HUMAN CAPITAL MANAGEMENT

 






 What Is Human Capital Management? 


Human capital represents the human factor in the organization; the combined intelligence, skills, and expertise that gives the organization its distinctive character. The human elements of the organization are those that are capable of learning, changing, innovating, and providing the creative thrust which if properly motivated can ensure the long-term survival of the organization. (Bontis et al., 1999)



What Does Human Capital Management Involve?

Human Capital Management (HCM) is a comprehensive strategy that directs?

 ·        Talent attraction

·        Hiring

·        Onboarding

·        Training

·        Development

·        Performance analysis

·        Feedback

 

When combined with well-known industry terms, HCM might have subtle differences.

 

    I.              Human Resources (HR)

            encompasses major HR functions such as recruitment, onboarding, and managing employee-employer     relationships, among others.

   II.         Workforce Management

r         Refers to absence management, time and labor, as well as workforce health and safety.

  III.        Talent Management

            Includes activities involved in the talent life cycle such as recruitment, onboarding, performance  management, career development and succession planning.

  IV.        Human Resources Information System (HRIS)

            keeps track of employee records and HR policies or procedures.





Human capital management elements

The term "human capital management" refers to a wide range of tasks. We've assembled the basic components of human capital management to make things clear.

 

ü  Workforce planning: evaluating the company’s needs in terms of labor and skills to fulfill future staffing needs

ü  Compensation planning: providing competitive compensation to keep up with inflation and allow employees to live a quality life

ü  Recruiting and hiring: the process of finding, evaluating and selecting top candidates for open roles

ü  Onboarding: the process of integrating new employees to the organization through new hire orientations, mentorship and reboarding

ü  Training: providing employees with the opportunities and resources they need to improve their skills and capabilities

ü  Time and attendance: the process of tracking work hours through a time card or punch card for payroll and benefits

ü  Payroll: involves activities such as calculating employee hours, providing compensation and keeping track of financial documentation and transactions

ü  Performance management: activities that ensure employees contribute to the organization through continuous feedback, goal setting and performance review


What Is HCM Software?

 

Many of the tasks and procedures required for efficient workforce management are handled by human capital management software, saving time and money. Often referred to as a human resource management system (HRMS) or human resource information system (HRIS), HCM software (HMRS).

 

Full-featured software automates and makes simple things like:

 

·        Recruiting

·        Applicant tracking

·        Onboarding

·        Employee recordkeeping

·        Workflows and approvals management

·        Time tracking and attendance

·        Payroll

·        Performance management

·        Employee self-service

·        Reporting and analytics


HCM software programs are widely available. Before choosing one, it's critical to carefully evaluate your organization's existing and future needs. Its capabilities and advanced functions vary.

The majority of businesses opt for cloud-based HCM software because it offers a number of advantages like access from anywhere convenience, flexible growth flexibility, and automated software updates. Some businesses purchase HCM software that is installed on their own hard drive or server.


Key Benefits of Human Capital Management Strategy:

 

v  improved retention and reduced turnover

v  increased contentment among employees

v  increased workforce engagement and better employee experience

v  better and more effective hiring procedures

v  enhanced development of talent

v  higher standard of products and services

v  enhanced partner and client experiences

v  greater return on investment for human capital


I've included the YouTube video for your convenience below. Please view the video presentation below.



References

Advantages of Human Capital Management (HCM) Systems. (2021). TEC. [online] 14 Apr. Available at: https://www3.technologyevaluation.com/research/article/hcm-benefits.html [Accessed 16 Apr. 2021].

‌Danao, M. (2022). What Is Human Capital Management (HCM)? [online] Forbes Advisor. Available at: https://www.forbes.com/advisor/business/what-is-human-capital-management/.

‌Gartner (2012). Human Capital Management (hcm). [online] Gartner. Available at: https://www.gartner.com/en/information-technology/glossary/hcm-human-capital-management.

‌Gregoris Mentzas, Apostolou, D., Abecker, A. and Young, R. (2012). Knowledge Asset Management. Springer Science & Business Media.

www.oracle.com. (n.d.). What Is Human Capital Management? | Oracle. [online] Available at: https://www.oracle.com/human-capital-management/what-is-hcm/.

‌www.adp.com. (2020). What is Human Capital Management? | ADP. [online] Available at: https://www.adp.com/resources/articles-and-insights/articles/w/what-is-human-capital-management.aspx.

www.youtube.com. (n.d.). Human Capital Management For Beginners | What is Human Capital Management | HCM Explained. [online] Available at: https://www.youtube.com/watch?v=0oJGhp2F7u4&ab_channel=Intellipaat [Accessed 8 Apr. 2023].

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Lasitha Jayashantha Sandaruwan

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Comments

  1. Nilushika Dilhani JayasingheApril 8, 2023 at 6:08 PM

    Very detailed article Lasitha .Human capital management (HCM) is the process of hiring the right people, managing workforces effectively and optimizing productivity. It has evolved from a mostly administrative function to a critical enabler of business value. Human capital management (HCM) is a process that human resources (HR) departments use to attract talent, support employees and encourage them to reach their full potential. Human capital management can help a company improve employee performance and increase retention .

    ReplyDelete
  2. Chamara PereraApril 12, 2023 at 11:49 AM

    Hi Lasitha, thanks for sharing very informative article. Human capital management is a vast area of HRM, and certainly any organization can benefit from it. However, in most organizations, efforts to implement an effective human capital management strategy have been unsuccessful due to various factors such as lack of money, poor leadership, heavy workloads, poor staff motivation, etc.

    ReplyDelete
  3. Jothi April 21, 2023 at 10:27 PM

    HRM faces a variety of challenges, such as talent management, technological advancements, diversity, equity, and inclusion, employee engagement and retention, workforce planning, compliance and legal issues, and globalization. These challenges require HR managers to stay up-to-date with new trends and tools, create a diverse and inclusive workplace, keep employees engaged and satisfied, and manage compliance and legal issues.

    ReplyDelete
  4. Eashan AnuruddhaApril 21, 2023 at 10:51 PM

    Very impressive article !! The article provides a clear and concise overview of Human Capital Management (HCM), outlining its key components and benefits. The author defines HCM as a comprehensive strategy that covers various HR functions, including talent attraction, hiring, onboarding, training, development, performance analysis, and feedback. The article also provides a breakdown of different industry terms related to HCM, such as Human Resources, Workforce Management, Talent Management, and HR Information System.

    ReplyDelete
    Replies
    1. Lasitha JayashanthaApril 23, 2023 at 10:07 AM

      Thank you for your kind words. I am glad that you found the article informative and helpful. I agree that HCM is a comprehensive strategy that covers various HR functions, and I believe that it is important to have a clear understanding of the different industry terms related to HCM. By understanding the different components of HCM, organizations can develop a more effective HR strategy that can help them achieve their goals.

      Delete
  5. Thusantha BandaraApril 22, 2023 at 9:12 PM

    You have clearly explained what Human Capital Management (HCM) is and what it entails including talent attraction, recruitment, hiring, training, development, performance analysis and feedback. HCM is a comprehensive strategy that includes several elements such as workforce planning, compensation planning, recruiting and hiring, recruitment, training, time and attendance, payroll and performance management. HCM software automates many of these tasks and procedures, making them simple and efficient. Key benefits of an HCM strategy include improved retention and lower turnover, workforce engagement, better hiring procedures, improved talent development, superior products and services, improved partner and client experiences, and greater investment in human capital.

    ReplyDelete
    Replies
    1. Lasitha JayashanthaApril 23, 2023 at 10:08 AM

      Thank you! I'm glad that my explanation was clear and informative. Human Capital Management (HCM) is a very important aspect of any business, and it's important to have a good understanding of what it is and how it can be used to improve the company. HCM software can be a great way to automate many of the tasks involved in HCM, and it can make it much easier for businesses to manage their employees

      Delete
  6. Lasitha JayashanthaApril 23, 2023 at 10:07 AM

    This comment has been removed by the author.

    ReplyDelete

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