How Can My Business Improve Human Capital Management?
While there has been an influx of new workers in the labor market, competition will remain fierce. Knowledge workers are still in high demand, and experts predict demand will remain high in the near term. Employers are looking at strategies to attract and retain talent, sometimes by offering higher salaries. However, with rising costs, not all businesses will be able to compete with higher wages. Companies seek a wide range of options to attract and retain employees – often without knowing which approaches will be most effective for their business.
Many businesses face the dilemma of balancing rising costs by employing top-notch performers when employee engagement is at a historic low. As companies look at recruiting and retaining the best people, there is an opportunity to improve human capital management.
What Is Human Capital Management?
Sometimes people think that Human Capital Management is just a fancy way to say Human Resources. The distinction between the two is subtle but essential. Human Resources and Human Capital Management (HCM) encompass the organizational practices related to your workforce’s acquisition, management, and development. The focus in HCM is strategic – finding the right people for your company and managing them effectively. HCM is data-driven and process and people-focused, and it drives outcomes for your business.
The term has been around since the 1950s and has moved in an out of common usage. Today, Human Capital Management is back as state-of-the-art Human Resources Information Systems, capable of tracking key outcomes for individual employees, different teams, and the entire company. This provides a data-driven way to track outcomes and measure the effectiveness of human resources initiatives.
HCM includes the same processes as traditional employee recruitment and management but consists of a higher-level strategy and operational components. It encompasses the entire employee lifecycle from recruitment and onboarding, payroll, benefits, development, and performance management to retirement. A robust Human Resources Information Management System is essential to ensure company leadership can access relevant metrics and analytics.
Human capital management is the next level in strategically driving outcomes for your business. After all, your company realizes its aspirations for growth and value from effectively managing your teams.
Businesses with solid HCM programs can respond to trends including tight labor markets, changing demographics, increased use of independent contractors, increased compliance requirements, remote and hybrid workforces, and flat organizations. Because Human Resources affects every employee and every department, improvements made in Human Capital Management can have big payoffs.
Key outcomes of a fully implemented Human Capital Management initiative include:
- The strategic alignment of Human Resources with other business objectives.
- Increased agility to respond to planned and unforeseen changes.
- Increased bench strength through the strategic development of employees.
- Optimized workforce, ensuring the greatest return on investment.
- A more effective and streamlined Human Resource operation.
- More effective workforce analysis and more insightful decision-making through human capital metrics.
- Customized solutions for compensation, benefits, and rewards.
- A vibrant performance-based culture where learning and impact are valued.
One of the first steps you can take towards improving your Human Capital Management is understanding the possibilities.
Assess your current systems and ask yourself:
- Do I have the data available to track the effectiveness of my company’s HR initiatives?
- Does my current human resources system allow my business to align my HR initiatives with the strategic opportunities and challenges my business will face?
- Do my business’s processes and data support the development of a talent pipeline to meet our future leadership needs?
- Does my current system help me get the most value for my investment in my employees?
Contact Us Today
With innovative technology, a knowledgeable staff, and personalized attention, TANDIUM can help you evaluate your current systems and find out if elevating your human resources functions to a next-level Human Capital Management system is right for your business. TANDIUM Corporation specializes in serving the Human Resources, Payroll, and Benefits needs of companies and non-profit organizations. Contact us today to schedule a free initial consultation.