Over the last few years, Human Resources teams have seen more change than they’ve had in decades. The modern workplace is now hybrid, with a focus on technology, collaboration, and productivity.
To stay up to date with these new workplace transformations, organizations need modern tools that put emphasis on the “people” part of Human Resources. That’s where Human Capital Management (HCM) technology comes in…
HCM software helps businesses streamline their HR processes, increase efficiency, and reduce costs while improving the overall employee experience. This article covers what HCM is, why it’s important for today’s businesses, and its benefits.
Let’s get started!
What is Human Capital Management?
There are several ways to define Human Capital Management. First, HCM involves a set of practices for recruiting and managing employees. It’s an approach HR functions take to invest in the people within an organization to improve employee engagement.
Human Capital Management also refers to a type of HR software that companies use to manage the hiring, onboarding, and development of their workforces. Basically, all the core HR functions of a company.
Human Capital Management (HCM) vs. Human Resource Information System (HRIS) vs. Human Resource Management System (HRMS)
Human Capital Management (HCM) software is also referred to as Human Resource Information System (HRIS) or Human Resource Management System (HRMS).
Let’s break it down a little further…
HCM software typically handles HR processes that maximize the value of employees. A Human Resources Information System manages data on an individual vs. the entire workforce, and Human Resources Management System is a robust suite of HR software features.
Some of the most widely-used HCM software vendors include Workday, Oracle JD Edwards, UKG, SAP, Microsoft Dynamics 365 and Infor Lawson.
Why Do Organizations Need Human Capital Management?
Human Capital Management is vital for companies in this competitive market. Why? Because it’s about nurturing your biggest investment—your people. Implementing an HCM strategy and technology boosts employee productivity, creativity, and passion—all of which have an impact on the bottom line. Companies that lack HCM processes can experience more turnover, high labor costs, and loss of revenue.
Core Components of HCM Software
Human Capital Management software comprises a broad range of HR processes, including…
Talent Management
This component encompasses recruiting and onboarding, performance management, compensation, succession planning, as well as learning and development. Everything your HR professionals need for the entire employee lifecycle from hire to retire.
For example, businesses can create job postings, track applications, and screen candidates. Once a candidate is selected, the software can assist with onboarding, which involves setting up new employees with the necessary tools, training, and resources to succeed in their roles.
Workforce Management
This includes the functions for assigning employees with the right skills to the right jobs, departments, and functions. It also includes time and attendance management, workforce planning, budgeting, and scheduling.
Benefits Administration
With the benefits administration component, you can automate the processes of managing your workforce benefits. For example, you can set up your benefit plans, drive enrollment, and deductions throughout the HCM system.
Performance Management
Performance management is another area where HCM software can be beneficial. HCM software can automate the performance review process, allowing managers to provide feedback and set goals for their employees. This can lead to improved employee engagement, increased productivity, and better retention rates.
Training and Career Development
HCM software can help organizations create and deliver training programs, track employee progress, and identify areas where employees need additional support or development.
Offboarding
HCM software can also assist with offboarding, which involves managing the departure of employees. Human Capital Management can help businesses comply with legal requirements, such as conducting exit interviews and processing final paychecks.
Employee Self-Service
Human Capital Management delivers a wide range of self-service applications for time and attendance, HR help desks, vacation requests, and many more employee self-service and manager self-service features.
Reporting
HCM solutions come with many different reporting and analytics features. Keep track of employee data such as performance reviews, benefit claims, skills, and other data that help improve the work environment and increase workforce productivity and engagement.
Benefits of Human Capital Management
One of the main benefits of Human Capital Management software is the ability to automate many HR processes, such as tracking employee attendance, managing benefits and compensation, and conducting performance reviews. This automation not only saves time but also reduces the risk of human error, which can lead to costly mistakes and legal issues.
Here are a few other benefits of Human Capital Management software for you…
- Motivate team members: With a more personalized and self-service experience for the HR function, you can keep talented employees motivated and retain employees.
- Maintain compliance regulations: Ever-changing regulations and policies can be hard to keep up with. Human Capital Management software can help you comply with all the regulations in the HR space.
- Build a data-driven organization: By centralizing data and employee records, and implementing analytics, your company can make more intelligent workforce decisions.
Cloud-Based HCM Software
Gartner predicts that by 2025 more than half (60%) of global mid-market and large enterprises will have invested in a cloud-based HCM suite. We see many companies of all sizes adopting more cloud-based solutions, so it’s no surprise that HCM would follow suit.
Cloud-based HCM software provides companies with scalability and enhanced data security. They also integrate with other business software like enterprise resource planning (ERP) to deliver a unified solution that increases business value.
Getting Started With Human Capital Management Software
If you’re ready to improve workforce management for your organization, Human Capital Management software is the perfect solution!
Human Capital Management software is a valuable tool for businesses looking to manage their employees more efficiently and effectively. And, by automating many HR responsibilities and providing a centralized platform for managing employee data, HCM software can help businesses reduce costs, improve productivity, and enhance the overall employee experience.
What more could you ask for, right?
How Can We Help?
At Surety Systems, our consulting team believes that implementations go beyond system configurations. We’ll partner with you to build a transition roadmap and not only help you deploy the right solution but ensure it’s successful for years to come.
Our senior-level HCM consultants have decades of experience with the most popular HCM solutions, including Workday, JD Edwards, UKG, SAP, Microsoft Dynamics, and Infor Lawson.
Contact our experts today to learn how we can craft a Human Capital Management strategy to fit your company’s project needs and core business objectives!
