Understanding the
Basics:
Today’s workforce encompasses five generations, a range with
different workplace needs and expectations. The workforce is also
more nimble than ever before with salaried, hourly, contingent, and
contract workers. In the digital economy, skills are the new
currency, and the value of scarce skills is on the rise.
At the same time, people have broader expectations of work. They
want more than just a paycheck. This new world of work, this new
workforce, and this new social contract between work and worker
requires new ways of managing human capital.
In this blog post, we’ll discuss human capital management and its
value to organizations. We’ll also answer common questions about
HCM and explore how technology improves HCM and business
performance, and helps drive organizational agility.
What is human capital management
(HCM)?
At its most basic level, human capital management (HCM) is the
practice of managing, recruiting and developing a workforce, and is
overseen by an organization’s human resources (HR) department.
Yet there’s much more to HCM that involves not just direction from
HR, but engagement from people managers across an
organization: workforce planning, providing learning opportunities,
and building a diverse and inclusive culture, to name a few.
Because a happy and engaged workforce is so critical to a
company’s success, and helps attract more great talent, smart
businesses view HCM as a highly strategic practice.
Years ago, HCM was dominated by a mindset that personnel were
to be “managed.” Today, leading-edge companies see stellar HCM
as something that enables people to be their best, most productive,
and most engaged selves. In a people-first culture, an HCM
mindset also views employees as the most important of all
company assets. That’s true for good reason. Research shows that
better, more prepared, and more diverse workplaces deliver
superior results. To get there, good human capital management
practices are key.
Leading-edge companies see stellar HCM
as something that enables people to be
their best, most productive, and most
engaged selves.
Why is human capital management
important to success?
Human capital management is important because people are the
heart of any company, the source of its ability to innovate and
compete. An effective HCM approach allows businesses to hire the
best talent possible, maximize their potential, and further develop
them for greater success. The executive leadership of forward
thinking organizations, including the CEO, CFO, and COO, view
human resource leaders (such as the chief human resources
officer, or CHRO) as strategic partners, and expect them to help
advance corporate objectives through strong leadership.
In summary, human capital management is important for:
Recruiting, hiring, and retaining the right talent.
Onboarding talent to the organization.
Creating an atmosphere that’s inclusive, diverse, and provides
meaningful work.
Enabling career choices through personalized learning
experiences, mentorship opportunities, and career path
visibility.
Enabling employees to perform to their highest potential.
Fostering equitable workplaces.
Safeguarding compliance with regulations and laws.
Paying your workforce.
