Benefits and Role of ERP in HR Management

ERP in HR management is a crucial business function for any enterprise as it directly impacts workforce performance and productivity.

It is, therefore, essential to implement an HRMS module in ERPNext software to manage routine HRM operations and automate repetitive tasks efficiently. 

ERPNext is an open-source platform that lets you build custom software applications for mission-critical business functions including HRM. Also, developers can use the ERPNext source code to create custom enterprise solutions from scratch to address varying HRM needs. 

ERPNext offers a fully customizable module for HRMS with all requisite features including recruitment, onboarding, applicant tracking, attendance management, payroll management, and more.

Developers can use the HRMS module in ERPNext source code to customize it as per the project requirements. In doing so, you only need to bear the development cost without paying the additional software license fee. 

As a result, it significantly reduces the overall project cost and accelerates the software development life cycle (SDLC). 

Let us explore the key features and benefits of ERPNext software development for HRMS.

Time and attendance management is a crucial part of the HRM strategy and must be handled systematically. 

Implementing the ERPNext HRM module enables enterprises to track their employees’ work hours, punch-in/punch-out timing, biometric data, billable hours, and more.

1. ERPNext includes multiple options for capturing real-time attendance, including biometric hardware integration.

2. Sometimes an employee’s salary is based on the number of hours they worked for on a specific project. If these hours are tracked via time sheets, the HRM module by ERPNext automatically feeds the time and attendance data to the payroll software for effective payroll processing.

3. The attendance module aids in managing leave applications, work-from-home requests, paid time offs, compensatory offs, etc. ERPNext allows you to easily generate salary slips based on total present days, leave without pay, half days, and so on.

4. ERPnext can also be used to customize and monitor employees’ shift patterns and break and lunchtime.

It can specify shift patterns for teams or individually. Official or personal ins and outs of employees are approved or rejected.

HRMS module in ERPNext flawlessly integrates attendance tracking with payroll and leave management. The attendance module within ERPNext provides insightful timesheets to analyze employees’ productivity and aids in performance evaluation.

ERPnext allows you to customize leave types for employees or departmental units based on their eligibility criteria.

ERPNext permits workers to position their requests for leaves (paid holidays, sick leave, and so on) for managers to approve and validate.

Employees can apply for leave with a centralized summary that includes the date, type of leave (medical leave, Loss of pay, casual leave), and reason for leave.

Admin or HR has the authority to approve or reject leave applications.

ERP in HR management can help manage the Holiday list (which contains the dates of all holidays that the company follows) and a leave block list (consolidates all the dates in a year on which employees cannot apply for leave).

Use ERPnext to request Compensatory Leaves and Additional Leaves based on your company’s policies. 

Everything will show up in the leave calendar and centralized leave summary ledgers, which give a transparent view of all employee leave information.

1) Define the period for payroll processing (a financial year or monthly) and set tax salary slabs for employees in the HRMS module in ERPNext. You can also add multiple tax slabs for a payroll period depending on your country’s tax regulations.

ERPnext allows you to configure multiple pay structures for specific employees or groups.

2) ERPnext generates automated payroll by evaluating attendance records, project bonuses, advances, hikes, etc.

3) The HRMS module in ERPNext uses timesheet data including billable/non-billable hours of employees, salary structure, incentives, etc. to automatically process wages and salaries. Salary payslip is thus generated monthly.

4) ERPnext automatically generates salary slips and shares them with the respective employees. Employees can view and download payslips via ERPNext. 

5) Be it for an exceptional performance bonus or deputation allowance/arrears, you may need to make ad-hoc adjustments to your salary structures. That’s why the Additional Salary feature in ERPnext, lets you add or deduct salary for a particular employee while processing payroll.

6) When it’s payment time, book the salary payments in your accounts via ERPnext.

ERPnext also updates the account data. The payroll software is directly integrated with the accounting module to avoid any possible discrepancies in day-to-day financial management processes. 

7) With ERPNext’s easy customization capabilities, you can personalize payslips with your brand identity.

8) Once per payroll period, employees can create applications for their flexible benefits within the ERP using employee benefits applications. This makes the process easy for both the employee and HR. They can view the available benefits based on their assigned salary structure before creating an application.

The HRM module by ERPNext greatly simplifies the recruitment process by eliminating operational complexities and automating repetitive tasks. 

1) ERP in HR management helps you create staffing plans, which help you plan manpower requirements for your company. You can enter budgeting, vacancies, estimated cost per position, number of positions, etc. while creating a staffing plan.

With linked data between staffing plans and job openings, ERPnext makes sure that you don’t exceed your HR budget.

2) ERPnext helps to effortlessly post job openings on all relevant job portals. Reviewing applications and filtering out eligible candidates is automated. 

3) It can help schedule interviews &/or aid in providing a frictionless interview process with multiple rounds of assessment

3) It can customize email, review, and documents for applicants.

4) Details about the applicant’s selection rounds and results can be listed with ERPnext 

5) It facilitates seamless onboarding with additional support for employee training programs.

ERP in HR management helps companies maintain digital records of their employees’ data with all relevant information which they can instantly retrieve when required. 

1) The HRMS module in ERPnext helps to keep a record of all company employees, their qualification details, and prior work experience. While storing employee data in an ERP, you can include personal details, demographics, joining and leave details, type of employment (e.g., intern, contractor, full-time, part-time, probation, etc.), department, designation, branch, etc.

2) It also stores up-to-date information about an employee’s billable hours, project allocation details, work shift summary, employee’s salary payment, leave policy, and other parameters.  

3) With ERPnext you can link employees’ external documents, and manage and track data for a long-term purpose.

4) With ERPNext, you can easily upload, browse, and share images, videos, and documents or use a web link.

5) Manage employee type, branch, department, grade, group, & health insurance details

6) Monitor employee lifecycle, shift type, and control leave policy

7) Upon an employee’s departure from the company, exit details such as their resignation, exit interview, and leave encashment can also be documented.

1) Built-in performance metrics in ERPnext are used to track employees’ performance in completing a target task or project.

ERPnext can also help set key result areas (KRAs) based on the goals which can help create employee appraisals.

2) Operational performances are measured with triggers adding points to the team or building in appraisal.

With ERP in HR management, you create employee skill maps, these are records that help your organization track and evaluate the employee’s skill sets and training. This data can be used while making appraisals as well.

Skill Mapping

3) Salary hikes and bonuses for top-performing candidates are processed by analyzing these metrics.

4) Employee Promotion or Employee Transfer document can be created as required.

1) With ERPnext’s HR training program, the employee can upgrade their technical and environmental skills.

2) Coaching requests can be maintained, and programs can be scheduled and tracked with notifications.

3) Training events or occasions are linked with calendars and to-do lists so everyone can view scheduled training & plan accordingly.

4) Feedback or survey from employees is carried out and outcomes are tracked for improvements.

Training Feedback

When the time comes for the employee to leave your organization, there are a few things HR needs to get done.

ERP in HR management helps to manage the exit means of workers with full monitoring of all processes in real-time.

It creates a set of tasks that need to be completed for the separation process. You can create an employee separation document. 

Collecting company property, clearing dues, collecting any identity card, disabling access to systems, deleting the email account, and other related tasks can be listed there.

ERP in HR Management is made easy. Go for it!!