What Are Strategic Human Capital Management Best Practices?

Human Capital Management (HCM) refers to managing the people that make up your organization’s workforce. Your employees are the most valuable asset your organization has, and they also likely make up the largest portion of your budget. Therefore, it’s important to manage your “human capital” or “human resources” as strategically as possible. Strategic human capital management is therefore the practices, processes, and techniques your organization uses to manage your workforce in the best way possible.

What is the Goal of Strategic Human Capital Management?

Before digging into best practices when it comes to strategic HCM, it’s first necessary to understand why it’s important and what you’re looking to accomplish. Broadly speaking, human capital management is focused on your organization’s performance, which is driven by the productivity of your workforce. Ideally, you want to enable your workforce to do their best possible work and to be as productive as possible. That’s where the processes and practices of your human capital management strategy come into play. 

Productivity Depends on the Employee Experience

Each part of your strategy should work to improve an important component of the employee experience. How each employee experiences working at your organization, including the people they interact with, the processes they follow to complete tasks, and their understanding of the organization’s mission, all influence their levels of engagement and productivity. Your HCM strategy should address various aspects of the employee experience to nurture an engaged, productive, and happy workforce within your organization.

Top Human Capital Management Strategies

The employee experience is multi-faceted and must be cultivated in a way that addresses the various aspects of work as well as the various stages of the employee lifecycle. Therefore, an effective human capital management strategy isn’t a singular approach to addressing the needs of your workforce, but a series of strategies that work in tandem to create a positive workplace culture and a great experience for each employee. With that in mind, we can dig into some of the top human capital management strategies used by human services organizations today.

Improving People Interactions

You’ve likely heard someone tell you that it’s the people that makes them love working for their company. In fact, you’ve probably heard this more than once, as this holds true for many people. The hardest and most stressful jobs can be made that much more enjoyable by the people that work alongside you. And this demonstrates what a significant influence managers and colleagues have on the employee experience. An employee will spend a great deal of time communicating with and working with coworkers each day, and creating a culture of collaboration rather than competition can improve these employee relations, keeping everyone working toward a common goal.

Building a collaborative and positive workplace culture is not something that happens by chance. It should be considered a strategy in itself, as your leadership teams works to create the right environment for their organization. This requires a thorough understanding of your organization’s culture, creating a diverse and inclusive environment, and actively recruiting individuals who not just have the right credentials but the right cultural fit for your organization.

Once you have the right people in place working to build the organization up and supporting each other, your strategy still needs to continue to actively promote this culture. This part of your human capital management strategy may include rewards and recognition, celebrating your employees and highlighting their efforts so that everyone can share in the recognition and appreciate their colleagues.

Operational Processes for Your HCM Strategy

When you hire a frontline worker for your organization, they likely pursued the position for their ability to help other people, not because they were excited to spend their time filling out redundant paperwork. The operational processes that your organization adopts are therefore also highly impactful for the employee experience. Slow systems, outdated technology, and inefficient procedures can wear away at employee engagement, as the employee becomes bogged down in the processes rather in the more meaningful aspects of their job. On the flipside, processes that enable employees to do their best work will help improve their experience. This may include automating repetitive tasks, eliminating redundancies, and streamlining procedures so they can focus on their primary duties.

As part of your HCM strategy, your operational processes should constantly be monitored and assessed. Inefficiencies don’t just cost time, they also cost money. Putting a system in place to identify inefficiencies and implement solutions can help your organization to continuously improve the employee experience. In fact, one of the best ways to accomplish this is to ask your employees directly what is or isn’t working for them. You may be surprised that smallest change can make the greatest difference in improving the employee experience. Those minor annoyances and inefficiencies add up and compound over time.

Collecting feedback from your employees and making meaningful changes (even small ones) has an added benefit for the employee experience. It helps get your employees involved in working to improve the organization, and it makes your employees feel like they have a voice and are being heard as well. This helps connect the employee to the organization and creates a two-way street for communication.

Communication at the Organizational Level

Communication on its own is an incredibly valuable strategy for effective human capital management. Without it, your employees may develop a sort of tunnel vision in which they only see their individual, day-to-day tasks. At the organizational level, communication from leadership can help remind employees of how their work contributes to the organization as a whole. Communicating your organization’s mission and strategic vision can unify your workforce, helping everyone understand why their work is important and where it will lead the organization in the future. Organizational communication is a way to demonstrate how much the organization values each individual contributor, by including them in the big picture, visionary aspects rather than leaving them to the daily grind.

Professional Development at the Individual Level

Many HCM strategies aim to address the workforce as a whole, but the individual experience is also important to consider. This is where every manager needs to be involved, providing a one-on-one interaction to meet the individual employee’s needs. This includes the tools and technology an employee needs to do their job today as well as setting goals and providing professional development opportunities for each employee’s future. This will naturally be specific to the role and the individual within that role, which makes it a more challenging strategy to implement effectively but also one that offers the opportunity to be most personalized.

Investing in each employee’s personal growth isn’t just beneficial for the employee. It also benefits the organization by creating a pathway to success for the employee to strive for. In the long-term, this translates to better retention rates. Employees that are happy where they are and have a positive outlook about their future at their organization are more likely to want to continue working there. Any organization with high turnover can attest to the dip this can cause in morale as well as the strain on recruiting that can make it difficult to maintain adequate staffing levels. Better retention can help maintain a positive morale, and likewise, high morale will lead to better retention rates, creating a win-win cycle for your organization.

Best Practices for Your Organization

We’ve looked at many human capital management strategies in a more generalized sense because while the principles themselves are applicable to any organization, how you apply it at your specific organization will be completely unique. Communication can take many forms, include various channels, and be provided at different cadences, for example. But what’s right for your organization may still be completely different than the organization down the street from you. You’ll want to assess your organization’s unique culture, what your HCM goals look like more specifically, and where to focus your efforts the most. 

Enabling Strategic Human Capital Management with Technology

Considering the numerous and ongoing strategies required to create an effective human capital management plan, many organizations are turning to technology to help them implement and organize their strategies. Human Capital Management software is designed to do just this – create an easy way to manage all of the people aspects of your organization. 

At DATIS, our HCM software enables organizations to apply many methods for creating an effective Human Capital Management strategy. Just some of the ways we help your organization succeed include:

  • An applicant tracking system – Find the right candidates with a built-in applicant tracking system that allows all decision-makers to gain a bird’s-eye-view of candidates and make informed decisions about who they hire.
  • Centralized data – With all employee data stored in a unified, cloud-based system, applicant information can flow directly into the employee file upon hiring, creating a smooth and seamless onboarding process.
  • A dedicated careers site – A company-branded careers site goes beyond the constraints of online job boards and allows your organization to show off its unique culture. The more an applicant understands your culture and values, the more likely you are to receive candidates that are the right culture fit to help you organization thrive.
  • Company-wide communication – Since HCM software is something all employees will regularly be accessing, it creates the perfect place to provide interactive company news stories. 
  • Recognition – In addition to interacting with company news, employees are able to provide virtual shoutouts or high-fives that recognize their coworkers’ efforts for the whole organization to see.
  • Professional development – Goal setting, feedback, and professional development are all built in and stored in the employee file, creating a single place to look at each employee’s progress and productivity.
  • Workforce analytics – With all of your workforce data stored in centralized system, you have a single source of truth to turn to for all of your workforce analytics needs. Our software provides standard and custom reporting capabilities that help you find the workforce data you need to analyze and improve your workforce operations.

Unified HR and Payroll Software for Strategic HCM

DATIS is proud to provide a unified HCM software solution that’s intentionally designed for the health and human services industry. Powered by Position Control, our software offers and end-to-end solution that encompasses the entire employee lifecycle within a single platform.

Through our software, organizations are better able to empower their employees, engage their teams, and evolve their workforce to better achieve their mission. If you’d like to learn more about how our human capital management software can help your organization succeed, contact us today.

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