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Human Capital Management
Why Is Human Capital Management Important?
HCM is a set of practices related to people resource management. These practices are focused on the organizational need to provide specific competencies and are implemented in three categories: workforce acquisition, workforce management and workforce optimization. Human Capital Management is important because employees, the individuals who spend much time each day working and contributing to the success of an organization, are a valuable resource that can either make or break an organization.
Thus, Human Capital Management is essential for acquiring and retaining high-performing employees. The responsibility of human resource professionals is to create and implement ways for employees to be hired, oriented, trained, motivated, and engaged. Human Capital Management plays an essential role in helping the organization’s human resources department increase the overall productivity and happiness of employees. In turn, productive and happy employees work harder and care more about the success of the organization. What Are the Problems of Human Capital Management? A few of the potential problems of Human Capital Management are poor performance management, non-strategic workforce planning, weak usage of workforce analytics, mismanagement of organizational change, and the high cost of unsolved challenges.
The core functions of Human Capital Management?
- Hire: Talent acquisition is a crucial responsibility that must be taken seriously in order to have a well-functioning organization.
- Orient: Through the efforts of HCM, new employees must be onboarded efficiently and introduced into the company culture quickly.
- Train: HCM must give employees enough motivation to advance their knowledge and skills for organizational contribution.
- Retain: Keeping employees satisfied in their job position, as well as with the company itself, is an important function of HCM. What Is HCM Software?
- HR: Refers to a set of traditional employee management functions that includes hiring, job and position management, global HR compliance, and reporting.
- HCM: Encompasses the same processes, but also includes workforce rewards and talent and workfor
- HRMS: Refers to the set of applications and other technologies that support and automate HR processes throughout the employee lifecycle. While the terms HCM and HRMS are often used synonymously, HCM puts particular emphasis on the strategic approach to managing employees.
- HRIS: Originally referred to keeping administrative employee records. It has been largely replaced by the term HRMS. In practice, HRMS and HRIS are virtually interchangeable terms.
- Talent management: Looks at the strategic management of talent throughout the talent lifecycle. It includes sourcing and recruiting candidates, goal and performance management, learning and career development, talent review, and succession management.
- Workforce rewards: Refers to all HR functions that manage any monetary or nonmonetary rewards including compensation, benefits, or payroll.
- Workforce management: Involves all HR functions that are related to positive and negative time management including time and labor and absence management.
Problem #1: Poor Performance Management
HCM is not very effective when managing performance if the system isn’t driven by an overall purpose and if the opportunity isn’t taken to fuse together both strategic and tactical approaches.
Problem #2: Non-Strategic Workforce Planning
Sometimes, HCM is too focused on tracking headcount, turnover, and time-to-fill rather than ensuring the organization is best prepared to anticipate challenges and quickly adapting to them.
Problem #3: Weak Usage of Workforce Analytics
Although many HR professionals agree that strong workforce analytics are important to their organization, they also admit to not using it effectively enough with meaningful metrics such as Quality of Movement and Quality of Attrition.
Problem #4: Mismanagement of Organizational Change
HCM can function reactively, rather than proactively, when organizational change isn’t anticipated. When falling behind or trying to keep pace with sudden changes, the chance for HCM mismanagement is high.
Problem #5: High Cost of Unsolved Challenges
Without recognizing challenges early, HCM will be prone to gaps between its current leadership and human capital capabilities, and the leadership and capabilities required to reach future organizational goals.