By understanding the key features, functions, and capabilities of Human Capital Management (HCM) technology, organizations of all sizes and industries can build a well-defined business strategy that helps streamline processes, increase efficiency, improve employee experiences, and create better business value across the board.
Read on to learn more about the role of HCM technology in maximizing the efficiency, productivity, and performance of your core Human Resources functions, as well as where our team of senior-level HCM consultants can fit in your organization.
What is Human Capital Management (HCM) Technology?
Human Capital Management (HCM) technology is a comprehensive software solution designed to help organizations manage employee data more efficiently, optimize talent lifecycles from hire to retire, and enhance employee engagement and performance over time. HCM technology enables companies to effectively manage, empower, and maximize the potential of their workforce.
HCM vs HRIS vs HRMS – What’s the Difference?
HRIS helps HR professionals and teams manage and optimize core HR operations, HCM offers greater visibility into workforce productivity across the entire enterprise, and HRMS oversees the collection and management of employee information across teams.
And, while HCM, HRIS, and HRMS solutions are all designed to help organizations improve process efficiency, enhance employee engagement, and achieve business goals, there are differences worth noting…
What is HCM?
HCM technology offers a comprehensive suite of tools designed to help businesses in managing their employees from recruitment to retirement, including recruiting and onboarding, benefits administration, talent management, and time and attendance management.
Human Capital Management solutions place an emphasis on building a business strategy that helps manage people and data more efficiently, making it easier for companies to keep their employees supported, engaged, and productive.
What is HRIS?
While HCM offers a more comprehensive system and enterprise-level human capital management capabilities, Human Resource Information Systems (HRIS) offer more basic functionality, helping employees reduce complexity within their systems and keep better track of employee records.
HRIS solutions focus primarily on managing employee information and automating administrative HR tasks, including payroll, benefits administration, and time and attendance tracking, to support employees on a more basic level.
What is HRMS?
Human Resource Management Systems (HRMS) offer the tools and resources needed to help companies streamline and automate core HR operations, manage people-related activities, and implement best practices across the entire enterprise.
While HCM provides a way for companies to expand beyond basic HR practices to optimize the potential of their employees, HRMS remains focused on helping users manage, maintain, and optimize the HR functions that make up the backbone of their organization for better process efficiency and less administrative burden for key stakeholders.
Key Components of HCM Technology
By understanding the main components that make up the foundation of HCM technology solutions, organizations can more accurately assess their current needs and make informed decisions when selecting the right solution for their workforce.
Here are the core components of human capital management technology…
- Recruiting and Onboarding
- Time and Attendance Management
- Benefits and Retirement Services
- Talent and Performance Management
- Reporting and Analytics
- Employee Self-Service Tools
- Workforce Management and Optimization
Main Advantages of HCM Technology
HCM Technology offers a range of advantages to organizations, including…
- Reduced time to hire for new employees
- Extended employee tenure and higher retention rates
- Enhanced employee productivity and engagement across the employee lifecycle
- Automation and optimization of core HR functions and tasks
- Improved data accuracy and timeliness for better decisions
- Increased accuracy in employee performance reviews
- Centralized database for better organization and streamlined operations
HCM technology provides real-time access to employee data to help companies optimize business strategies and make more informed staffing, management, and optimization decisions. By leveraging the benefits of HCM technology, organizations can workforce management operations, increase efficiency, and maximize business value in the long run.
Let’s take a closer look at a few of the most important advantages of advanced HCM solutions…
1) Improved Employee Engagement and Retention
HR leaders can leverage tools like talent reviews, compensation incentives, and rewards to ensure they are engaging and retaining their employees in a way that maximizes business performance and value across the board.
Talent reviews allow HR leaders to better understand their employees’ capabilities, while compensation and rewards provide opportunities for better engagement and performance by recognizing, incentivizing, and rewarding employees for their work.
2) Streamlined Operations
HCM technology helps streamline operations by leveraging advanced technologies such as Artificial Intelligence (AI) and chatbots to automate workflows, enabling HR teams to focus on strategic initiatives to save time and money and maximize business value.
With HCM technology, businesses have the ability to easily manage and assess their workforce, access accurate and timely insights into employee performance, and achieve greater operational efficiency and cost savings across the enterprise.
3) Increased Efficiency
Advanced analytics capabilities, such as predictive analytics and AI, can help organizations leverage real-time data and analytics to make better decisions.
By leveraging functional HCM technology, companies can integrate HCM functions with applicable legal requirements and automated compliance reporting tools to simplify compliance for all employees across the entire organization.
Challenges of Implementing HCM Technology
From navigating a complicated vendor selection process to dealing with limited budgets or quick turnaround times, encouraging user adoption for the new software, providing adequate support for employees, and more, implementing a new HCM technology solution can present quite a few challenges if you’re not adequately prepared.
Here are a few of the most common challenges associated with new HCM technology…
Cost and Complexity
HCM solutions are often expensive and require significant resources to implement and maintain, making the process of selecting and implementing them a daunting task, especially without the right personnel and resources for the job.
And, the process of integrating the system with existing hardware and software to ensure the data is secure can be time-consuming and expensive, so it’s important to consider the burden of implementing new HCM technology and choose the right solution for your organization’s needs from the start.
Employee data is a valuable asset in any organization, so ensuring it is secure and compliant with regulations can be critical in successfully implementing new HCM technology.
An HCM system must include authentication protocols to ensure that only authorized users have access to the data and keep data secure and protected from potential threats.
Organizations leveraging HCM technology solutions must have well-defined strategies in place to maintain compliance with regulations and strategic business objectives and manage their most valuable data in the most efficient and effective way possible.
How to Choose the Right HCM Technology for Your Organization
Choosing the right HCM technology for your organization is essential in maximizing the success of your implementation project and setting your employees up for improved productivity, performance, and engagement in the long run.
When selecting HCM technology, there are a few key aspects to consider, including…
- Multi-vendor selection
- Project budgets
- Integrations with other solutions
- Regulatory requirements
- Compliance with pay rules
- Business goals and objectives
Let’s take a closer look at the key steps involved in choosing the right solution for your needs…
1) Assess Your Needs
When selecting the most appropriate HCM technology for an organization, it is essential to evaluate HR requirements and ensure their compatibility with the services provided by an HCM technology provider to offer the right level of technological support for employees and their day-to-day operations.
Companies should also consider both the current and future needs of their organization, identify any existing pain points or areas of improvement, and assess the ability of services offered by potential HCM solutions providers to meet their needs.
Once needs have been defined and addressed, business leaders should evaluate HR technologies based on cost, scalability, user experience, and compatibility with existing systems to determine the most suitable solution for their needs.
2) Research Solutions
Once the needs of the organization have been assessed, potential solutions must be researched to determine the best fit. Key stakeholders should research potential vendors, compare their offerings, create a shortlist of contenders, evaluate their demos, and negotiate contracts.
Businesses should consider the range of current and potential HCM capabilities offered by each provider, leveraging existing resources and exploring new innovations to gain insights into the tools available to offer businesses the most advantageous business strategies.
3) Partner with an Implementation Consultant
Whether your organization decides on Workday HCM, UKG Dimensions, SuccessFactors Employee Central, or any other cloud-based HCM solution, leveraging the knowledge, expertise, and support of an experienced HCM consultant can make all the difference.
From helping your project team organize and negotiate contracts with the vendor to outlining plans for a successful implementation, offering training support for employees, and everything in between, third-party HCM consultants are guaranteed to help choose the best technology for your needs and optimize your core HR functions in the long run.
How Can We Help?
Whether you need help implementing a new HCM technology across teams, an extra hand navigating complicated integrations between your HCM solution and other business systems, or additional support educating and training employees on the new technology, Surety Systems is here to help.
Our team of senior-level HCM consultants has the technical skills and functional expertise needed to lead you to success, regardless of the complexity of your organizational structure or the nature of your project needs.
Getting Started with Us
Interested in learning how your company can leverage a unique HCM solution to improve productivity and engagement across teams? Ready to get started on an HCM implementation, integration, or upgrade project with our team of expert consultants? Contact us today for more information about our HCM consulting services!