What Is Human Capital Software? Definition And Meaning
Managing human capital is the key role of human resources. With the work culture-changing and people becoming scattered in the workplace, this has become more of a challenge.
The human resources department has to take the help of different software systems for effective employee management.
Human capital management software has become the need of the hour. The software offers multiple services on one platform, which helps ease HR processes. From performance management to absence management, there are many different functionalities that you can find in human capital management (HCM) software.
The article provides in-depth information about human capital management software and how businesses can follow effective workforce management.
What is Human Capital Management?
Human capital management involves talent acquisition, development of the workforce, and employee management. That is taken care of by the human resources department. However, that is not all that HCM means.
HCM also includes offering learning opportunities to the employees, workforce planning, building an inclusive and diverse work culture, and many more.
An engaged and happy workforce will lead to the success of the company. Hence, effective HCM can be directly related to the company’s growth.
Why is Human Capital Management Important?
HCM helps the company find the right talents, which will lead to their success. It also creates an environment for the employees to grow and learn new skills and incur knowledge.
HCM is required for the following reasons –
- Employee engagement
- Talent acquisition
- Developing employee skills
- Motivating employees to utilize their full potential
- Developing equitable workplaces
- Ensuring employee satisfaction
- Timely workforce payments
- Safeguarding compliance
What is Human Capital Management Software?
A human capital management software overlooks all the necessary HR functions and eliminates many manual processes.
The software focuses on bringing talent management and analytics capabilities under one roof. It helps companies focus on developing the skills of their employees for better performance.
Depending on the human capital management software you use, the company will manage their employees more agile and smarter.
It is crucial to remember that the workforce is the most valuable asset of any company, and keeping them happy will result in the betterment of the business.
What are the Main Functions of Human Capital Management Software?
The function of human capital management software is to manage the functions of HCM. Hence, the primary functions of the HCM system are as mentioned below.
The software will help companies in recruiting the right people for the company. It is essential to note that the right talent does not always mean being qualified for the job.
The employee should also be the right fit for the company. Hence, along with being qualified, the employee should be able to match the work culture.
Applicant Tracking System
The applicant tracking system is a part of the recruitment and human resource management process. In this, the software collects resumes and stores them in a database.
The hiring managers can access this database to connect with the people who are perfect for the organization.
Mining Scare Skills
Several companies are becoming digitalized, which means there is a requirement for new skills. The human capital management (HCM) software helps you hire people with the talent you require.
The software will also help you understand the skills currently present among your workforce and identify the talent gaps. It will forecast the skills you will need in recent times and also for the future.
Enable Talent Development
The skills that your employees have may not be enough for the future. Therefore, talent development is one of the core HR functionalities that every company follows.
The HCM software systems will also help the HR department form plans to develop the talents of their human capital.
Performance management includes monitoring and evaluating the work of the employees. The idea is to provide an environment where employees can give their all and use their abilities.
Having good performance management is essential for the employees to function effectively and efficiently. The software helps conduct routine performance reviews, coach the employees, focus on effective workforce planning, etc.
The performance reviews will help employees understand their current performance and help them get better.
Compensation management means checking that the salaries of the employees are correct and competitive. The payroll administration will ensure that the pay structures are fair for all employees.
That is not all; it also includes bonuses, fringe benefits, and other compensation forms that the employees receive for their work. This comprehensive HCM solution will make it easier for human resources to access employee data and their compensation information.
Without passion for their job, an employee would be unable to give their best in the workplace.
Employee performance will take a hit, and this will also be bad for the company. Hence, one of the HR tasks is to increase the employees’ commitment to their job.
The HCM system builds programs that would help increase job satisfaction and also help with employee retention. It involves recognizing the efforts and achievement of the employee, giving them positive feedback, and rewarding them for their excellent performance.
Absence management is the process of reducing employee absenteeism and maximizing the productivity of the employees. It ensures less disruption in the workforce and maintains a happy and productive culture.
For example, Oracle HCM Cloud helps you manage the absenteeism of the employees both locally and globally. It is a rules-based application that helps HR departments implement rules and policies effectively.
Talent management is one of the main components of HCM software. It includes activities such as compensation management, succession planning, performance management, and leadership development.
Each section of talent management will focus on specific issues like checking performance reviews, accessing the employee lifecycle, training employees to nurture and enhance their key talent, and much more.
Choosing the right human capital management (HCM) software will help change the face of your organization and reduce manual calls to the HR help desk. It will ensure workforce optimization, enhance business performance, and care for related HR and administrative tasks.
The software will automate the whole process, reduce the manual workload of managing employees, and keep them happy and productive. An efficient human capital management system will contribute to the growth of the workplace and help with the succession planning of the employees.
When choosing a human capital management system, you need to ensure that the features align with your company’s needs. Not every software will provide you with the features you need; hence this is an essential consideration.
Choose an efficient human capital software, and you will have a thriving workplace with happy and efficient employees!