6.1 What does human capital management involve?
Human capital management is an entire process, which means you need to be a smart HR professional that engages and motivates team members. So many companies make the mistake of hiring new employees and then forgetting about them, which means that they become a number and not a person. Over time, this can result in the employee not feeling appreciated, which can have a negative impact on the overall function of the business.
Human capital management focuses on an employee life cycle. This means that you need to see the employees as the individuals that they are, giving them the tools they need to progress within the company. Look at each employee's personality and how they interact with their colleagues and use this to generate a workforce that works as a team to provide outstanding performance on a daily basis.
Bear in mind that an employee's personality is only one of the components you will need to focus on. As a group becomes divided, it will be your responsibility to adjust how this is approached and ensure that the entire team has the solutions they need to succeed. The status of the HR department has become elevated when it comes to business in today's marketplace. This is because they use technology which gives them the upper edge when it comes to employee data, how it is managed, and what they bring to the table in terms of employee hiring, retention, and training.
The HCM process should be an effective one that is geared toward helping the company grow now and in the future. The focus is to ensure that the HCM process is strengthened with the help of technology, from building processes to focusing on technological advancements which can make a difference on a daily basis to enhance the process considerably.
Communication is key
Companies in all industries have to deal with different changes that take place which may affect employees from time to time. Keeping an open line of communication with employees can make transitions easier and reduce stress and worry, helping employees to keep their production levels high at all times.
Change, whether taking place within the company or the department, can cause fear. Knowing what is going on within the company and what to expect moving forward can reduce this fear and, therefore, eliminate the scary element. Something like a budget cut or even laying off certain staff members will automatically be seen negatively moving forward. It is the responsibility of the HR department to turn this into a positive, making it constructive by communicating effectively. Keeping employees in the loop will help them transfer into new roles with ease and reduce the risk of production levels falling as a result of change.
Work on providing hope for the future when it comes to changes within the work place. Don't dwell on the past, but rather focus on the future and be transparent with team members to encourage them to be positive about what is going on around them and their current working environment.
Talent management
Human capital management covers a wide selection of processes and practices when it comes to the management of employees within a company. This includes talent management which refers to the recruitment, leadership, development, performance management, and career development of employees within the company at any given time.
Human capital management also covers payroll, expense management, leave management, and some other administrative tasks as is needed within the human resources department. HR management systems are broken into talent management vendors, which may or may not include financial management. This is due to the fact that people cost is an important part of any HR process. The HR department needs to look at talent from a number of perspectives including financial, operational, and management perspectives.
Capital
In order to get a good understanding of what human capital management really means, you need to understand how capital plays a role. Capital focuses on goods that are already durable - goods that contribute to service production. This is what enables the company to succeed and the capital is responsible for increasing that productivity.
6.2 What is human capital management?
Before looking at human capital management, you need to understand what human capital is, bearing in mind that employees are the blood flow of any company. A company cannot survive without its employees. The company should be run in a way that ensures employees provide outstanding productivity and contribute to the company's success moving forward.
Every employee needs to be seen as unique. They have their own skills, their own experience, and they require unique training to ensure productivity levels remain high and that the company benefits on a daily basis. Over time, employees will develop knowledge and experience which is invaluable to the company, which is called human capital.
Human capital is the collection of knowledge, skills, expertise, and attributes of employees and how it plays a role in the productivity of the company. All companies invest valuable time and money into the training of their new employees. An employee is expected to work hard and improve their knowledge and skills in return for becoming one of the valuable members of the team that helps grow the business.
Human capital management
Human capital management is the organization of employees in order to get them to play a vital role in the company's productivity. This means managing the work force in terms of acquiring, managing, training, and retaining employees that contribute to the success of the company. Human capital management also focuses on how the company treats their employees to ensure the growth and development of each team member so that they continue to contribute accordingly.
Every company should be focusing on training their employees to ensure that they become a valuable resource in the years to come, bearing in mind the important role employees play in the company's productivity levels. Human capital management understands how important the employees are to the company's success and ensures that they help contribute towards the success of the company.
Human capital management is imperative when it comes to the recruitment, management, training, and retention of high performance employees. The HR department will play a vital role in the recruitment process, ensuring that the right applicant is chosen based on the duties required by the position available. Talent acquisition is probably the most important role of any HR professional and it ensures that the right person is chosen to fill a vacant position that will provide the company with the highest level of productivity and success.
This means the HR professional will carry out extensive background checks and identify information that will help them ensure they are making the right decision. Human capital management is also imperative to the orientation of new employees, helping them feel at home, welcome, and comfortable in their new position. This reduces confusion and ensures the employee doesn't lose interest or doesn't feel overwhelmed by their new duties. Orientation helps provide new employees with the information that they need to help them grow within the company in the long run.
This role within the HR department will ensure that all employees are given the training that they need to manage changing situations within the company. It is the HR department's responsibility to make all employees indispensable to the company. This includes motivation through training, helping employees improve their skills and get them into the habit of being productive members of the team.
FACT
The 100 best companies offer nearly double the hours of on-the-job-training to employees as companies not on the list
Source: ceridianblog.wordpress.com
6.3 Important duties of the human capital management teams
Human capital management involves a number of important duties, including:
-Hiring the right applicant based on the position available.
-Providing ample orientation for the new employee to make them feel welcome.
-Ensuring the new employee is made to feel comfortable in their new position.
-Providing ongoing training to help upgrade knowledge and skill.
-Employee retention.
-Helping employees be self-sufficient at all times.
Human capital management is about the skill development of employees and helping them perform their duties to the highest standard. The focus is on the productivity and success of the company and recognising employees as an essential tool the company cannot function without.
6.4 Human capital drivers
Leadership
Human capital management focuses on leadership practices as one of the drivers to push the company forward.
Leadership is broken into four categories:
1. Ensuring that employees feel like an important part of the company. Communication is essential to helping employees be productive by providing them with clear instructions and directions, helping them understand the company's objectives and goals, and ensuring employees are aware of what is expected of them.
2. Including employees by sitting with them and encouraging them to provide feedback and suggestions.
3. Effective supervision to motivate and interact with employees to help them give their best and achieve success.
4. HR members, managers, and supervisors need to influence, support, and lead employees to ensure that they are contributing effectively on an ongoing basis.
Engaging employees
Employee engagement is a very important part of the human capital management process, making employees feel valued for their knowledge and skills within the company.
Employee engagement can be broken into four categories:
1. Responsible areas. Every employee needs to know what areas they are responsible for. Their responsibilities should be determined based on their experience, their skill, their education, and their expertise.
2. Commitment from employees will ensure that they continue to perform at their best.
3. Focus on time management to ensure no employee feels overworked and to help them manage their responsibilities in a timely and effective manner.
4. Evaluate each employee to ensure that they are performing and to identify areas that may need work or recognition.
Access to knowledge
It is important to ensure that all employees have access to information based on their duties and responsibilities. Training programmes can help employees improve their skills and knowledge to help them achieve success.
Optimise the work force
The five practices involved in work force optimisation include:
1. All work processes must be defined to team members to maximise productivity.
2. Working conditions need to be addressed to ensure that employees are comfortable and are able to perform at their best.
3.Employees must all be held accountable for any work they complete.
4.The right applicant must be hired for each position based on their abilities. This should be combined with an induction programme.
5.Performance must be monitored and managed to ensure success.
Training
When it comes to human capital management, you will soon learn the importance of training within the work force to get the most out of each employee now and in the future. New ideas should always be welcomed and employees should be encouraged to present innovative ideas to management at all times that they feel will benefit the company in the long run. All training should be relevant and practical and should be focused on improving employee skills. Training should never be offered just because it is something that is expected. The aim of training is to provide a benefit.
6.5 Ways to increase human capital
There are numerous ways to increase human capital within a company:
Training
Training should be constant and will determine the success or the failure of the company. Every company will succeed or fail because of their employees and this means that each employee contributes to the company's growth. A major responsibility of a HR professional is to ensure that the right person is chosen for a position, as the wrong match can lower productivity levels considerably.
Orientation is imperative to the success of a company and to ensure that employees have the knowledge they need to get to work. This means that they need to be given a good induction programme which introduces them to the systems, policies, and procedures of the company. Training should be ongoing and be offered when it is noticed that the employee could improve in a certain area. Training can sharpen skills and improve the performance of the employee considerably, boosting their productivity.
Performance monitoring
Performance monitoring of employees helps increase human capital, and managers need to get regular feedbacks from their employees. Concepts should be introduced for online weekly reporting systems, where each employee would have their own login. Each week, employees should be asked to complete the online weekly report which automatically goes to the reporting bosses where their performance can be evaluated, comments can be written, and feedback can be provided. This can help superiors track employees' progress.
Communication
Employees should feel comfortable enough to walk into their manager's office and speak to them openly. Any issues or problems should be discussed in an open forum which enables everyone to provide ideas, suggestions, and feedback. Even the smallest problem must never be ignored, as if it is pushed to one side, it can become a serious issue in the future. All major decisions should be put forward to employees who should have their opportunity to speak up.
Duties should be defined
Employees need to know their duties and these should be clearly defined to ensure success. Key responsibilities should be designated based on past working experience, areas of interest, and educational qualifications.
Motivation
Employees should be motivated on a regular basis to encourage them to work even harder and to be even more productive on a daily basis. Being motivated enables other team members to draw encouragement and inspiration from them. Employees need to be recognized for work well done, so they should receive incentives and feel valued in their role.
Understand employees
All employees should be understood in terms of their experience and skills and their knowledge and values. In order to get the best out of employees, it is important that they are understood. Human capital management is about developing essential strategies to ensure that the company develops and retains employees who consistently perform at their best and help to push the company forward.
This means that human capital management processes need to include:
-Recruiting the right person for the position - always focus on the best possible talent.
-Setting up a career development plan for each employee.
-Mentoring all employees.
-Motivating.
-Developing effective performance management strategies.
A strategic human capital management plan must include the following:
-Direction.
-Goals.
-Policies used to accomplish goals.
-Implementation plan.
-Accountability system.
Direction
This requires that you have a good overall understanding of the company. This means understanding and acknowledging any budget constraints, knowing the vision of the company and the expectations of the customers, stakeholders, managers, and more. All data should be collected and discussed to ensure that needs and expectations are being met at all times. Employees must be analysed to assist you in identifying any gaps that you may have in your system.
Goals
Gaps can help you identify goals which will improve efficiency of employees and make them feel valuable to the company as a whole. These goals should include ensuring only the best talent is hired, that a realistic induction programme is developed, and that employees receive constant training. One of the main goals of the human capital management system should also be focusing on staff retention.
Policies to accomplish goals
Set goals and objectives when it comes to designing policies and strategies. These are long term plans which are put in place to ensure retention. Duties should be delegated based on educational qualification, skill, and expertise. Know your employees and use this to meet the company's expectations and ensure the employees are happy and feel valued in their roles.
Implementation plan
This plan should include a number of steps to ensure that the human capital plan is put in motion.
These include:
-Setting up a deadline when it comes to the implementation of the plan.
-Allocating budgets accordingly.
-Ensuring successful implementation and allocation of resources.
Accountability systems
A system that is successful is well managed. This means that it will be your responsibility to ensure that the entire system is monitored and managed to ensure success. A company that focuses on human capital management will provide their employees with performance expectations on a daily basis. Managers take responsibility for the rewarding and rating of their employees, while holding them accountable when it comes to achieving company goals. Behind the scenes, the human capital management system is part of the enterprise resource planning (ERP) system or even the human resource management system (HRMS).
The system provides managers with information that they require to make essential and important decisions, which is all data based. The management employs an entire process which includes performance management, compensation management, recruitment, learning, developing, and more. HCM software is an effective way to manage the human capital management of a company. Software can be computer or cloud based and will help streamline and automate a number of processes including record keeping, policies and procedures, and more.
6.6 Human capital management software
Talent management software is one of the first software solutions you should look at investing in. This plays a vital role in human capital development, while providing a chance for the HR department to expand and manage their teams based on the company's expectations. Time and attendance software is the next software solution that falls under HCM. This software can save a company time and money in the long run, eliminating the risk of human error with manual processes and saving time with payroll errors in the future. You can track the time and attendance of employees, reduce the risk of overpaying employees, and more using a simple software solution. The software is easily available and can help with communications, staffing times, and so much more, and will offer a good return on investment in no time.
Module summary
This module has provided you with valuable insight into human capital management, what it is, what it entails, and how you can implement it to ensure the company's success. Human capital management comprises of numerous duties and steps, and you will get to learn these so you can ensure the right systems are implemented at all times.
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