Human capital management (HCM)
What is HCM (human capital management)?
The people working at your company are more than just employees; they represent an investment in your organization’s future prosperity. Like any valuable resource, they require funding, backing, and support. This is where human capital management (HCM) comes to the fore.
What is HCM?
At its core HCM covers the most essential functions of any HR department including recruitment and training, performance management, payments, budgets, etc. More than just managing these critical factors however, HCM is focused on how to develop and optimize them to create a more engaging and productive working environment for your staff members.
The concept of HCM acts as an umbrella, covering a number of disparate yet related factors to optimize them all under one system. By using an HCM system you ensure that your HR department is optimized to the greatest degree possible, which will help your overall organization improve its effectiveness considerably.
What are the key factors of HCM?
Now that we’ve covered the definition of human capital management we can explore its key factors. The most important to bear in mind are;
- Recruiting and hiring
- Education and onboarding
- Talent management
- Payroll and budgeting
- Data analytics
- Rewards and benefits
- Time management
- Absenteeism tracking
What are the benefits of using HCM?
The most obvious advantage of using an HCM system is that it allows you to engage your employees more effectively via improved corporate awareness and well-being. Some of the other major advantages include:
Higher-quality hiring and talent management
Increased inter-departmental communication
Increasingly automated HR for more efficient operation
Better cost-effectiveness and reduced corporate wastage
Better legislation and regulatory compliance
Increased adaptability and corporate agility
What is HCM software?
The only way you are able to set up an HCM system at your company is by using dedicated software that manages all the disparate factors that go into successful HCM. The name can be somewhat misleading as rather than representing one tool or system, HCM software is actually an interdependent suite of software. These include human resources information systems (HRIS) and human resources management systems (HRMS).
There are other software tools that can be included as part of your HCM system depending on your company’s specific requirements. These can include tools to properly manage recruitment like an applicant tracking system and a payroll tool designed to keep track of your finances. It all depends on what exactly your team requires.
If you’re not sure about which specific tools you may need to adopt an HCM system at your company then we can help. The PeopleForce platform is comprised of a number of modular systems that can be used to create a top-quality HCM software suite. Just send us a message and one of our experts will get in touch.