Role of ERP in HRM and Why it is Important

Enterprise Resource Planning Software was initially built for planning and scheduling materials. But today, the ERP has surpassed its initial objective and has turned themselves to be the most complex and largest enterprise framework offering enhanced business management and business development.

Today the ERP comes with the capacity to manage human assets of the organization. The role of ERP in human resource management is much greater than the imagination of human minds. Like the way an ERP integrates several business departments together, an ERP in HRM integrates together with the several functions coming under the employee management.

There are four beneficial assets for a business-  Land, Labor, Capital and Enterprise to produce or sell products and offer services.  All the while accomplishing business errands, the focus must be given to the employees or the people who work on it. Human Resources Management or Human Asset Management thus revolves around the activities framed to recruit best candidates suitable for the respective job position and consistently improve their skills and abilities via providing them good and proper support called Human Resource Management (HRM). An ERP thus for HRM comes pivotal and indispensable if your company size is large.

One of the prime benefits of ERP in HRM is the centralized database. A unified database helps the management to elicit the information at its earlier without any chaos. An HR system software in workplace helps the business organization to retrieve every employee data such as his name and employee code, employee attendance, leaves, work history, performance review, different employee benefits that are accrued from the database itself. It thus helps the management to take timely decisions and assure everything is streamlined and organized.

The second and most advantageous benefit that an ERP offers is talent acquisition. Implementation of ERP for HRMS training module assures that the right and skilled individuals are hired for specified job positions. ERP helps in specifying the skills needed for specific job descriptions, monitoring the employee onboarding training, recording employee performances and much. In short, an ERP in the workplace helps in managing the skills and training of the employees in the most significant manner. Read more about types of HRIS Systems

The five gears of HRM system are:

1. Recruitment and Selection

2. Training and Development

3. Performance Feedback

4. Payments and Benefits

5. Labor


Thirdly an ERP for human resource management helps with collecting the performance feedback of the employees. This data retrieval is the pivot for a business, as it stages how far the company is progressing in terms of work. Features like Timesheet, Employee Appraisal helps in formulating the right set of information on employee’s commitment and sincerity. Also helps the management to timely address the issue in case of complexity and delay. Altogether the ERP functions as a catalyst boosting the internal communication and establishing the sense of trust between parties.

Payments and Benefits. Employee payroll management is one function that eats every organization’s head. No matter, how little and large your employee size is, precisely calculating the employee pay and other benefits like health, insurance, loans, etc. demand utmost patience and time. Any human prone mistake will lead to serious complications like employee dissatisfaction, company retention, stakeholder withdraw and many more. With an ERP in place, payroll management will become seamless and hassle-free. The automated HR management will rule out the possibilities of every manual prone error. With no data redundancy or duplication, the business organization can efficiently manage employee payments and other benefits.

With ERP framework’s digitalization, labor is significantly saved in the business place. Earlier where 5 employees were needed to perform a function, with HR system software, it lessens to one. Also, the time for performing a function is reduced like anything, giving the business a platform for more strategic business planning. With the utilization of human resource management tool, the business can materialize many virtues as it gets employees with more time and energy. In nutshell, a more productive employee community can be brewed with the help of ERP in HRM. Have a look at the following blog to explore more about importance of human resource management. Importance of Human Resource Management