What is an HR ERP system?

Before considering the human resources (HR) aspect, it’s crucial to define enterprise resource planning (ERP). This broad term refers to the high-level oversight of a business’s complex daily operations, like inventory management and accounting.

ERP systems, therefore, are massively powerful software titles that administer all of these individual business elements in a single software package. This allows various departments, like sales, customer service, and supply chain managers, to harmoniously coexist and tap into each other’s data via the same digital platform.

With this in mind, an HR ERP system refers specifically to the personnel management portion of these complex tools.

Let’s find out if such platforms are ideal for your business.

Ideally, an HR ERP title solves nearly every day-to-day task and pain point of a human resource professional while providing long-term planning features, like detailed analytics.

Namely, a worthwhile software contender should incorporate:

• Payroll
• Benefits management
• Encrypted personnel recordkeeping
• Recruitment, onboarding, and departures
• Long-term planning via detailed analytical features and sophisticated workforce forecasting
• Data-sharing with other business departments and third-party software integrations

If an HR ERP solution leaves you needing more software, run for the hills. After all, an ERP is the promised land when it comes to business software. There should be minimal need to buy more once you’ve forked over cold hard cash to enter this advanced realm.

Simply put, businesses use human resources (HR) enterprise resource planning (ERP) software to thoroughly manage personnel administration while also seamlessly integrating into a business’s broader daily operations. By housing HR alongside other departments under one digital roof, organizations save money by eliminating the need to purchase more software.

This holistic interconnectivity produces more than just cost savings, though. An ERP system establishes the foundation for easily sharing data between departments since every team depends on the same software package. This, in turn, boosts productivity and eliminates inefficiencies that sprout up when the left hand doesn’t know the right hand’s movements.

If you’re considering using an ERP title to manage human resource tasks, expect to pay a premium for top-notch analytics and one-stop shop convenience.

For example, Microsoft Dynamics 365 starts at a whopping $50 a month per user just for its customer service tool, while rapidly soaring into the thousands of dollars for more built-out plans.

Such advanced software could help pay for itself by unearthing inefficiencies that, when fixed, produce cost savings. However, this is only likely to happen if your business is large enough to have many moving parts needing optimization.

You’ll also need to consider the inherent learning curve of these enterprise goliaths. Further complicating matters, many software titles dish out heavily text-based training that can be a nightmare for visual learners.

In fact, an ERP’s complexity can be so advanced that full-length certification courses exist for some platforms to formalize required knowledge.

Since many vendors (like Microsoft) charge a pretty penny for training, an ERP implementation is likely to be out of the question for many budget-conscious entities.

Using an ERP for human resource management is a brilliant idea if your business is complex, employs dozens of employees, and has a decent budget. Indeed, the harmonious interdepartmental data sharing unique to an ERP is likely to empower human resource professionals to make smarter high-level decisions.

However, most smaller businesses don’t need the complexity of an ERP. Instead, a standalone human resource platform would be a better option for budget-conscious entities.

Want to learn the basics of HR platforms in general? Check out our quick rundown on human resource software.

• What Is HRIS?
• 10 Best Human Resource Software for Small Business
• The Ultimate Guide to Payroll

Disclaimer

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