Human Capital Management, abbreviated to HCM, refers to the process of hiring and managing staff while optimising productivity in the workplace. It’s all about getting the most out of employees, and if done correctly, it can have very positive results for the business in question.
Proper HCM ought to lead to the recruitment and hiring of talent that is appropriate for the company – staff having all the necessary skills to be able to thrive within the business’s environment. HCM means that staff are managed effectively, allowing everyone to be happy and productive, ultimately leading to increased productivity.
Main Elements of HCM
HCM consists of a variety of administrative tasks that need to be performed, covering everything to do with hiring and onboarding to managing current staff and keeping track of employees.
The main elements of HCM include:
- Recruitment of potential new employees
- The onboarding process
- Payroll services
- Managing staff attendance
- Talent management
- Training of both new and old staff
- Managing employee benefits and retirement services
- Reporting and analytics on employees
- Staff compliance
In many respects, properly managing human capital is one of the most important responsibilities of companies – specifically, the human resources department – so putting the appropriate time and effort into these tasks is essential for a properly functioning business.
Why is HCM Important?
Ultimately, the primary goal of managing human capital is to improve productivity and help the business increase revenue. This includes improving efficiency and eliminating redundancies.
Proper human capital management means that you’ll be able to enjoy better organisation in your business operations, improved efficiency, lower costs, improved engagement and ultimately, a better return on investment on human capital (arguably the most important investment any company will make).
Of course, human resources is involved in just about every area of your organisation, affecting every single employee. The main reasons why and ways in which human capital management is so important in the current modern (and evolving) workplace environment include:
- Changing demographics in the workforce and being productive in remote environments
- Tightening labour markets and an increased need for specialised skill
- Changing and increasing compliance regulations
- Increased availability of contract-based and freelance employees
- The prevalence of team-based work structures
- A massive increase in available workforce data
HCM Strategies to Improve Business Operations
So, if proper HCM is so important and has the potential to result in excellent return on investment, what is the best way to go about using HCM strategies to improve operations?
There are several different methods and strategies that can be used to achieve this:
- Make use of top-quality HCM software
- Implement a strategy to handle position management of staff
- Streamline the important processes of recruitment, onboarding and training
- Automate communication methods and general workflows
- Establish methods for engagement for employees
- Automate payroll services
- Give customers the opportunity to utilise self-service features
- Ensure that you integrate your HCM software with other tools and services
People – employees, specifically – form the backbone of any and every company, and it’s essential that staff are not only looked after and kept happy, but that they’re provided with the tools they need to be able to do their jobs as well as possible.
That’s why human capital management ought to be regarded as one of the most important aspects of running a successful business, and it is, undoubtedly, the secret to a scalable company in the future.
