The concept of human capital management continues to grow and shape modern human resource practices. As more and more businesses develop HCM practices for their organizations and begin to adopt HCM-ready software solutions, it’s important to keep these human capital management principles in mind for your organization to get the most of your HCM.
The most important human capital management principles for your business
Make sure your human capital management plan includes these principles.
1. Workforce planning
Workforce planning has come a long way. HCM makes it possible for businesses to use data to help better predict work patterns and labor needs to make sure that staffing is handled efficiently. HR managers are no longer forced to guess about possible peak activity times to plan for or having to scramble around the last minute to find temporary workers or add to an existing team. HCM gives HR teams the ability to approach workforce planning more systematically – making all HR professionals breathe a little easier and likely feel more positively about their roles.
2. Performance management
No matter what kind of industry your business resides in, tracking employee performance is a crucial component of HR operations and an essential principle of HCM. HCM gives managers the ability to use real data metrics to track employee progress and performance, similar to the way that marketers can track the success of digital marketing campaigns.
Related to performance management, effective HCM allows you to build a strategic compensation approach. This can help boost company morale, as it helps employees know what to expect. If compensation is related to goals, building this strategy out with HCM can lead to more productivity and allow employees to track their progress along with their managers to help better align overall business unit goals.
4. Time tracking
Another important human capital management principle is related to time management, including clocking in and out and submitting paid time off requests. Building time management into your human capital management strategy makes sense because it not only gives HR teams a plethora of data to draw from and use to make employee planning and workforce decisions, but it also can streamline payroll and benefits administration when it’s all part of the same system.
5. Development and training
Development is key to employee engagement. When it’s built into HCM strategy and highlighted as a human capital management principle, development becomes both more accessible and more relevant. Employee performance reviews, as well as integrated feedback systems, allow for employers to better understand what employees are interested in learning, as well as what the business needs are so that employees can be prepped for career growth and be equipped to carry additional work responsibilities.
6. Recruitment and retention
Recruitment and retention go hand in hand. It’s not enough to find and hire great people – it’s important that businesses find ways to keep them. Losing employees to turnover is not only time consuming for HR departments to fill the position again, but it’s also a loss of productivity for the whole organization. HCM programs have the ability to match employers with better fits for employment earlier in the process, making their hires more likely to succeed. They also enable better employee feedback so that companies can make adjustments to help grow engagement and therefore retention.
HCM systems allow businesses to be both more organized and more flexible. Sanjay Sathe, president, and CEO of RiseSmart told Business News Daily that HCM is an important investment to businesses because “Keeping employees happy and engaged in your company now depends very heavily on how you approach the entire employee life cycle.”
By using these human capital management principles guide your HR efforts and build your HCM foundation, you could revolutionize your HR efforts and create a more productive operation that can lead to better employee support and development.