Human capital management (HCM) is an important concept to understand in order for any business to operate successfully. But what is HCM? How does it generate an ROI for your organization? 

Here is what you need to know.

What Is Human Capital Management?

Human capital management, often referred to as "HCM", is a business strategy or concept that revolves around managing your workforce through the entire employee lifecycle. From the moment you hire someone until they retire, each employee requires management. 

In fact, that's where the name comes from, your "Human Capital" is your people, and subsequently your available skills and talents to help you run your business. 

Human capital management involves many different business functions, primarily focusing on payroll and HR, including: 

• Payroll
• Human Resources (HR)
• Employee Benefits
• Time and Labor Management
• Recruitment and Onboarding
• Compensation Management
• Performance Management
• Learning Management
• And More!

How to Maximize the ROI of HR​

HCM not only helps businesses take care of their workforce, it brings an ROI to your business! 

By implementing HCM technology and other HCM best practices, your business and HR and payroll teams can see a new return on investment. 

There are six key areas in which HCM technology can bring an ROI to your business:

1. Save time, and improve time management
2. Build a quality workforce
3. Improve employee skills
4. Make more informed business decisions
5. Keep your business in compliance
6. The hidden impact on culture

Save Time, and Improve Time Management

One of the most common challenges in any role dealing with HR, payroll, or workforce management is time management. Time management is something many people struggle with inside or outside the workplace.

In terms of the workplace using sluggish processes only makes things worse, and sometimes, makes good time management unobtainable. 

By using an HCM solution, organizations can access automated workflows and procedures that can save them time across all HR and payroll functions. 

And as we all know, time is money. 

Find Quality Talent to Build Your Workforce

Talent acquisition is one of the most important HR functions. It contributes to the long-term success of our business. Yet identifying, interviewing, and negotiating talented employees takes significant time and resources from many individuals within your organization. 

Not to mention, after all that you have to onboard your new hires. 

By using modern HCM technology, companies can access a variety of tools to ensure that the right candidates find their organization. Then managers can streamline the decision-making process through pre-screening questions, informed decision-making, and more. 

Once you've made your decision, generate and send correspondence and collateral materials such as a new employee orientation package via electronic distribution and turn new hires into productive employees, faster.

Put Your Employee Growth First

In today's business landscape and the competition for talent, employee retention is a must. One of the most important ways to keep employees happy with their organization is by putting their growth first. 

A tangible career growth path supported by strong learning resources and programs can keep your employees engaged, satisfied, and more importantly, upskilling. This doesn't just keep them happy but keeps your organization growing as workers pick up new skills, abilities, and knowledge. 

With an HCM solution, employees can access comprehensive training and have the autonomy and flexibility to design their learning path and learn at their own pace. All the while employers can oversee and adjust their learning path with a single click.

Make More Informed Business Decisions

HCM solutions offer advanced HR analytics and more, helping employers ensure they make the right, informed decisions for their business and / or workforce.

Insufficient access to crucial employee information hampers the ability to make informed decisions. Without a single source of employee data, what data is available is often incorrect and insufficient and does nothing but lead to the wrong decisions. 

An HCM solution maintains a single source of employee data, connecting things like payroll and time and attendance, with automated workflows to ensure things are kept up-to-date and accurate across the system. An HCM solution is essential for HR Reporting and Analytics best-practices.

Maintain Compliance and Avoid Fines and Penalties

When it comes to operating a business, one of the biggest knives to the heart is getting slapped with a huge penalty or fine because you were out of compliance. Even more so, when the violation could have easily been avoided. 

With an HCM solution, employers can take advantage of things like automatic compliance checks and notifications, as well as the ability to generate a variety of reports to make compliance easy.

The Hidden Impact on Culture

ROI is typically seen as a monetary value, but the impact of HCM goes far beyond increasing the margins for your business. The impact on culture is just as impactful and can be what takes a business from average to a great place to work.

An HCM solution can help: 

• Foster a culture of transparency and trust by offering things such as clear performance metrics and goals, visibility into company policies and procedures, self-service, and providing open feedback channels
• Empower and engage employees by giving them greater control over their work-life, career, and more with access to their own records and benefits information, power over their learning management, and more
• Enhance your organization's image by showing employees and potential applicants that you want to put your people first by enhancing workforce management

Get Started with Modern HCM Technology

Ready to get started?

HRCG is already helping countless businesses across the nation with their workforce management by implementing modern HCM solutions, supported by our industry-leading HR services. 

Contact us today to learn more.