What Is Human Capital Management?
Human capital management (HCM) refers to all the kinds of practices engaged in managing, recruiting, and developing human resources for an enterprise. This term encourages one to think of the human labour of a company as assets. This kind of thought process, in turn, allows for more financial and managerial investment in them. But the question which frequently pops up this field is- \"Why is there even a need to invest in human capital management?\"
So here\'s a list of the fields where human capital management works its magic:
· Tackling changing demographic dynamics: A human workforce is bound to get old. It means a new and young workforce will inevitably have to bring. These new workers will bring in different styles of working, which will be reflective of their age and the times they live. But this might not always align with the needs of the organization. So it will have to be adjusted for optimum company-workforce happiness.
· Freelancing economy: In the list of a company\'s human resources, other temporary workers like freelancers and contractors also come in. Since these workers are not on the permanent payroll of a company, so they complicate various worker issues related to taxes, contract schedules, employment regulations, and more. It is where human capital management comes in to regulate it all.
· Remote workforce: Changing times and rising costs force existing businesses to adapt to new ways of doing business. One of the means of doing so is by modifying the remote-working model. In this setup, full-time employees carry out organizational work but from a remote place. But before that, human resource management has to come up with creative ways, ranging from traditional workshops to using VR to train them in what the organization wants.
· Big HR data: Every organization collects vast amounts of data on its workforce. It includes the work done, how it is done, the time is taken to do it, and more. Human capital management comes with the tools and methodology which allow a human resource to analyze and manage the data in an efficient manner properly.
What is HCM software?
What many might not realize is that human capital management makes use of software systems for a variety of purposes. It ranges from training employees to gathering comprehensive data related to human resources and more. This technology helps in streamlining various operations like payroll, timekeeping processes, etc. These software systems are brought in to replace the on-site HR programs. All this enables people to get better investment returns. Most of these HCM solutions use cloud-based technology to operate. But that\'s not the only benefit which HCM software has:
· HCM technologies help in recruiting, managing, compensating, as well as developing and regulating performance management.
· It helps in workforce management by coordinating the dispersal of employees with specific skill sets to those particular areas which need it.
· HCM technologies also help with attendance, labor scheduling, budgeting, time management, and more.
· HCM software systems also assist in cross-platform communication like in the case of social media collaboration, analytics, and more. Human resource personnel also get mobile access to some HR applications and data.
People frequently fail to realize that the success of a business is closely intertwining with human capital management. In today\'s continuously changing business world, human resource managers need to act more proactively rather than retroactively. Overall, human capital management is a very underrated area of work. This field, if effectively put to work, has the potential to make the entire organization operate smoothly, only because it specializes ins the most moving and volatile part of it-workers.