How you run your human resources department can have a big impact on your success as a business.
But there are many ways in which you can go about it. The one we’re looking at today is one of the most popular. Let’s take a closer look.
What is the meaning of human capital management?
HCM involves a batch of practices that relate to resource management. Simply put, those practices focus on your business’ organisational requirements across recruitment, staff management, and optimising your workforce.
In short, strategic human capital management is a system that helps streamline your HR department through administrative and strategic practices.
If that all still sounds a bit unclear, don’t worry—we explain everything you need to know about HCM in the rest of this guide.
We also take a look at how the right software can help your business run smoothly. So, let’s take a closer look.
Human capital management research suggests it’s transforming the way many businesses go about their administrative duties and employee management.
What does human capital management involve?
HCM covers administrative, strategic, and tactical support. Within each area, there’s a lot to cover and manage—that’s of the reasons why it’s so effective. It covers many bases simultaneously.
But the basic components of human capital management are as follows:
- Recruitment and applicant tracking
- The onboarding process
- HR management
- Benefits
- Performance assessments
- Talent assessments
- Time and labour documentation
- Payroll
It’s global human capital management of your whole business—whether you have multiple offices or everything is in one tiny village in the countryside.
So, let’s have a breakdown of human capital management processes:
Administrative: Covers the typical admin duties of your HR department, including the likes of:
- Personnel
- Benefits
- Payroll
- Rules and procedures
- Employee self-service portal
Strategic and tactical: This is for your hiring strategy and other performance-related tasks. Including:
- Organisation
- Workforce planning
- Contingent workforce management
- The recruitment process
- Hiring
- Your induction process
- Wage planning
- Competency management
- Workflow
- Reporting
As you can see, there’s a lot to take into consideration here. But it’ll make your HR activities run in a streamlined fashion. Plus, with extra bonuses.
The importance of human capital management
You should consider HCM as employees are essential to your success as a business.
And if you’re using the right procedures, you can ensure they’re performing to the highest possible level.
To make that happen, your HR department has to manage ways to engage, train, and motivate your employees.
And that’s where focus on HCM comes in useful, as it helps your HR staff to increase productivity and manage the way your employees engage with your working environment.
The good news is there’s software you can take advantage of to manage all of the above.
With one digital product, you can effectively manage the lot—so, let’s take a look at what’s available for you.
Human capital management software
Our smart HR software offers a bit of everything for your business. There’s a mixture of everything on offer to make your daily business functioning easier.
Some of the features you can take advantage of include:
- A back to work navigator tool to help you reopen during the coronavirus pandemic.
- Track furloughed staff with our navigator tool.
- Complete HR software so you can approve staff holidays or manage sick days.
- Plan your staff shifts and rotas with ease.
- Unlimited document storage in a secure cloud environment.
- The PoP expense tracker for staff who are regularly on the move.
- The Blip app—easily manage your clocking in and out times with nifty QR codes.
It’s a fully integrated service, so whatever your requirement may be, we’ll more than likely cover that for you.
The benefits of human capital management software
HCM software can help you manage your human capital and human resource management.
It provides numerous advantages—here are just a few human capital management software solutions available:
- It’s a unified platform: That means your payroll, HR, and management requirements are all in one place. That means it’s an integrated platform, so no faffing about with multiple installations and packages.
- Improve employee development and retention: Your managers can effortlessly check the records of your staff to see who is performing, or underperforming. This makes it easy to identify issues and help your employees improve.
- Useful for staff: Employees can use HCM to easily clock in and out, which makes it easier to monitor the hours they work.
- Improve your recruitment: HCM is a way to manage and identify the CVs you receive, making it possible to streamline your activities in choosing new candidates.
- Schedule your payday: There’s no problem in automating your payroll, either, so employees receive their salary without delays.
- Improve your reporting: The software simply lets you manage a mass of data in one area—so, no lost records. Everything available to you whenever you need it.
In short, it’ll make your daily working life easier. And why wouldn’t you want to benefit from that?
Human capital management VS human resource management
The difference here is pretty simple. We’ll break it down for you:
- HRM: This is where you manage individuals within your business using policies and practices.
- HCM: Similar to the above, but you manage them based on their skills, training, experience, intelligence etc.
Which one you use depends on your business requirements. You can, in fact, use both at the same time. And they provide different benefits in streamlining your HR needs.
But if you specifically want to manage your employees towards higher performance and better productivity, then HCM is the choice for you.
Human capital management case studies
If you’re not sold on the idea just yet, you should know many industry leading businesses use the approach to manage their workforce.
Human capital management at Goldman Sachs, for example, helps the financial services company to attract new staff and develop its international workforce.
It’s, essentially, about creating and developing employees so they can meet the company culture expectations and remain with the business long-term.
And if it works for a major global firm, then it’ll no doubt work wonders for your business, too.
The human capital management market will be worth $24.3 billion by 2025. So, maybe now is the time to take the leap and manage your staff with industry-leading HCM software.