Human Capital Management (HCM)
The work-worker-workplace relationship has dynamics that demand companies to look closely at the processes of their people to stay competitive. Human capital management (HCM) is a term used by organizations to cover talent acquisition, talent management, and talent optimization. HCM covers these three stages throughout the life cycle of an employee.
The three core human capital management aspects are:
Talent acquisition: Begins with recruitment and continues through the candidate journey and hiring process
Talent management: Oversees payroll, time and attendance, culture connect, and performance management
Talent optimization: Includes competency mapping, career-pathing, learning and development, and succession planning
HCM is comprised of both strategic and administrative functions and includes workflows that allow managers and human resource teams to better grow, support, manage, and develop talent.
The term human capital management is sometimes used interchangeably with human capital management software.
To build and effectively manage human capital, companies can do the following:
Hire the most qualified candidates for open positions.
Regularly monitor the performance of employees, and watch for optimization opportunities that will benefit the employee and the company.
Use continuing education and ongoing training to enhance the skills of employees at all levels of the organization.
Retain valuable employees with competitive pay, benefits, and incentives.
Human Resource Management (HRM)
Human Capital Management (HCM) Software
takes care of many of the functions and processes needed to effectively manage a workforce. HCM software is focused on human capital, which is the seat of knowledge, experience, and skills employees have accumulated over the course of their lifetimes.
Human Resource Information Systems (HRIS)
are primarily used to manage existing employees, but some HRISs also have applicant tracking and recruiting tools.