JobsPikr | Header

What is the Difference between HCM and HRM? A Quick Walkthrough in Easy Words

difference between hcm and hrm

HCM and HRM are the terms that deserve to be differentiated in the evolving staffing industry.  

Let’s figure out the difference between the HCM and HRM without using jargon. 


HCM stands for Human Capital Management, while HRM breaks down to Human Resource Management. It’s not just the alphabet that switches in the acronym, but it’s the task that is majorly setting the two apart. 

Previously, employees were considered resources, but with the evolution and growth in strategic upscaling, employees are now considered capital. They bring on the ongoing value proposition if streamlined and trained realistically to meet the needs. 

Resources usually die out, but the capital doesn’t if spent realistically. These days, the term HCM has considerably replaced HRM to deal with the growing needs within any organization. 

What is Human Capital Management? 

Employees are a real-time asset to the companies. You can never grow as a service provider or product provider without great employees. HCM or human capital management helps create an environment that upscales the workforce potential by specific means. 

It is followed by implementing certain policies and processes around hiring, managing, and employee development. Furthermore, it plays a fundamental role in allowing hiring managers and executives to make important decisions about everything that includes the use of capital

From workforce costs to their future needs, promotion, training, operations, all of this just falls under this category. These processes are rather known to act as a motivational force for the employees, in turn improving the business value in return. 

What is the Best Definition of Human Resource Management?

HRM compromises the formal systems designed to manage people in an organization that’s supplemented with three primary roles. 

  1. Strategic: It is the primary role that falls under HRM, linking brand strategy to human capital and while timely contributing to organizational results. 
  2. Operational: It has operating senses of vision that works to balance out the issues between the employer and employees. 
  3. Administrative: It includes administrative responsibilities, including all the paperwork and policies implementation. 

Human Capital and HRM Set Apart 

HRM just focuses on the cores. It’s widely linked to meet the HR needs of small and mid-sized businesses. On the other hand, HCM is the expanded view of HRM. 

It includes greater functionality associated with employees’ lifecycle. It’s aimed to achieve global compliance that’s the basic needs of larger enterprises in the current world. Therefore, HCM is considered a broader perspective in the marketing field. 

Wrapping Up 

The difference between HCM and HRM is crucial to understand to achieve the brand goals tremendously. Valuing the employees and considering them as the capital and not the resources have widely helped the industry giants to succeed. 

Comment below your thoughts on this. 

Share :

Related Posts

Newsletter Signup