Human Capital Management is the process of identifying, recruiting, managing, developing, and retaining resources in an organization for maximizing the business value. It refers to extracting the best out of a resource and continuously upgrading their skill for their personal growth and eventually helping an organization achieve its goals.
Benefits of Human Capital Management (HCM):
1. Hires the Right Candidate at Right Place
HCM helps the HR personnel to hire the right candidate at the right place. It helps in analyzing the impressive resumes, tracking candidates, and identifying the best person for the role. The entire onboarding process is streamlined with the help of HCM. It helps in hiring the candidate whose skill or knowledge perfectly fits for the job and who also wants to grow within the organization.
2. Retains the Right Candidate with Proper Training and Development
Training and development programs are essential to enhance the skills of the resources so that they can work efficiently and eventually increase the organization\’s productivity. Most of the resources want growth and advancement in their careers. If they can get trained on the skills within the organization, they will feel engaged and will not look for a new job. Thus, HCM can help in retaining the resources.
3. Focuses on Soft Skills and Personality Development
It is considered that apart from Hard core skills, a resource should be possessing soft skills like Communication skills, Teamwork, Leadership skills, Adaptability, flexibility, problem-solving skills, etc. HCM programs are designed in a way to track the progress of the resources, and thus, it quickly finds out the weak areas in a resource and where it needs improvement. HCM ensures that the resources are trained on those skills, and there is a constant improvement in their personality development.
4. Improves Communication between Seniors and Subordinates
Human Capital Management allows a free flow of information from seniors to subordinates and vice versa. It ensures there is transparency in communication throughout the organization. The seniors should often communicate with the subordinates so that the broader goals and objectives are made clear, and top officials become aware of the problems of the resources. With proper communication, there will be no misunderstandings, and half of the issues will get solved.
5. Improves Return on Investment (ROI)
All organizations invest in human resources in terms of Salary, benefits, perks, etc. HCM makes sure that the resources are adequately trained to give maximum out of their job. Improving the efficiency of the resources by providing them opportunities for growth and advancement keeps them happy and satisfied, which leads to better productivity. If the resources perform better, eventually, the organization will earn profits.
6. Analyzes Performance and Decides Pay Incentives
HCM helps in making the resources self-sufficient so that they can perform better and achieve their personal goals along with fulfilling the organization\’s objectives. HR personnel should have a clear understanding of the core competencies. Once it is defined, the HR personnel can decide which skills are essential and what should be the pay for it accordingly.
7. Tracks Resources: Time, Attendance, and Benefits.
HCM system provides a platform for payroll management. It helps the managers to know the time (hours worked), attendance, and productivity of the resources so that they can analyze their performance. HCM brings scheduling and payroll reporting under one roof. It helps in tracking the accurate no. of hours worked, including overtime and thus paying for only those hours. It also records remote login and logout details of resources.
Thus, HCM is the process of streamlining all human resource activities like recruiting, training, tracking, and retaining. HCM system provides a lot of data that is critical for any organization and helps them in making the right decisions. HCM helps an organization to achieve its goals by upgrading the skill of its indispensable resources and motivating them for better performance.