Definition of Human Capital Management, Benefits and 5 Strategies

Rancakmedia.com – The definition of human capital management or HCM must be understood by all business owners. Check out the full review below! HCM stands for Human Capital Management, which refers to a set of procedures used by organizations and companies to recruit, manage, develop and maximize their employees. The goal is to increase the estimated value of their company.

The HCM Process Will Produce Various Results, Including:

  1. Obtain personnel according to the skills needed
  2. Have staff with all the capabilities required in a work environment
  3. Increase results by managing employees successfully.
  4. Besides the abbreviation HCM, there are additional companies that use the term Human Resource Management.
  5. To better understand both, consider the following description!

Definition of Human Capital Management

Both HRM and HCM are responsible for managing the human component of the company. However, these two departments actually have different approaches in viewing individuals. This has an impact on how the company sees it.

Human Capital is a department that deals with people from a capital point of view. Besides that, resource man can be increased to increase company profits as well as other company assets. In essence, the company considers people or employees as assets whose value can be developed.

With this viewpoint, HCM evaluates the process of recruitment, training, and payment of salaries as a form of investment that will provide ROI (Return of Investment). Investments can also take the form of providing employees with the best working conditions, as well as providing them with a variety of useful benefits.

Human Capital Management Duties

In general, the role of Human Capital is to increase the value of a company's human resources in order to maximize their potential. The tasks performed by HCM during the process include:

  1. During the process of searching for possible employees, compile the database. When the time comes, the company is ready to recruit every open position with new employees who meet the specified requirements.
  2. Post-recruitment, HCM is entrusted with preparing employees to work through the onboarding process.
  3. The preparation includes presenting tools, goods, company policies, to colleagues
    To improve employee performance, HCM also plays a role in training and development programs
  4. HCM retains the best of the company's expertise through training and award programs
  5. Conduct employee performance appraisal and manage all data related to employees.

Benefits of Human Capital Management

HCM considers employees as more than a means to achieve business goals. Having HCM can provide a variety of benefits to both individual employees and the business itself. Any?

  1. Improved job satisfaction is a by-product of training and development efforts, such as increased productivity.
  2. The availability of management in the form of training and development can help improve employee retention and engagement with the companies involved. This can minimize the turnover rate which costs a lot.
  3. Excellent knowledge of investment methods in human resources can help companies increase ROI (Return of Investment)
  4. The hiring process works well because of HCM's capacity to attract great applicants and develop their skills for company success.

Strategy in the Implementation of Human Capital Management

There are five techniques that can be used to design good HCM in your company, namely:

  1. Set a clear and meaningful vision. This includes everything from the size and budget constraints of a business to the expectations of stakeholders and the demands of employees on achieving business goals.
  2. HCM can better close the gap between business and HR demands by gaining a better understanding of both. Prioritize training and development initiatives for prospective employees.
  3. Decide on the best strategy and the policies needed to design it.
  4. Develop a strategy to implement the strategy, which must include allocating sufficient resources, setting a time schedule, and allocating adequate funds.
  5. Verify your progress regularly to make sure everything is going according to plan.

Conclusion

HCM stands for Human Capital Management, which refers to a set of procedures used by organizations and companies to recruit, manage, develop and maximize their employees.

HCM evaluates the process of recruiting, training, and paying salaries as a form of investment that will provide ROI (Return on Investment). Having human capital management (HCM) in your company can provide a variety of benefits to both individual employees and the business itself.

There are five techniques that can be used to design a good HCM, namely: Set a clear and meaningful vision. Prioritize training and development initiatives for prospective employees.

Back to top button