What is Human Capital Management (HCM)? – Forbes Advisor
Human capital management is an important system in any organization and for good reason.
Not only does HCM help organizations meet labor demands, it ensures that employees can maximize their potential through recruitment, onboarding, development, and retention activities. Once you have the right systems in place, you can create an environment where employees are productive and stay with the organization for the long term.
Let’s look at some of the benefits of human capital management.
Create a better human resource management system
HCMs improve workforce management by ensuring alignment between your organization’s structure, business strategy, and goals. They also help talent departments identify workforce needs in terms of training, development, and compensation to reduce turnover.
Improve the recruitment process
Another benefit of HCMs is that they encourage you to seek out and find top talent through smart software, social media, and employee referral programs. Hiring managers can manage large numbers of applicants and track each applicant’s status in the hiring process. Plus, having a thorough onboarding process and training program helps you give new employees a head start.
If you’re struggling to juggle it all, you can use the best recruiting software and applicant tracking systems to streamline the recruiting process.
Identify talent gaps
HCM identifies workforce needs and talent gaps against the organization’s business strategy. If a company needs people with a particular skill set, it helps you create a plan to find talent and calculate costs up front. You can also initiate programs to enrich the skill sets of your current employees to fill in the gaps of this missing expertise.
Increase employee retention
HCM allows employers to identify what employees want. It can identify opportunities and benefits that employees want through performance reviews, survey forms, and other feedback sources. Knowing the needs of your workforce can help you achieve better results and identify key areas for improvement, which is necessary for business growth.
Increase return on investment (ROI)
As with any business decision, it’s important to consider return on investment when hiring and compensating employees. While employees can accomplish their basic tasks, you can improve their results by motivating them to perform better.
Good advice is to invest in growth opportunities, bonuses and additional financial incentives. Alternatively, you can create a collaborative culture where employees feel valued and appreciated. Research of 200,000 managers and employees found that 79% of people who leave jobs cite lack of appreciation as a major reason for leaving.