If you've ever asked "What is HCM?" or "What does human capital management really mean?" you're not alone. It's a critical part of the broader HR discussion that's happening today, and yet many organizations struggle to truly define it.
According to recent Paychex research, 43 percent of survey respondents pinpointed the strategic aspect of HCM, and indicated that they define the term as taking a strategic approach to managing one's people beyond core administrative functions, resulting in workforce optimization. With this definition in mind, how can HR leaders implement these strategies into their own workflow?
Moving Beyond Administrative Functions
HR typically takes care of a number of administrative functions, from processing job applications to ensuring that payroll and benefits are effectively administered. However, moving beyond a basic administrative function is an important part of embracing a fully formed human capital management strategy, ensuring that you're optimizing your workforce's ability to deliver on your larger business goals.
Often, this begins with a mindset change about the way HR operates and fits into your organization. While smooth administration is part of the HR department's role, it's just the beginning. Consider how integrated HR is into the company's overall decision-making and operations. How often are your managers connecting with executives and business units to understand key needs? Are employees happy with the levels of support, development, and training they're receiving? Does your long-term plan focus on helping your business meet its long-term objectives? If the answers don't fit with your vision of "What is HCM?" it's important to ask hard questions and determine how to get the most out of your organization.
Putting a Human Capital Management Strategy in Place
If you're committed to moving beyond core administrative functions and investing in workforce optimization, there are several key places to start:
- Align HR with organizational goals: Human capital management is all about optimizing the way your company leverages staff as its most critical resource. How aligned is your HR strategy with your organizational goals? For example, if your company plans to expand overseas, it's important to cultivate the HR capabilities to deliver on that vision. From the right technologies to sourcing strategies for talents in key markets, it’s important to tie HR investments and efforts back to your company's most important goals.
- Invest in technology: For today's human resources departments to remain agile and focused, the right technological foundation is a must. Whether it's delivering on the integrated, multi-platform experience that allows employees to access their information from any device, or data-focused tools that make compliance reporting possible, technology helps streamline an HCM strategy rollout. The leading HR systems are part of one larger system that helps optimize your company's operations from end to end.
- Make decisions based on data: The most important decisions your business makes need to be informed by data, and that often starts with understanding your people. The right technology systems, from time and attendance to benefits enrollment, make it easy to audit any of your company's information from a single dashboard. Immediate access to your firm's information allows managers and employees to make the best decisions possible, no matter what they're working on.
When HR leaders have a shared definition of HCM, it's possible to really focus on moving beyond human resources administrative functions and optimizing the workforce's performance. Begin with ensuring that your efforts align to the company's larger goals, and then develop the technology platforms and data strategies to help make this a reality.