Human capital management is a process of hiring, retaining, managing, training, and upgrading the skills of the workforce for the growth and development of an organization. In simple words, it is about treating the employees as important resources that will play a significant role in boosting the efficiency and productivity of the organization.
What is Human Capital Management?
Human capital management is all about managing the human capital or the workforce of a company as the employees are considered significant contributors to overall productivity.
This is a meaningful concept that believes the current value of human capital or assets can be measured, and their future value can be easily improved through proper investment like upgrading skills and know-how through learning or training programs.
If a company wants to create a unique place in the market, it has to focus on human capital management. It is one of the most critical aspects of an organization that ensures that the needs of the employees are met so that they can tackle all the challenges that come in their way.
Human capital management is considered as a set of practices that have put its onus on fulfilling organizational needs. There are many players in the field that offers customized solutions to meet their requirements.
Some of the best human capital management software is from companies like Zoho, BambooHR, PeopleSoft, Oracle, SAP, etc.
Steps to improve Human Capital Management in an Organization
Take the following steps to prioritize and improve human capital management in an organization
1. Create human capital management based culture
An organization needs to create an HCM-based culture and invest in its employees fully. Include all the senior leaders in the process and explain the value of this system in a detailed manner.
It is easy to build an HCM culture with top management on board if you are looking for steps to improve it in an organization
2. Focus on the existing employees
If you are looking for steps to prioritize human capital management in an organization, then focus on the current employees and employee development. Remember, hiring and Onboarding are critical processes but not as important as keeping your employees engaged and happy.
Think of every employee as a valuable resource and make sure you are offering learning processes, training, feedback, and review to encourage the progress and growth of every employee.
3. Put your onus on connecting with employees
If you are looking for steps to improve the HCM-based system, then put your onus on connecting with the employees. Take a personalized approach after taking into account the preference of the employee in communicating with him.
Cater to his needs; learn how to manage him, conduct frequent check-ins for a one-on-one relationship.
4. Invest in the right technology
HCM is an ongoing process that has been designed to be measurable and sustainable. If you are looking for steps to improve the HCM-based system, then make sure you are investing in and implementing the right tech tools for your organization.
Build an automated process with the help of the right technology so that it becomes easy to know the employees who are the cornerstone of every business entity.
5. Open communication
Change is imminent and sometimes scary, and the fact is that everyone should be prepared for it. When an organization is ready to implement an HCM-based system, it should openly communicate about its pros and its impact on the employees beforehand.
If you are looking for steps to improve the HCM-based system, then take a transparent and positive approach to keep the employees in your corner. Employees are generally afraid of change as they do not know how it will have an impact on them.
It is at such times that communication is essential. Tell them what is going on and assure them that the organization is with them during the transitional period and even later on.
This will send a positive message out there and help you in improving and prioritizing the HCM-based system
Important Human capital management trends for 2021
The key HCM-based trends for 2020 are
1. A positive approach towards AI
By the year 2020, employees in the organization have become receptive to the use of AI in world culture. They are ready for AI and human collaboration.
It shows that human capital management systems will need to be created in such a manner that it will be able to manage both non-human and human employees
2. AI will soon become a reality and not an option
More and more organizations are embracing the use of AI or Artificial Intelligence solutions, and it is a fact that AI will soon become a reality and not an option.
3. Use of Chatbots
The key HCM-based trends of 2020 include using Chatbots as it is fast and efficient.
4. Make way for Digital Assistants
The human capital management trends for 2020 show a strong inclination towards Digital Assistants that are accessible via SMS or voice. It offers tailored responses to simple tasks as well as complicated subjects
5. Mobile recruitment
Human capital management trends for 2020 include adopting mobile recruitment. Empowering the workforce with consumer-grade mobile apps is a smarter hiring strategy.
Functions of human capital management
The key human capital management functions are
The HCM-based system is very advantageous during the recruitment process of an organization. Its function is to manage human capital and thus oversees all the aspects related to recruitment from the initial stage to the interviews and the actual hiring.
The system also proves beneficial while offering contract-based or freelance opportunities based on business needs and requirements.
An important function of HCM is to provide a smooth Onboarding process to make the journey of an employee as easy as possible
It is the function of the HCM system to control the flow of the workforce in and out of the company. It is the one to terminate employees who it thinks are unable to meet the business needs
New employees have to be trained so that they can understand and later adjust to the new set-up. Similarly, it is essential to offer training opportunities to existing employees so that they can upgrade their skills and knowledge.
The function of an HCM-based system is to maintain its focus on providing training opportunities to all the employees who require it
5. Employee retention
A vital function of the HCM-based system is employee retention. Hiring and Onboarding are challenging, but nurturing and retaining the best of talents is even more difficult.
6. Employee morale
The function of an HCM-based system is to understand the employees, communicate with them in matters that are important for them, and keep their morale high at all times
Benefits of human capital management
The benefits of human capital management are
- HCM is considered beneficial for an organization as it helps to recruit the right candidate for the job position. It also boosts the hiring speed and recruitment process
- The HCM-based system is considered beneficial for an organization as it helps to attract and retain quality talent
- HCM is considered beneficial for an organization as it delivers a superior employee experience and keeps them motivated and happy
- HCM is considered beneficial for an organization that helps to nurture talent by offering learning and growth opportunities through the training process
- HCM is considered beneficial for an organization as it boosts the bench strength through proactive succession planning for key roles
- HCM is considered beneficial for an organization as it optimizes employee management and spending. It allocates the right mix of non-monetary as well as monetary rewards to keep the employees happy, manages labor and time-related expenses, and maintains expenses for all the projects. The HCM helps to create a pay-for-performance system
- HCM is considered beneficial for an organization as it helps the employee to tackle change. It creates HR processes in such a manner that it can also tackle change effectively. It anticipates employee attrition, and this helps the company to address related issues promptly
- HCM is considered beneficial for an organization as it aligns business strategy with that of the employees so that both can benefit from this association
- HCM is considered beneficial for an organization as it helps in streamlining HR operations by consolidating HRMS and accelerating HR processes.
- HCM is considered beneficial for an organization as it automates manual processes and leverage analytics to ensure intelligent employee decisions.
Human capital management is considered a valuable strategy and a useful tool for an organization. This is why there is a need to adopt it as part of the system on a priority basis.
It is a viable approach to recruit the best possible applicant, develop his skills, nurture his potential, keep him engaged, and help him to find further success as his professional growth means organizational development.