In the traditional approach to managing human resources (HR), employees are viewed as resources that the company can put into place to carry out tasks and achieve objectives. This is certainly a valid perspective and one that most corporations have been using for the past century, leading to modern companies relying heavily on human resource management (HRM) software. However, in recent years, a slightly different school of thought known as human capital management (HCM) has emerged, in which workers are treated as assets whose value can be measured and improved upon. Here are a few ways HCM differs from HRM and how any business can leverage this concept for enhanced staff management results:
1. Using HCM Software
Many companies have started using HCM software to facilitate tasks that have been traditionally related to HR management, such as recruiting, payroll management, benefits administration, performance monitoring. Essentially, HCM software can provide every feature and function that a well-staffed business needs to manage its employees and receive the most value from their daily and annual output. By consolidating these duties into a single interface, business owners and managers can take on the challenge of managing their entire HR department independently.
2. Capital vs Resources: What’s the Difference?
You might think there isn’t much difference between calling a person a “resource” or an “asset” (capital), but there is a clear distinction between these two corporate philosophies. Resources are typically static and finite in nature, whereas assets can improve in value through ongoing investment. There are many resources that are not essential assets, but most assets could be considered resources as well. Managing people in the same way you manage intangible assets – investing in them to increase their value over time – allows for a more progressive and appealing corporate culture.
3. Creating Developmental Plans
When an investor seeks to increase their net worth by obtaining more capital and assets, they’ll typically start that process by creating a business plan or making strategic investments. Human capital management lets you take advantage of this concept within the context of HR by creating specific developmental plans that will build upon your employees’ skills, credentials, and experience. HCM software will often include tools that help you monitor employee performance, identify their strengths and weakness, and create plans for helping them address their shortcomings and build upon their existing skill sets.
HCM Prepares Your Company for the Future
You might be familiar with the saying that “change is the only constant in the universe.” Whether you like it or not, your employees) and your company as a whole) is going to change over time. By leveraging an advanced approach to HR that incorporates the usage of the HCM platform, you can ensure that your business is prepared to facilitate the only kind of change that you’d ever want to see – positive improvement. An HCM software application makes it easy to put all of those plans for your staff’s future into a centralized, easily manageable platform.