Human Capital Management (HCM)

What Is Human Capital Management?

Human capital management is how a business manages, hires, and utilizes its workforce.

HCM encompasses both tactical and strategic operations. This comprises routines that will aid human resources in effectively supporting, developing, growing, and managing personnel.

Human capital management is grouped into three different categories:

• Discovering and employing the right talent
• Staff management
• Improving the workforce by introducing techniques, materials, and assistance an employee needs to function effectively.

Importance Of Human Capital Management 

• Using human capital management can help your company find and entice qualified candidates.
• Using human capital management can help you retain the best employees.
• Human capital management can make employees feel valued and supported, as well as drive engagement across the company.
• Using human capital management can help discover and provide the right tools for your employees, which in turn leads to an increase in productivity. 

Functions Of Human Capital Management

• Interview process
• Staffing
• Onboarding
• Workplace planning
• Sourcing
• Workflow management 
• Training and development 
• Payroll 
• Time and attendance 
• Compensation planning 
• Compliance 

What Differentiates Human Capital Management From Human Resources Management?

Human resource management (HRM) is an administrative system used in managing employees. For instance, these systems involve processing payroll, administering benefits, or managing personnel data.

These management systems fall under HCM. However, the term "HCM" encompasses a wider range of more strategic programs aimed at fostering and maximizing top talents.

Conclusion

Human capital management software are tools that aid operations across all Human Resources tasks, starting from hiring to the retiring of employees. Human capital management software works in hand with human resources management software.