Savvy SMME owners are transforming HR processes by embracing the latest ERP technology tools and trends and unearthing a world of benefits for HR in the process.

“That’s because the growing importance of technology and digitalisation has changed the nature of competition,” says Heinrich de Leeuw, Managing Director, SEIDOR in South Africa.“This has made it clear that competitive advantage depends on innovation to leverage human resources more efficiently and effectively. In this environment, SMMEs that transform their human resource capabilities and functions in that direction are set to outpace the competition,” he says.

HR digitalisation has the power to revolutionise HR functions and processes such as recruitment, employee management, payroll, and training. By automating repetitive tasks and, most importantly, yielding analytics that enable companies to make data-driven decisions, it can significantly boost business performance.

Digitalisation improves efficiency, reduces errors, and saves time and costs for HR departments. For example, HR management software can automate tasks such as payroll processing, performance evaluations, and benefit enrolment. Recruitment platforms can use artificial intelligence to screen resumes and identify top candidates. Together, these benefits improve the HR experience for both employees and HR professionals, enabling everyone in the SMME to focus on more strategic and engaging activities.

According to HR consultancy McLean & Company’s 2023 HR Trends Report, organisations across the globe are experiencing “significant lags” in their adoption of cutting-edge digitisation for HR functions. With digitalisation in place, organisations can begin to create new value chains and experiences that are collaborative, interactive, sustainable, and profitable.

Here are six ways that HR digitalisation with ERP provides competitive advantages for SMMEs:

1. Streamlining HR processes: HR digitalisation and automation can simplify and automate time-consuming HR processes such as hiring and onboarding, payroll, benefits administration, and performance reviews. This not only saves time and money, but also reduces the risk of costly errors and compliance issues. Digitising these processes makes HR more efficient and reduces administrative burdens on HR staff, freeing up time and resources for HR teams to focus on strategic initiatives rather than mundane tasks.

2. Improved employee engagement: HR digitalisation enhances employee engagement by giving employees access to tools and resources that allow them to better manage their work-life balance, view their performance metrics, and provide real-time feedback to their managers. Ensuring that employees have a more positive and engaging experience helps to improve retention and attract top talent. Millennials and generation Z in particular are a demanding generation of workers who are glued to their screens. Companies that use these digital technologies in combination with social media platforms for HR purposes – have a significant competitive advantage when it comes to attracting these workers.

3. Better data analytics: Digitalisation provides SMMEs with real-time, accurate data analytics that can be used to make better-informed decisions about hiring, performance management, and employee engagement. For example, it can help a business to identify the areas where it is seeing the highest employee turnover and develop strategies to address this issue. SMMEs make better-informed decisions about hiring, performance management, and employee engagement.

4. Integration & Automation: Seamless integration to operational and control systems such as biometrics as well as time-an-attendance enables automated performance management and assists in efficiency in payroll.

5. Cost savings: HR digitalisation significantly reduces administrative costs associated with HR processes, such as printing and mailing employee documents, and can also help reduce errors and compliance issues that can be costly for SMMEs.

6. Improved collaboration and communication: Digital HR platforms facilitate better communication and collaboration among employees, making it easier for them to work together, share information, and collaborate more effectively.

“In an increasingly volatile, uncertain, and complex environment, HR’s role and scope has become larger, more important, and more challenging than ever, as have the demands on HR staff,” says de Leeuw.Now is the time for SMMEs to focus on taking a proactive, long-term, and innovative approach. The digital transformation of HR will ensure greater business resilience as a result of flexible and more agile ways of working.

Even small companies need to operate on an increased efficiency level and eliminate work silos. With superb scalability, SAP Business One ERP grows with a business, providing a platform that unifies and automates processes across various functions, including HR. It enables the business to access data that will drive growth, as well as the functionality to improve employee engagement and drive customer satisfaction.