The Future of Human Capital Management
HR managers face great challenges such as managing attrition, encouraging retention and meeting ever-increasing demands from employees, customers and executives who want greater efficiency and HR input on achieving business objectives through hiring strategies and people management practices. HR departments often find their duties expanded to deal with empowered customers, key business suppliers, business associates and customers. HCM software provides technical capabilities that many departments fail to leverage to their fullest potential while executives cut funding and reorganise departments to handle cross-departmental duties to streamline operations. This changing dynamic represents an epic shift away from focusing on talent and a shift to concentrating on people even though departments must use technological tools to accomplish their duties and stay competitive.
HCM: Treating the Person and Not the Disease
Today’s HR practices focus on engaging and empowering employees and key company stakeholders, and HCM systems are expanding well beyond managing talent and into uncharted territories based on the needs of diverse companies and industries. Some companies buy stand-alone software for multiple tasks such as performance management, recruiting, payroll and other HCM imperatives, but many companies are integrating their software with robust API layers that foster automatic processes such as data collection, analysis of website behaviour and enabling automated customer – and employee-facing portals. The future of HCM is here, and forward-thinking companies can meet their objectives with workflow driven integrated HR functions that empower employees, HR staff and key company stakeholders.
HCM Systems Set to Change Historical HR Practices
The history of HR is often theorised to have begun with ancient military campaigns. Nations without strong armies were at the mercy of brigands and barbarians, so smart leaders developed methods of building armed forces and recruiting people to serve. It became necessary to segregate tasks to ensure that these forces could be fed, housed, trained and organised against enemies. These were the first HR practices, and Sun Tzu, author of The Art of War, and Machiavelli, author of The Emperor and other books, created some of the first training manuals.
Historically, HR focused on transactions, but its role has expanded in modern times to include strategic planning, talent management, labour relations and fostering diversity in the workplace.
Workplace culture has become the top driver in attracting and retaining the right people for your organisation. However, even success becomes increasingly difficult to define, and the right HCM will develop the performance benchmarks that define success and curate, automate and analyse the data.
HCM success depends on how well is addresses Key Industry Drivers
The key to success in HCM is empowering customers and employees and implementing an inclusive approach. This strategy puts employees in charge, an idea that would have horrified HR managers just a few decades ago. Millennials are notoriously committed to more inclusive company cultures, and to foster employee loyalty, you have to empower more people.
Today’s drivers of core HCM competencies include:
- Building Leadership
- Retaining Employees
- Fostering a Recognisable Company Brand
- Accelerating hiring practices
- Developing Performance Benchmarks
HCM Renders Outdated Systems Obsolete
Given the new challenges of HRM, it’s hardly surprising that many organisations don’t have the technical capabilities to manage people holistically. These dated HCM systems suffer from the following challenges to traditional HRM corporate practices:
- Lack of talent frameworks
- Failure to align HR practices and business strategy
- Difficulties in accessing company information securely
- Critical information that’s often locked and inaccessible without supervisor approval
- No programs for fostering cultural diversity
- Insufficient programs for dealing with transnational issues
What does a great HCM look like?
An effective HCM system fosters engagement, empowerment and enough flexibility to deal with wide-ranging and continuously evolving situations and third-party recruiting associates. The traditional functions of HR software – recruiting, managing payroll and records, onboarding, skills gap analysis, performance evaluations, remuneration and succession planning – should be fully integrated into the company’s digital platform. Establishing a robust API layer in your company’s operating software makes it easier to upgrade the software, add new modules as needed, connect and third-party associates for BI, recruitment and other company objectives.
HCM Shifts to Empower Employees Holistically
It’s critical to focus on your employees to drive better performance, foster loyalty and create engagement. That requires addressing people management holistically by focusing on coaching and mentoring, airing grievances, and automating data collection to understand your employees and their performance drivers. One effective method of fostering an engaged staff is tracking and monitoring the following pillars of managing people effectively:
- Generate Support for a Mission-Driven Organisational Structure
- Foster Cultural and Job Flexibility
- Create a Supportive Environment
- Provide Supportive Resources for Mobility.
- Make Work Duties More Engaging, Rewarding and Enjoyable
- Empower People and Leverage Their Skills to the Fullest Extent
- Create on Demand Learning Opportunities
- Provide Rewards and Incentives
- Embrace Diversity
- Equip People With Systems that Encourage Engagement
HCM Continues Its Evolutionary March
Darwin’s theories about evolution and the survival of the fittest clearly apply to business in today’s digital ecosystem. Selective pressures to grow, expand into global markets and take on expanded roles in providing UI/UX benefits for company stakeholders, customers and employees can be expected to continue for the foreseeable future. HR plays a key role in these developments, and only those departments that can adapt to the challenges of modern HR will position their companies for business success in the highly competitive global marketing environment.
A modern HCM will empower HR departments to achieve their objectives, but since trends evolve so quickly and continuously, agile approaches, Software-as-a-Service resources and cloud-based HCM are essential to match the pace of developments.
If you’re looking to do more with less, an agile HCM system can match the pace of evolving trends, a mobility-empowered workforce, getting the best performances from staff and managers and reducing attrition rates. The statistics overwhelmingly support these observations, and numbers are compelling enough to convince your executive teams to make supportive decisions for developing the strongest possible HR policies.