A transformation from traditional Human Resource Management, which deals with recruiting, payroll management, training, compensation, and performance management, to an organized system that enhances productivity, drives engagement, and contributes towards business value; could be a possible definition of Human Capital Management (HCM). But this is not enough, let’s take a deeper look into human capital management.
What Is Human Capital Management (HCM)?
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Whether you are a global MNC or any SMB, efficient management of your people resources is the key factor that decides your growth, or decline, if not managed properly. Human resources is the core business asset whose potential can be maximized with strategic investment and guided management. With this, the definition of Human Capital Management could be coined as, a system that undertakes the most important task of any organization, which is, managing the human resources from hire to retire, because it is very obvious that investing in your people resources, not only boosts their creativity, increase productivity, but is also true that if there is any kind of mismanagement in practicing Human Capital Management, this could result in scenarios of missed revenues and opportunity, higher cost of labor, and biggest setback to any organization, losing their best talents because it is very true that people leave management and not companies.
With this, there arises the query, what are the things that a Human Capital Management system takes care of while managing the people resources for any organization, so let’s have a look at the major
Functional Components of Human Capital Management Systems:-
HR Management:
An efficient Human Capital Management system has the capability to assist any company’s HR team in looking after the employee lifecycle, help the concerned managers in creating job structures, manage the documents of the employees, keep track of their performance; provide HR help-desk solutions for sensitive HR issues, and most importantly taking care of employee wellness, motivating your employees for the competition which boosts their performance.
Talent Management:
Human Capital Management also helps in creating a presentable candidate-centric experience and incorporates the best technologies to match the best-fit candidates for the jobs; helps the management to guide and align their people resources with their business goals and guidance to optimize performance and at the same time help the employees too to achieve their career goals. It also incorporates a robust use of data-based operations and indicators which can help the companies to plan out learning and training programs for their talents, which is a very necessary factor to keep at par with the ever-advancing market.
Reward and Compensation Management:
HCM not only helps in managing and optimizing labor costs and minimizing manual processes but also makes sure that the best reward and compensation practices are incorporated to attract and retain the best talents with evolved rewarding strategies. It also helps in processing payrolls and managing tax and other local government laws and regulations.
Now, we know the definition of Human Capital Management (HCM) and the core components which are taken care of by the HCM system, but as for a company that wants to invest in HCM, one question is very important,
What are the benefits of an HCM system?
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The benefits of the Human Capital Management (HCM) system are majorly in the areas which are the functional components of the HCM system, as we discussed above,
HCM helps in the attraction and retention of candidates, by quickly targeting and recruiting the best candidates; increasing the engagement of the people resource with their work to motivate them and optimize their productivity; nurturing the talents, and providing them with learning opportunities that help them grow and become an asset for the organization.
It helps the managers in managing payrolls, rewards, and compensation, allocation of financial and non-financial rewards; scheduling, time management, and workforce management for any project, and taking care of project-specific costs.
It’s a solution that helps any organization to automate its manual human resource management processes, locally and globally; and manage the workforce to keep them ready for organizational change; HCM provides data-based insights that help the management anticipate and prepare themselves for any major changes or company policy.
In brief, Human Capital Management is an extraordinary, SaaS-based, Human Resource manager for your company, which is equipped with the best HR technologies power of AI and data processing and analytics, that help it to make decisions, forecast and plan strategies, from increasing the efficiency in bench strength for major roles to taking care of labor cost and ideas and strategies for optimizing employee productivity, and contribute towards the growth of your organization while keeping your human resource at par with the advancing global market.
With all this being said, readers surely get an insight, into the new trend of managing the people resources for any company which takes care of each and every part of human resources, which brings a positive surge in motivation and productivity of your employees, supplement employee experience throughout their employment assist the workforce contribute towards the growth of the organization, could be the best possible definition of Human Capital Management.
