Human Capital Management: Definition, Importance & Benefits

Human capital management (HCM) is a combination of processes & solutions that organizations, typically HR departments, use to strategically manage employee functions and values. 

What is the definition of Human Capital Management (HCM)

Employees are a crucial asset to any organization. And like other company assets, a strategic process leads to success. That is what Human Capital Management is for, and that is why Human Capital Management (HCM) Software is crucial.

Types of Human Capital Management Processes

Human capital management covers a variety of functions and strategic processes for your business. Some of the standard, routine processes and responsibilities of Human Capital Management include:

• Recruitment
• HR Administration
• Onboarding
• Leave Management
• Time & Labor 
• Compensation Management
• Performance Management
• Benefits Administration
• Talent Acquisition
• Scheduling
• Analytics
• Attestation
• Compliance
• Payroll

The benefit of an HCM Software platform is that businesses can automate a lot of these routine tasks and processes, saving them valuable time and ultimately money. Additionally, companies can better manage their compliance and employee information by keeping all their workforce data in one central location. 

why is Human Capital Management Important?

A strong human capital management strategy can make a significant impact on an organization's bottom-line success. HCM improves workforce productivity, employee engagement, and even saved costs by:

• Putting the right person in the right position
• Increasing workforce retention rates
• Creating standardized processes & procedures
• Growing your talent & fostering their strengths

Devoting your organization's time and focus on high-value HCM strategies will keep your workforce running smoothly. By equipping your HR team with a strong HCM toolbox, they can focus on less time with inefficiencies and more time investing in your employees. 

What is an HCM Software Platform?

Human Capital Management Technology allows organizations to optimize and scale their HCM strategies. By automating HCM, organizations create efficient processes to manage a diverse workforce in an intuitive, impactful way—all while controlling labor costs and lowering compliance risk. The result? More time spent engaging with your teams to achieve business goals. 

Benefits of HCM Software

Some of the benefits of using a single HCM solution include:

• Increased efficiency with configurable workflows and customizable notifications and alerts
• Better accuracy of employee withholdings with automated tax table updates
• Employees who are empowered through a mobile app and self-service tools that reduce administrative tasks
• Simpler time and labor management such as fixing missed punches and early/late arrivals, in real-time, as well as access to view real-time data and insight from anywhere on any device
• Better insight via real-time, highly configurable, ad-hoc reporting— standard prebuilt reports included
• A greener footprint for your business through paperless processes 
• Strong compliance with a powerful tool that keeps you updated and in the know 
• And much more...

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