Human Capital Management (HCM)
What is HCM?
An organized and efficient skilled force is the backbone of all successful organizations. Today’s Human Capital Management (HCM) systems are designed to efficiently and intelligently manage a spectrum of Human Resources processes beginning from acquisition and recruitment to training, engagement, payroll and performance management.
Traditionally employees followed a strict chartered career path, looked only for benefits and increments. Today organizations comprise of global teams, working out of varied locations and geographies. Moreover, employees seek flexibility as well as learning opportunities at their organizations. HCM systems can help provide business managers with better visibility over these diverse teams. Not only this, HCM solutions use the latest technologies available to help businesses harness and nurture the best talent, improve collaboration and increase employee engagement and retention.
What does HCM do?
An efficient HCM system helps a company utilize its human capital to achieve its strategic objectives. From ensuring that the right set of candidates are hired as company assets to ensuring that these assets are valued and developed through strategic management, HCM software solutions are intelligently developed to boost company productivity.
The older Human Resources Management Systems (HRMS) software also provided functionalities of payroll, recordkeeping and performance management. However, these unconnected systems in HRMS did not communicate with each other or with other business ERP systems, which led to inconsistencies and errors that could impact the organization’s productivity.
The newer HCM software can help you achieve much more. With HCM systems, you can now identify and target skilled workers according to the company profile. You can also launch and conduct skill development programs as well as customize performance goals for employees and track their progress.
Function areas
HCM systems are fast replacing traditional HRMS by providing core administrative and human resources support in the form of:
- Personnel management
- Payroll Handling and Benefits administration
- Employee self-service and ticket handling
In addition, HCM systems provide strategic support such as:
- Recruitment: Managers can now actively forecast what skills would their business need over a period of time. These inputs fuel timely planning and preparation for recruitment drives. The system also identifies the right set of candidates that helps in improved workforce preparation.
- Workforce planning and Organization Visualization: In today’s world with global teams, armed with an integrated database, managers can easily view the strengths and skills of their team and designate projects to the right employee.
- Training and Skill Development: In order to strengthen the skills of the workforce, business managers can establish competency models, evaluate individuals and draw personalized roadmaps for upskilling.
- Performance tracking management: Instead of scheduling fixed performance reviews, managers can now set flexible goals for their teams and individuals and track them consistently throughout the year. This also ensures greater transparency and increases motivation within teams.
Trends and Industry Needs
Just having a technology platform to support HR functions is no longer enough. Integration with ERPs is just the beginning. In order to truly support businesses, HCM must empower managers with meaningful and actionable data and insights, and at the same time be flexible and scalable to address large industry needs.
Artificial Intelligence and Machine Learning: Using HCM powered by Artificial Intelligence, HR managers can now automate repetitive processes and reach out to the right candidates for smart recruitment.
Use of Big Data Analytics: HR professionals can now harness the power of big data to drive employee engagement and retention. From building a data-driven compensation strategy to driving need-based learning and development initiatives across the company, data has made it all possible.
Mobile compatibility: HCM solutions are increasingly growing smartphone friendly, with solutions that allow both managers and employees to utilize services and address needs on the go.
Top HCM software vendors
- SAP SuccessFactors: One of the market leaders in HCM systems and an integrated suite with SAP’s ERP, SuccessFactors provides powerful analytics along with a strong focus on talent management.
- Workday: With a strong focus on finance and human resources, this HCM software is ideal for mid-sized enterprises, as it helps them navigate through complex business environments.
- ADP: With a strong focus on ensuring global compliance and scale, ADP’s HCM solutions integrate easily with ERPs and also provide customization for small, mid-sized and large companies.