The Role of Human Resources in Human Capital Management

By Marianne Chrisos - Last Updated on November 4, 2019
The Role of Human Resources in Human Capital Management

If human resources are the team that helps hire, support, and train the employees at an organization, human capital management, or HCM, is the strategic system or processes that make the work of HR possible.

What is the relationship between HR and human capital management?

So while human capital management may be driven and executed mostly by HR professionals, it’s a system that can affect an entire business. Some of the things that HCM gives structure to include:

Over 40% of HR professionals define human capital management as “taking a strategic approach to managing one’s people beyond core administrative functions, resulting in workforce optimization.” The strategy is no longer confined to sales and finance departments – strategy is now central to human resources in helping to attract and retain the right people and helps elevate the purpose and work of HR beyond just administration.

Putting HCM to work for your HR team

So while HR is where the work lives, HCM is the process that helps drive it forward and make more of an impact at every level of business. The role of HR professionals, then, is to find the best HCM solutions that enable them to create and execute the best strategies and elevate the work and performance of every employee.

Here’s what that might look like.

1. Have a conversation with leadership

For HR teams that are looking to change the HR conversation, it’s important to get leadership and management on board. It’s important to present the research and explain that while the definition of HR hasn’t changed much lately, the way that businesses are reaching their HR goals has changed in part due to HCM capabilities. Explaining that HCM can bring more efficiency and streamline capabilities is one important piece of data to highlight, and organizations should also make mention of the fact that bringing disparate HR functions into one overarching HCM strategy can help businesses gather and analyze more data that will help drive better decision-making business-wide.

2. Decide on technology

Good HCM is built on the foundation of the right software or HCM program. Using your information or technology management teams to help HR manage the process of finding the right HCM technology fit is a good use of resources, as the best HR solutions work as part of a larger enterprise system meant to optimize and centralize company operations. The right HCM solution will depend on the needs, budget, and capabilities of your business teams, but many human capital management software packages include features that allow businesses to recruit and hire, train and onboard, and run performance reviews of employees, as well as streamline administration features like payroll and benefits administration.

3. Use the data that technology affords you

Using an HCM technology tool will grand your business access to more centralized data. Data analysis helps your business understand patterns and trends, ultimately helping you find ways to make your business faster, smarter, or better in some way. While you may not see instant results from HCM, over time the technology you use should allow you to gather and organize enough data to shape your strategy in a way that grows your business.

The best results from employing human capital management systems happen when HR teams are engaged with and believe in the purpose and long-term goals of HCM. They want to drive employee engagement throughout the whole organization and are passionate and purposeful about growing a business through a dynamic workforce.

Human capital management isn’t instrumental or even possible without the support and work from HR professionals. Modern workplaces require more than just paperwork filers and compliance officers, but HR executives and teams who want to build a better business through the power of combining data, community, and conversation.

Marianne Chrisos

Marianne Chrisos | Born in Salem, Massachusetts, growing up outside of Chicago, Illinois, and currently living near Dallas, Texas, Marianne is a content writer at a company near Dallas and contributing writer around the internet. She earned her master's degree in Writing and Publishing from DePaul University in Chicago and has worked in publishing, advertising, digital marketing, and content strategy.

Marianne Chrisos

Marianne Chrisos | Born in Salem, Massachusetts, growing up outside of Chicago, Illinois, and currently living near Dallas, Texas, Marianne is a content writer at a c...

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