How To Improve Human Capital Management

A human capital management strategy (HCM) can influence every aspect of your business and transform your operations. Today's HCM solutions are robust, sophisticated tools that can help you streamline HR workflows, allow instant access to employee records, and integrate personnel, payroll, and benefits information. In addition, HCM can aid with data-driven decision making. To do it right and reap dividends in cost savings, labor efficiency, and employee morale, consider your approach to HR strategy and how you can manage human capital in your business.

What Is Human Capital Management?

The role of effective HR departments has changed in recent years, and it continues to evolve to address the needs and expectations of a rapidly changing workforce. To meet these needs, human capital management has emerged. HCM is a set of processes and tools that help businesses maximize employee performance and productivity by combining workforce recruiting, management, and optimization.

Human capital management systems were initially developed and targeted for large companies. As more small businesses have looked to adopt similar, cost-effective tools catered to their needs, HCM technology has evolved to scale and help businesses of all sizes.

The Importance of Human Capital Management

A business's greatest asset is its employees. HCM encompasses the processes and systems that can help the organization understand its workforce, meet its needs, and make a lasting and positive impact on the business. An end-to-end HCM strategy, supported by the latest in flexible and integrated HR technology, helps form the basis of a high-performance workplace culture. The importance of human capital management lies in its ability to help businesses take a strategic approach to essential employment-related matters such as:

• Identifying the right talent during the recruiting process: Effective HCM technology can bolster a business's recruiting efforts by helping them identify positions that need to be filled, create compelling job descriptions, and use an applicant tracking system to help streamline and manage each step of the hiring process.
• Employee development and career pathing: Performance management features help businesses create an effective leadership pipeline, manage staff reviews, and develop ongoing training and performance management plans to help everyone excel. Identifying potential leaders can also help build a culture of promoting from within and capture the total value of a business's investments in employee development and growth.
• Employee engagement and retention: HR technology can help in streamlining the onboarding process, clearly defining the measures you'll use to evaluate an employee for regular performance reviews, measuring engagement levels on an ongoing basis, and helping employees understand how the business vision, culture, and goals influence their day-to-day contributions.
• Productivity boost: Flexible, cloud-based HCM systems allow employees to work wherever they need to. Not only could this empower a business's current workforce to be more productive, but it may also allow the business to gain a competitive advantage by accommodating a geographically diverse staff. It can open the candidate pool to individuals who don't live near a physical office or worksite.
• Training employees: A vital part of the talent management process and overall employee engagement is providing job-specific, leadership-focused, or other necessary training. HCM technology can help streamline learning and development activities, monitor progress, and uncover long-term opportunities for your team to grow and develop.

How To Improve Human Capital Management

When looking for ways to improve human capital management, consider how HR teams can prioritize and augment the employee experience and drive organizational effectiveness and overall business strategy. Human capital management strategies may include:

Building Employee Profiles

HCM software typically operates with a single employee record, where each employee's data is securely gathered and stored in one central location. Whether it's an employee's training schedule, previous performance review, or other personnel information, employee data is shared between various solutions within the same platform, helping to facilitate greater accuracy and time savings. The task of tediously rekeying data into disparate HR systems is essentially eliminated.

Conducting Data-Backed Performance Reviews

Careful planning and following performance review best practices can help your employees feel like valued team members and encourage them to be more committed to engaging in the process. Some key steps in the performance review process include reviewing the employee's job description, reassessing how key performance indicators (KPIs) are measured, reviewing the employee's goals, and gathering performance data (customer feedback, internal employee questionnaires, training records, etc.). An effective HCM system can help managers carefully plan and organize these critical discussions, allowing them to locate and access employee-specific information to guide these conversations easily.

Improving an Internal Communications Strategy

HCM technology can help improve communications with employees about critical issues or during times of change. Employees may express hesitancy or fear during annual reviews, open enrollment, benefits changes, layoffs, and other significant periods that impact them. With HR data and technology systems, it's possible to communicate with employees in their preferred format and monitor for instances where additional support might be needed.

Prioritizing the Employee Experience

Investments in HCM may directly improve the employee experience. When you increase the flexibility and customization of an employee's experience, you can capitalize on several opportunities. Here are some examples:

• HCM technology that makes new hires' recruiting and onboarding process easy and intuitive can help the business make a great first impression and demonstrate its commitment to the employee experience.
• Self-service capabilities make it easier for workers to update information without going to HR.
• Mobile and online time entry can simplify submitting time and attendance data, particularly if you have employees working across locations, in hybrid work setups, or working from home.

Empowering Management

An HCM strategy's success hinges on manager and employee buy-in. Getting your managers on board starts with providing the support and resources needed to ensure they understand it and making the strategy tangible enough that it impacts day-to-day operations. Taking the time and effort to get everyone on board throughout the organization can help set the stage for the success of your strategy and the benefits it can provide your business.

One approach that may help you successfully improve HCM adoption throughout the organization and secure management buy-in is to create impact statements and goals that show specific benefits for each department. Maybe a department is struggling with low productivity, or a team can't fill vacant positions. Whatever the challenges are, showing managers how HCM can provide a pathway to a specific solution for them may increase engagement levels.

Improving Human Capital With Flexible HCM Solutions

Innovative human resource management requires the right strategy, processes, and technologies to address a company's unique needs. If you want to evaluate your HR strategy or improve human capital systems, look for an HR provider to help you develop a more effective workforce management program.