Running a business is a major responsibility. Not only do you have to account for every dollar and ensure you are not losing money anytime you make a new decision. You also must be confident that your employees are performing their duties to the best of their abilities.
Indeed, keeping track of all your employees can be a difficult task, especially as your business grows. That is where human capital management (HCM) software comes in.
Sometimes known as human resources information system software (HRIS) or human resources management software (HRMS), this technology helps employers manage and look after their most integral employees.
An analysis of HCM software can help illustrate how businesses can use it to optimize time and expenses. This is everything you should know:
What Is Human Capital?
When a business owner creates a balance sheet, they list their assets at the very top. A company’s assets include cash, inventory, receivables, real estate and many other concrete items that carry inherent value. These are all tangible assets, meaning that they are physical and can be measured. In other words, the amount of inventory that a company has can be represented by its monetary value.
Human capital is different. It is an intangible asset and cannot be readily measured simply by counting it. It may refer to assets such as education, training, skills, loyalty and anything else an employee has to offer a company. Human capital would not be listed on a balance sheet because you cannot assign a precise monetary value to something as meaningful but abstract as loyalty. However, the more a business invests in its employees (or human capital) by providing adequate education, training and other resources, the more profitable the company will be in the long term.
What Is Human Capital Management?
Often overseen by a company’s human resources department, human capital management (or HCM) is the practice of acquiring, managing and optimizing a company’s workforce or human capital.
While this may seem like just a complicated way of describing training new employees or giving employees options to further their education, human capital management is so much more than that. Human capital management can also include creating an engaging and inclusive workplace culture across the organization.
Keeping employees happy and engaged is extremely important for the success of a company. In fact, companies that made employee engagement a top priority were shown to have 21% greater profitability. This is because the employees who are passionate about their work and feel valued for what they do not only put more effort into their work, they are also less likely to leave the organization. As a result, companies can retain high-quality employees longer.
What Is Human Capital Management Software?
One of the best ways a company can optimize its human capital management is by adopting efficient software. Human capital management software solutions combine talent acquisition, planning, management and analytics in a single system and remove the need for manual processes.
Some of the key features of human capital management software include:
- Talent Acquisition
Bringing in new employees is one of the most important aspects of human capital management software. The system makes it easier than ever to craft job postings that advertise open positions, which in turn attracts highly qualified candidates. The software can then help identify the best candidates for the company’s needs.
Once a hire has been made, the company must work hard to onboard the new employee to ensure that they transition seamlessly into their everyday responsibilities. With human capital management software, a company can create employee records, request reference information and generate templates for important contracts.
- Workforce Planning
Companies can identify and analyze their current workforce to get a better idea of what their current teams look like and how they should strategize growing the team. That way, they can focus their hiring efforts on seeking out talent that will help complete various teams.
- Performance Management
With human capital management software, companies can easily store employee performance reviews, feedback, scoring and future objectives under a performance management module.
- Compensation Planning
Companies can track and evaluate employees’ salaries and benefits data through human capital management software. This is useful because a company can analyze their compensation spend to ensure that they are paying appropriately while still staying true to their budget.
- Time and Attendance
With this software, employers can watch employees’ attendance and productivity without waiting around for employees to submit complicated time sheets that often end up getting lost in a shuffle of paperwork.
- Workforce Analytics
Companies can see and analyze reports that gauge metrics such as employee turnover, recruitment spends and employee performance by department.
Specifics of HCM Software
Of course, many companies would want to know how HCM software works. This technology records and stores data about employees in a database and can give insight into how long employees worked, how productive they were and how effective they were.
HCM software may also depict when staff are most needed; it can influence shift scheduling strategies and may even use streamlined analytics and reporting to help benchmark employees reach their goals and further their progress through the company. Technology that can help employees in addition to employers is technology worth commending.
Bottom Line: Human Capital Management Software Is Worth the Investment
Although what is considered the “best” HR software comes down to more research, HCM software still has enough features to justify its use. This software has all the elements of HRIS with added talent management features. Some people may choose HRMS because of its number of features, but outside including payroll processing and TLM, HRMS is not much different from HCM. Therefore, HCM is the way to go.
HCM software is beneficial to the long-term health of a company. This technology can manage the application cycle and internal employee performance to help companies recruit, maintain and enhance top talent.
HCM software also decreases paperwork, human error and administrative tasks. If every employee has access to their information, they can also make needed information updates, time-off requests and hour adjustments on their own. This level of ingenuity means that a company’s HR workforce can spend less time tracking down employees, collecting information and updating data systems and more time supporting the people who are already employed at an organization.