How does ERP software benefit the Human Resources area?

ERP software - or enterprise resource planning system - is a platform that integrates different modules to manage the various areas of the company. One of these is related to personnel management, which is of great help to Human Resources departments.

In this sense, in addition to simplifying workflows, an ERP collects data from operations and centralizes it in a database that becomes the sole source of knowledge for decision making. As far as HR is concerned, the system provides us with a single source of knowledge for decision making. As far as HR is concerned, the system allows us to:
  • Make personnel records, with the respective job descriptions.
  • Manage documents, contracts and terminations.
  • Process payroll information.
  • Automate compensation calculations, always within the framework of labor legislation.
  • Connect -in a transparent and fast way- managers with their employees.
  • Enable a complete corporate "social network", in which workers obtain all the labor information they require.
The advantages of ERP software in Human Resources

Beyond the tasks related to personnel management in which this tool is useful, there are a series of benefits of implementing an ERP system that, mostly, are related to its modular nature and versatility:

1. Streamlines business processes in other areas

Human Resources data consolidated in the ERP database represents valuable business information for decision making and execution of processes in other areas of the company.

For example, information related to compensation is essential for payroll management and accounting reporting. In addition, by considering tax withholdings and other legal deductions applied to workers, it is possible to optimize tax planning.

Having this information updated in the central database allows the accounting area to execute its workflows in a more agile and accurate way.

2. Improves employee experience

A Gartner research revealed that only 35% of workers agree that the information they receive from the Human Resources department is relevant and timely, significantly affecting their experience and, therefore, their job satisfaction and commitment indexes.

This limitation can be solved through tools that improve the relationship between the company and its employees. Thanks to an ERP, companies can optimize the management of documents such as labor certificates, copies of contracts or payroll receipts; and simplify important procedures such as updating data, requesting vacations or submitting medical incapacities.

3. Optimize people management

Having visible and updated data on each employee allows HR managers - and the company in general - to plan actions to optimize people management according to specific needs.

For example, information on areas or processes in need of improvement allows us to program training plans to close skills gaps, or to design internal recruitment plans before looking for external talent.

4. Facilitates Human Resources department compliance

The data associated with people management provided by ERP software also simplifies compliance with the company's legal obligations (labor regulations, tax obligations, etc.), in addition to facilitating compliance with internal objectives, such as increasing the number of young professionals in certain areas or incorporating more women in management positions.

These are the main benefits of implementing an ERP system with HR functions. However, to increase the advantages derived from this tool, it is necessary to choose a supplier with extensive experience in the market, capable of becoming a true strategic ally, going beyond providing the tool itself.

At Defontana we understand this. Therefore, in addition to developing an ERP that adapts to the needs of each company, we advise organizations so that they can fully exploit the power of this powerful business management tool.