The U.S. labor force is projected to continue to grow over the next few years. Accompanying this growth will be a shift in workforce demographics and recruitment and retention strategies. Driving this shift will be low unemployment rates (some of the lowest since 1969) and aging baby-boomers leaving the workforce. Their retirements will position younger workers to move into new roles, thus changing the way companies will recruit and retain employees. In order to stay competitive and build a strong workforce throughout these changing tides, companies are looking to implement effective human capital management (HCM) processes.
According to Gartner, HCM is, “a set of practices related to people resource management.” This encompasses payroll, workforce planning, performance management, and retainment strategies, alongside a multitude of others. Also known as human resource management, the methodology focuses on the integral impact each employee has on the economic success of a business. Effective employee management allows businesses to achieve their strategic objectives.
HCM is becoming increasingly ingrained into HR strategies. It provides several benefits to businesses, especially those looking to rapidly scale their workforce.
Access to critical candidate and operational insights promotes data-driven recruiting. HCM tools, such as talent management systems, provides HR teams with relevant, real-time insights sourced from all aspects pertaining to recruiting and HR. Insights extrapolated from the data can be used to optimize onboarding, training, and employee engagement strategies.
Many organizations struggle with managing their workforce. HR staff often find themselves bogged down by resource allocation and administrative duties. Historically, HCM analysis was mainly spreadsheet-based. Data collection was a thankless, time-consuming task.
Modern HCM solutions can collate and report complex streams of data, with minimal margin for error. Automating rudimentary functions allows HR teams to redirect their energy toward interpreting the data in new ways and implementing data-driven solutions.
Collaboration can drive productivity within HR teams. Digital meeting tools, online chats, and project management software keeps all stakeholders, including remote workers, engaged and accountable. In turn, increased collaboration aids in knowledge transfer, as well as the development of well-rounded HCM strategies.
Voluntary turnover is a costly issue for employers, from a monetary resource perspective and the loss of industry knowledge. HCM software provides the functionality for teams to identify factors impacting turnover. For example, are employees yearning for career mentorship or a virtual reality training program? Perhaps there is room for improvement within the compensation package? Using analytics derived from an HCM system can help companies proactively identify organizational issues that are incredibly hard to detect in the absence of data-driven analytics. HCM tools help collect and display pertinent data in one place, highlighting potential problems before they become institutionalized issues.
Employers must focus on retaining top talent in order to close the burgeoning skills gap, which in turn helps optimize the onboarding and training process as a company grows its workforce. What was once an arduous process has become an agile, responsive, and, above all, incredibly competitive set of strategies. Effective human capital management leverages data and human expertise to create a blend of processes that optimize the HR experience for everyone involved.