An ERP is Not a Human Resource Management Solution

Written by Jonathan Wiersma

If your municipality is attempting to leverage an enterprise resource planning (ERP) software for your human resource (HR) department needs, we know you’re frustrated.

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At its core, ERP software is intended as a financial system to track revenue, expenditures, and goods. With personnel being part of a businesses revenue equation, some private and public sector entities are attempting to use an ERP instead of a fully integrated human resource management system (HRMS) solution. However, any HR manager knows that to hire and retain talent effectively, you need a people-based solution, not access to financial software. Too often ERP systems are foisted upon HR departments with the belief that the integrated HR modules will serve their needs. Instead, the result is the requirement to rely on a financial software system that creates disjointed employee data and leaves HR teams unable to identify, hire, and retain top talent.

What is ERP Software?

Enterprise resource planning (ERP) software is designed primarily for large businesses to integrate and coordinate departmental data and workflows. It is designed to monitor and manage business resources such as cash, personnel, overhead, payroll, purchase order, and customer orders. To serve so many departments and processes, most ERP software products are modular, meaning that employees only have access to those functions that pertain to their job role. Modular systems also require businesses to pay for the addition of each modular component—leading ERP systems to be costly and challenging to implement, often resulting in total implementation failure. Also, For HR departments of one, which is often the case in small municipalities, attempting to manage any data stored within an ERP system becomes a time-consuming nightmare.

Too often ERP systems are foisted upon HR departments with the belief that the integrated HR modules will serve their needs.

ERP Software Human Resource Functionality

While ERP systems can accommodate some human resource data elements, mainly personnel records, job descriptions, and payroll, they are not designed to identify talent, screen applications for qualifying keywords, communicate seamlessly with departments or candidates, onboard, or retain top talent. Instead, ERP systems that offer human resource management solution modules may only provide any of the following personnel-related functionality:

  • Timesheet management
  • Job description database
  • Payroll

Even those systems that include a training or performance review component are designed as task-based systems to automate human resource procedures—not as growth-minded solutions aimed and developing and retaining talent.

If your finance department insists that your human resources department utilizes an HRMS module within their ERP, be prepared for some additional limitations. ERP systems are traditionally not designed with intuitive interfaces, and most ERP providers do not offer custom, one-on-one training. Also, know that if you need any assistance or customizations, they will be costly, and you likely will not have a dedicated point of contact at the ERP company you can turn to for help. You will need to funnel all requests through your finance department, which will increase the time it will take to obtain any resolutions.

What is an HRMS?

Unlike ERP software that is designed for, and intended to be used by, finance departments, a Human Resource Management System (HRMS) is designed exclusively for human resource departments as a tool to recruit, hire, and retain top talent. Think of an HRMS as a bridge between the people management functions of human resource management and the technology needed to streamline operations. As anyone in HR knows, there are recruitment, hiring, onboarding, and retention processes that require repetitive actions and documentation management. An HRMS solution makes these processes effortless so HR team members can focus on the people-management aspect of their role, rather than dedicate too much time managing paperwork and procedures.

Why Choose an HRMS

Local governments are not private sector businesses, and they face unique challenges in hiring and retaining talent. The needs of local government make ERP systems with integrated human resource management software modules ineffective at identifying qualifying candidates and enabling HR and department managers to give the ongoing oversight and support needed to ensure job satisfaction and retention. A valuable HRMS solution integrates the three core components of hiring and retention: applicant tracking software, onboarding, and performance management.

Unlike in ERP systems where data is shared but functionality still treats each component as a stand-alone, task-based, HR function, a quality HRMS solution will allow HR managers, department managers, and employees to navigate the hiring, onboarding, and performance management process seamlessly. HRMS solutions also include time-saving functionality that ERP systems typically lack, such as:

  • The ability to send automated communications to job applicants based on their status.
  • The ability to route documents electronically to hiring managers and send automated response reminders.
  • Integration with job ads, social media, and other recruitment efforts.
  • The ability to build custom applicant measurement criteria.
  • Customizable job sourcing reporting.
  • The ability to track applicant interview schedules.
  • Automatically identifying qualified applicants using predefined keywords.
  • Enabling continuous performance management for better employee satisfaction and performance outcomes.
  • Enabling the setup of custom onboarding workflows.
  • The integration of new hire onboarding surveys.

Also, only an HRMS solution designed specifically for local governments will enable HR departments to meet the compliance requirements of public entities and meet record retention requirements.

What if Your Finance Department Purchases an ERP?

Just because your finance department invests in an ERP does not mean your human resources department should be forced to try to use any included, limited personnel functionality in place of a true talent acquisition solution. Help your finance department to understand that your human resources department needs autonomy over the tools it uses for hiring, onboarding, performance management, and retention. In most cases, for an ERP system to offer any value, it will need to be customized for your municipality—a cost that typically is far greater than what you would invest in a standalone human resource management solution.

To save taxpayer dollars, and ensure your municipality is hiring and retaining the best talent, you will need the ability to identify and implement your own talent acquisition and retention solution, regardless of the software your finance department uses to run payroll reports. Help your community’s financial leaders understand that the people who work to move your community forward, should not be treated as an afterthought and that they deserve better than being managed through an add-on finance software module.

Conclusion

If you are ready to invest in a human resource management solution that is designed for local governments to identify, hire, and retain the best talent on the market, sign up for a demonstration of CivicHR®. CivicHR is the easiest-to-use local government human resource management solution. CivicHR offers a flexible, comprehensive, and integrated cloud-based solution that allows human resource managers to recruit, identify, and hire talent, onboard new employees, and assess employee performance, as they move from job seeker to new hire, to employee. It streamlines the hiring process, improves engagement, and manages employee data in a centralized, secure system.

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