What’s Involved in Human Capital Management?
When a corporate ecosystem functions successfully you can bet a well-considered strategy is in place that’s effectively managing the human side of the business.
The Evolving Role of Human Resources
As technology evolves, more tools have become available to lighten the paperwork load human resource managers find themselves buried under. Using innovative software applications, HR managers can analyze data and inform leadership about workplace trends. As a result, HR professionals are adding value by taking on a more strategic role.
Human Resources covers a lot of organizational territory. Key HR responsibilities include:
Recruitment
Finding, acquiring, and retaining talent are three vital functions of HR. Think about how many pieces of the human capital puzzle that encompasses! When there’s low unemployment (currently at record lows) these tasks are even more challenging. Today’s HR departments are expected to have a recruiting process that attracts qualified candidates from a smaller pool of applicants while appealing to a multigenerational workforce, and developing opportunities that reduce employee turnover in key roles.
Payroll
Employees and employers agree that accurate and timely payroll is an absolute must. When mistakes are made and employees aren’t paid on time, they’ll become dissatisfied and quick to look for new opportunities. Payroll processing tasks include time tracking, compensation, managing direct deposits, 401(k) contributions, payroll and tax compliance.
Training & Professional Development
Educational and development opportunities are a smart investment. Building an employee’s knowledge and skill set increases the value they bring to the company. Programs that educate employees can be a great way to develop those who show potential for advancement. If you’ve identified gaps in talent you can use training to help address them. Organizations that listen to employees and offer the kinds of professional development programs they desire improve chances of attracting the kind of talent they want while improving retention rates.
Compliance
Ensuring a company remains in compliance is no small feat. HR managers have to stay informed of changes at the state and federal level, update internal policies to address those changes, and monitor compliance status at all times to protect the company from hefty fines.
How HCM Technology Helps
Most C-suite executives acknowledge the starring role HR plays in a company’s long-term success. They know that today’s digital economy demands performance tools that can support these critical functions. Decision makers who weigh the implementation costs against projected ROI realize that acquiring the right HCM technology will help them achieve their goals and future-proof their organization.
Simplify & Integrate HR Processes
Many HR processes are currently handled using separate systems that aren’t fully integrated. You don’t want to use a paddle to power a motor boat. Managing the complex, modern-day functions of HR requires advanced technology. Organizations are moving toward systems that simplify everyday tasks and consolidate data so it can be used to identify insights and aid in long-term planning.
Cybersecurity & Payroll Data Encryption
Sensitive HR and payroll data requires an emphasis on security. Fortunately, systems are available that provide the level of cybersecurity needed to mitigate risk and protect information.
Better Talent Management & Gap Analysis
Systems that capture and unify data improve HCM and assist in closing the talent gap. Using customized reports in the recruiting process can help you determine if an applicant fits an open job description before there’s even a job to fill.
A good gauge of a company’s trajectory can be gleaned by data analysis. Key performance indicators (KPIs) a company can use to measure and improve performance outcomes include:
- Revenue Per Employee – Monitoring this metric (calculated by dividing total revenue by number of active employees) lets a company know how much of total revenue each employee is contributing. Every industry is different, and the number will vary over a company’s lifecycle, but the metric is a good measure of efficiency.
- Absentee Rate – High absentee rates can be costly. This metric can help you decide if the rate is acceptable or calls for a prevention strategy.
- Cost Per Hire – CPH is based on total recruiting dollars spent divided by total number of resulting hires and represents how much each new employee costs your company. To lower CPH, identify which expenses may be the culprit and analyze for possible adjustments. Are you getting desired results from each external recruitment effort? Are you posting on the right job boards?
- Rate of Performance Goals Met – When employees and managers work together to set performance goals, measuring those outcomes is an informative metric. Sometimes data points to an issue with the employee – a lack of follow-through or engagement. Data may indicate limited or inadequate feedback is preventing the employee from succeeding. In either case, measuring data is the only way to know what changes to make that will address lower than desired rates.
Why Does HCM Matter?
Employees Who Feel Valued Are Happy
Feeling valued is a key factor in employee job satisfaction and [company culture].(https://www.paycor.com/resource-center/employee-management-the-secret-to-building-a-great-company-culture) People define value differently. Some employees feel valued through compensation. Others prioritize feedback and achieving performance goals. Still others view benefits like PTO, telecommuting, or professional development opportunities as measures of value.
Happy Employees Become Brand Ambassadors
Social media and online groups give your employees more power than ever before to influence the opinion of others. When they speak highly about their employment to friends, family, and throughout their online network, it strengthens your reputation and impacts future employees and potential customers.
Loyal Employees Produce More And Improve Data
When employees are engaged and feel valued, they’re more likely to produce at a high level and be key contributors within your organization.
Human Resource Data Informs Company Strategy
Leveraging HR analytic data is a powerful tool to inform decisions and adjust course. When the analysis is positive, data will support continuing well-performing programs and practices. When data tells another story, managers know to take immediate action.
Company Strategy Drives Performance
When a company’s strategy is in alignment and the data supports it, performance will inevitably be strong. Consistently analyzing progress toward goals and objectives that are embraced by staff yields positive results.
Exceptional Performance Leads To Success
When KPIs confirm efforts are in alignment outcomes are strong, your company is optimized for success.
There’s no question effectively managing human capital has a significant impact on an organization’s ability to achieve. But you can’t jump ahead. Exceeding company goals and projections begins with effective human capital management. As our workforce evolves companies must adapt and adopt, leveraging available technology that lets them better engage with, manage, develop, and retain the very best talent.
How Paycor Can Help
More than 30,000 medium-sized and small businesses trust Paycor to help them manage their most valuable asset, their people. Whether it’s Finance or Operations, every department in your organization can benefit from partnering with Paycor, because our platform modernizes practically every aspect of people management, from the way you recruit, onboard and develop employees, to the way you pay them, retain them and build a company culture.
To learn how we can help extend your reach with the right technology and the most valuable expertise, contact us today.
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