicants through different recruitment stages.
Then, once the applicant is hired, the ERP system can automate onboarding and allow the new hire to receive any necessary documents such as contracts and company policies while adding their details to the HR department’s database. With this, HR teams can reduce paperwork and shorten hiring time while also making sure that new employees are properly welcomed into the company.
4. Attendance and Leave Management
Tracking attendance manually can lead to errors and may even cause disputes between the employee and management. ERP systems prevent such issues by having employees log in through a biometric or RFID system, counting their hours automatically. Employees can also request for a leave of absence digitally, which HR can approve within seconds. By automating attendance and leave management, HR departments can efficiently manage work schedules and ensure accurate payroll calculations.
5. Performance Management and Appraisals
Tracking employee performance for evaluations and appraisals can also be made easy through ERP systems. HR can simply log in specific key performance indicators (KPIs) that the system can keep track of as well as set goals for employees or teams. As such, when the appraisal period comes, retrieving all the relevant data can be done in just a few clicks. This also allows HR to identify high performers and spot those who may need additional training.
6. Training and Development Tracking
Employee training is crucial for skill enhancement and increased productivity. HR can ensure that all employees are receiving the training they need by programming their ERP system to identify skill gaps based on performance reviews and assign relevant training programs to employees accordingly. After training, ERP systems can also generate certificates for the employees and reports on training effectiveness for managers.
7. Employee Self-Service Portal
Modern ERP systems come with self-service portals that let employees access their payslips, update their personal information, apply for leaves, and view company announcements. Having an employee service portal significantly reduces the workload of HR as employees can handle minor tasks on their own, leading to increased efficiency and employee satisfaction.
8. Compliance and Regulatory Management
Companies are expected to comply with labor laws, tax regulations, and industry standards or else they risk paying penalties or even facing legal action. ERP systems assist HR departments in compliance and regulations management by automatically updating tax rules and labor law requirements, tracking employee contracts and expiration dates, and ensuring proper documentation for audits. Through this, ERP systems can help reduce legal risks and ensure the company follows all necessary regulations.
9. Data Analytics and Reporting
Given the constant stream of data that ERP systems handle, they’re also a treasure trove of information that HR departments can use to make informed decisions. For example, by retrieving workforce analytics, HR can track employee performance, turnover rates, and payroll expenses, which in turn can influence salary appraisals or employee engagement strategies. ERP systems are also equipped with predictive analytics to help HR anticipate workforce needs and succession planning, therefore optimizing hiring and enhancing workforce productivity.
ERP systems revolutionize HR management and improve operational efficiency by automating routine tasks, reducing errors, and enhancing decision-making. With the help of the features listed above, HR teams can focus on strategic initiatives instead of being tied to administrative and repetitive tasks.
