What is Human Capital Management (HCM)

Human Capital Management (HCM) refers to an organization’s comprehensive plan and a set of practices for recruiting, managing, developing and optimizing employees to maximize their values towards an organization. Below are three questions that you must ask yourself when it comes to structuring your human resource (HR) planning.  

• What are the processes your company goes through when it comes to hiring? 
• Are they sustainable? 
• Do they add value for both parties? 

The graphic below illustrates the core of the HCM concept in a simplified way and yes, it’s more than the standard HR methods.

WHY IS HUMAN CAPITAL MANAGEMENT (HCM) SO IMPORTANT

It’s a game of pennywise pound foolish. Do you want to secure talents instantly but lose them as quickly as they joined? We sure hope not. It is a thoughtful process that requires plenty of consideration and planning.

Employees are the pillars of any functional company; they are individuals who dedicate each day to fulfilling duties that contribute to the success of an organization. They are an extremely valuable resource that can cause the company to soar or flop under different circumstances.

WHAT HCM PROBLEMS DO ORGANIZATIONS FACE IN 2020

Even a well-crafted HCM strategy can face problems if there are hindrances and below are some typical examples. 

Problem 1: Poor performance management

There must be an overall purpose to the HCM system when managing performance otherwise strategic and tactical approaches will not work.

Problem 2: Non-strategic workforce planning

HCM deals with a broader scope of things instead of mere tracking headcount or turn-over issues, it’s ensuring the organization is ready to anticipate forthcoming challenges.

Problem 3: Weak usage of workforce analytics

This goldmine of data packs a punch but if underutilized it amounts to nil, and HR professionals have admitted to not using it with meaningful metrics such as Quality of Movement and Quality of Attrition.

The focus of HCM is strategic and tactical competencies which can be defined as “a required skill, attribute or behaviour for a specified job used to define and measure an individual’s effectiveness”. After nailing down the competencies required for a specified vacancy, we recommend reaching out for a complete set of recruitment services, as below:

YOUR RECRUITMENT SOLUTION

TalenX offers a unique talent selection solution in the recruitment stage which acts as a massive filter in categorizing competencies. Ultimately, it is all about the fit right? We want a fuss-free consolidated dashboard of sorts to rank our prospects, that’s what you’ll get.

A bonus is that the solution comes with a bespoke report to give you detailed insights to your prospects’ overall ranking. Discover their thriving areas and those that needs some work, this gives you a great opportunity to utilize manpower effectiveness in decision-making, task-delegation, etc.

The second bonus is that it you’ll gain access to Job Profiles, the ultimate benchmarking standard for candidates. TalenX features a database of profiles researched by experts to wholly identify the scope of work and responsibilities that come along with the role thus making the search for the best fit a seamless one. Find out more or get a free trial here.

Problem 4: Mismanagement of organizational change

Such situations take place when there is insufficient effort towards organizational change, when change occurred and was not anticipated in time.

Problem 5: High cost of unsolved challenges 

Relating to the Problem 4, if changes are not anticipated, HCM will likely have gaps between existing leaders and human capital capabilities and this may be harmful in achieving future organizational goals.

WHAT ARE THE FUNCTIONS OF HUMAN CAPITAL MANAGEMENT

HIRE

Harver describes “embracing the flexible workforce” as one of the 11 hottest recruiting trends of 2019. This throws HR professionals a curveball as hiring goes beyond full-time and part-time jobs. In the US alone, 36% of all workers (around 57 million people) are in the gig economy and are loving it. It is key to remain creative and constantly abreast change as the hiring landscape today is quite candidate driven.

HCM plays a big role here. From the job advert to making connections and prepping candidates and so on, how well you prepare during this stage will likely determine the fit.

ORIENT

Effective onboarding is crucial. Orienting them properly into their role and scope can be the reason someone thrives at work or chooses to leave. We believe in defining the role clearly and this takes extra effort and time, be available to answer queries or concerns. New employees often feel uncomfortable only because they are new to the role, thus communicating and letting them know what is expected of them is key.

Next, have the manager check-in. More than demeanour, managers are experienced at handling such situations. It has proven beneficial for employees when managers establish a good relationship early on, this gives the new employee time to get used to communicating with their manager and lowering their guard when approaching their “boss”.

Much like moving into a new house, new employees may not be accustomed to the culture of the new working environment. Reaching out to them and establishing an emotional connection in an orientation program is highly recommended. It’s a phenomenal way to learn and unlearn things and get new employees ready as you welcome them into their new “home”.

TRAIN

How should you train your employees? The best way you can. Your people will always be your biggest investment, your best asset and the driving force of your organization’s success. With training coupled with your HCM system, they will be given the knowledge and tools to thrive in achieving their personal and your organizational goals.

Training is about supplying what an employee needs to perform their responsibilities effectively and add value to the organization. It looks into the employee’s value proposition for a company and assess if any reskilling or upskilling is required along the way as the employee progresses.  

RETAIN

“Train people well enough so they can leave, treat them well enough, so they don’t want to.” said Richard Branson. It’s not easy to live up to that but with a game plan in mind that’s executed well, the flow of recruitment and onboarding can be a rewarding experience for you and your organization.

Remember that a happy employee births more of their kind and on the south side, an unsatisfied and disgruntled employee can be toxic to their colleagues and department. Choose to prioritize core learning opportunities, strong frameworks for career development, key health and wellness systems and an unwavering commitment to diversity and inclusion to retain employees in a wholesome way. We believe this process can start with a suitable HCM software.

WHAT IS HCM SOFTWARE?

It refers to a comprehensive way of integrating all HR and HCM applications on a single platform. You will be able to have insights to your hiring strategies, onboarding plans and more on this software which will act as a guide in your decision making in HCM. There are many types of HCM software in the market, some can be installed locally others are available via an online subscription service such as TalenX.

THE MUST-HAVE FEATURES OF A GOOD HCM SOFTWARE

1.Enables better understanding in recruitment and applicant tracking

Have an organised strategy to ensure prospects are the best fit and right for the role.

2.Integrates with payroll, tax processing, benefits and administration systems

Relevant data of a candidate displayed on a single screen for better planning and decision-making.

3.Churns a customized report

After interviews, comparing from memory can be challenging since we may forget.

Reports about a candidate’s strengths, opportunities, history and more is a good point of reference.

4.Offers 24/7 access from anywhere

Not all HCM activities happen at work, gain access to the data you need at a convenient, secure space online.

5.Secures data encryption

Information about your employees are strictly confidential, keep them under lock and key with a good HCM software

The HCM system can be seen has a lifecycle that strives to improve an organization’s overall HR processes. Beyond that, it is a way to transform the casual and basic recruitment process into one which will add value both to the employee and organization.

TalenX will be publishing high quality, well-crafted human resources related articles on a regular basis. Please bookmark our blog or subscribe to our newsletter to stay updated on the latest trends in HR.

References:

https://smallbusiness.chron.com/workplace-competencies-46820.html
https://talenx.io/talent-selection/
https://inside.6q.io/5-great-reasons-why-happiness-increases-productivity/
https://www.forbes.com/sites/joyburnford/2019/05/28/flexible-working-the-way-of-the-future/#61f74be74874
https://harver.com/blog/recruiting-trends-2019/#FlexibleWorkforce
https://www.forbes.com/sites/tjmccue/2018/08/31/57-million-u-s-workers-are-part-of-the-gig-economy/#55e2e2ff7118
https://culvercareers.com/blog/3-steps-successful-employee-onboarding-process/
https://www.opensesame.com/site/blog/how-training-is-integral-to-achieving-all-of-your-organizations-hr-goals-and-human-capital-management-hcm-system/
https://hrexecutive.com/how-do-you-keep-your-sense-of-humanity-in-hr/