ERP For HR: Key Features, Benefits, & How It Compares To Other HRM Systems

An ERP HR module offers benefits that are comparable to that of a Human Resource Management System (HRMS), such as streamlined payroll, payments, onboarding, recruitment, and more.

However, ERP for HR aims to meet different business goals from HRMS. Explore what specific features the HR module in ERP provides and how it’s compared to other HRM systems.


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What Is An ERP For HR?

1. About ERP’s HRM modules

An Enterprise Resource Planning (ERP) system runs as the backbone of an organisation. The system consists of a set of modules (or applications) that represent critical business activities such as inventory, purchasing, finance, sales, and human resources.

Learn more: Explaining ERP’s Key Modules In Details.

Think of a large workspace where multiple departments, including HRM, work across isolated documents. The ERP stores all of those documents, integrates them into one location, and digitises them. For HRM, it provides a centralised database that collects employee data such as contact details, skill sets, salary history, and performance evaluations. The results are seamless data sharing and no more isolated data silos.

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Key features of ERP HR modules

2. How can ERP HR handle key HR challenges?

Whether replacing an outdated system or eliminating manual processes, an ERP for HR offers robust features to support HRM and solve key challenges such as:

  • Struggling to attract top talent & lengthy onboarding: An ERP shortens time-to-hire and reduces paperwork with centralised candidate pools, automated onboarding procedures and recruitment operations.
  • Inconsistent & subjective performance management: ERP for HR enables the development of standardised goal-setting, online feedback systems, and performance evaluations. This results in a more critical, transparent, and consistent performance management process.
  • Manual data entry errors: An ERP automates manual data entry, enabling HR staff to have more time to focus on more strategic activities and avoid human errors. 
  • Low employee morale & high turnover rates: With an ERP, employees can access their self-service portals 24/7 to request leave, view their paystubs, and update personal information. This promotes a greater sense of control and autonomy.
  • Uncritical HR decisions: Using an ERP, HR managers can make better decisions using real-time HR data analytics. It offers insightful information about employment trends, staff engagement, and talent retention.
  • Unexpected labour requirements & budgetary limitations: Future talent requirements can be predicted by ERP's predictive analytics systems using data on skills gaps, retirement trends, and growth forecasts. This way, HR executives can perform better workforce planning and budget allocation.

Differences Between Manual HR, ERP HR Modules, & HRMS

Selecting an appropriate HRM system is based on the size and requirements of your company. The following summary can assist you in recognising the major differences between HRMS (Human Resource Management System), ERP's HR modules, and manual HR practices:

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Manual HRM vs ERP HR Modules vs HRMS

Below is a quick overview of each approach:

  • Manual HR: This is the simplest method which uses spreadsheets & paper-based documents. Although it works well for very small firms, as the company grows, it gets labour-intensive, prone to errors, and not highly adaptable.
  • ERP HR Modules: These modules are created especially for HR procedures, while the ERP itself provides a centralised platform for managing a range of company activities. If you need to connect HR with other divisions like finance or accounting, this is the best solution. However, the HR features might not be as specialised as HRMS' and require further development.
Read more: A 3-Stage Roadmap To Select The Right ERP Vendor.

HRMS: This is a specialised HR management system for handling all aspects of the employee lifecycle. It provides strong tools for talent, performance, onboarding, and recruitment management. The system is excellent at HR-specific operations but usually falls short of ERPs in terms of integration possibilities.

7 Key Features of ERP HR Modules

ERP systems are built with a variety of HRM features, based on their vendors' product development goals. However, they all aim at streamlining every stage of human resource management. This leads us to look at 7 of the most important components of an ERP:

Payroll Processing

  • Automated payroll processing and calculations based on pre-defined pay structures, overtime rules, and tax deductions
  • Integrated time and attendance systems based on actual work hours.
  • Global payroll management for the global workforce with multiple currencies and international tax compliance (if applicable).
  • Self-service portals for employees to access paystubs, tax documents, or update information.

Time & Attendance Management

  • Flexible time tracking options via mobile app or computer
  • Automated workflows for leave request management.
  • Integrated time-tracking data in project management for cost control.
  • Customisable workflows to automatically calculate overtime pay and ensure law compliance.

Payments & Benefits Administration

  • Customisable workflows for automated deductions for various types of benefits like health insurance and retirement plans
  • Flexible payment options such as paychecks or direct deposit.
  • Up-to-date regulations compliance management.

Onboarding & Development

  • Automated onboarding duties such as emails, data collection, and training schedules
  • Integrated Learning Management System (LMS).
  • Integrated onboarding and training tools for performance management.

Recruitment & Selection

  • Integrated Applicant Tracking System (ATS) for job posting, profile screening, and interview scheduling
  • A centralised database for managing talent pools.
  • Integrated career channel/page for better candidate experience (if applicable).

Performance & Appraisals Management

  • Standardised performance review templates/workflows
  • Accessible insights into employee performance trends

Reporting & Integration

  • Customisable reports and dashboards with real-time HR metrics.
  • Seamless integration with other business functions like accounting and finance.
Read more: 5 Cost-Effective ERPs For Small Companies.

ERP For HR, HRMS, or Custom Integration? Let Us Help Make A Decision

ERP HR modules prove themselves as a potential solution for centralising employees' data and optimising HRM procedures. However, factors that determine which system is best for you are your organization's size, requirements, and financial constraints.

We can assist you in analysing your unique workflows and provide the perfect ERP solution for your company. Our team of professionals offers tailored ERP solutions that, over time, empower your workers and optimise your HR procedures, regardless of the scope of your business.

ERP For HR - Frequently Asked Questions

1. Can ERP handle HR functions?

Yes, this is where ERP systems showcase their strengths. ERPs are particularly good for collecting and organising data from multiple HR-related duties, including hiring, performance reviews, payroll, and benefits management.

2. What is the ERP HR module?

The ERP HR modules are packed with robust features to manage every aspect of human resource management. These can include payroll, attendance, onboarding, and many other crucial tasks. They enable businesses to switch from manual to automated and organised HR procedures.

3. What is the difference between HRMS and ERP?

In a nutshell, Human Resource Management Systems (HRMS) are specialised for HRM-specific tasks, whereas ERPs focus on integrating organisation-wide processes, including HRM.

4. Is payroll part of the ERP system?

Yes! All core HR functionalities can be found in ERPs. They typically handle payroll, staff records administration, performance management, recruiting, and more.

Want to learn how Havi can help you implement the ERP Software?

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