What is Human Capital Management and why should I care about it?
Per Gartner’s IT Glossary it is defined as;
Human capital management (HCM) is a set of practices related to people resource management. These practices are focused on the organizational need to provide specific competencies and are implemented in three categories: workforce acquisition, workforce management and workforce optimization.
The applications that help to enable human capital management include:
· Personnel administration
· Benefits administration
· Payroll
· Portal/employee self-service
· Service center
· Workforce planning
· Competency management
· Performance management
· Compensation planning and strategy
· Time and expense management
· Learning (education and training)
· Recruitment (hiring and recruitment)
· Onboarding
· Contingent workforce management
· Organization visualization
· Reporting and analytics (workforce analytics)
· Workflow Management
An organization that supports HCM provides employees with clearly defined and consistently communicated performance expectations. Better yet an easy manner to collect, review and score the performance projections. Managers are responsible for administering select performance and output initiative. Employees are accountable for achieving specific business goals, creating innovation and supporting continuous improvement.
In the back office, HCM is either a component of an enterprise resource planning (ERP) system or a separate suite that is typically integrated with the ERP. In recent years, the term HCM system has begun to displace human resource management system (HRMS) and HR system as an umbrella term for integrated software for both employee records and talent management processes. The records component provides managers with the information they need to make decisions that are based on strategic information and not just data. Talent management can include dedicated modules for recruitment, performance management, learning, and compensation management, and other applications related to attracting, developing and retaining employees.
Sounds great but again why should I care about it?
Well think of your business or organizations core purpose. You may sell a unique product or service to the masses. However your employees are your most vital asset. How do you manage head count and score productivity? Can you easily data mine your organization and pull metrics on a daily, monthly or annual basis? Perhaps you have vast amounts of employee data, but can you pull critical information when needed? HCM is an ideology of rethinking how you administer all of those employees to achieve your core business processes.
I have clients that acquire new organizations and change their staffing models every few years. The clients that use a centralized HCM system can maneuver rather easily with those types of changes. The road map to using your HCM system does not begin with simply purchasing a great software package. It begins with understanding the whole picture view. Having the ability to understand how your core business initiative s are uplifted by more efficient processes tracked through the use of technology. Not purchasing the hottest and latest technology w/out understanding if it is truly a value add.
Your HCM system should have the abilities to scale up and down with your business. Your support staff should have proper training and education on how to maximize that systems processes and automated functions. Ask yourself this question – are you maximizing your current HCM and/or ERP, HR or Payroll Systems? How do you know what are the metrics that validate that answer? Productivity Efficiencies, Cost reductions, labor re-allocation are all valid reasons why you should care about HCM.
References:
http://www.gartner.com/it-glossary/hcm-human-capital-management/