Employees are the driving force behind a successful business. Even the best products will fail without outstanding service supporting them. For health and human services organizations, employees are even more important, as they themselves are the “product” - delivering care and services directly to the people you serve.
By definition, human capital management (HCM) means hiring, allocating, and training employees. To ensure the ongoing success of the organization, executives must go beyond the definition alone. Running a successful organization means they must look for ways to support staff if they hope to grow.
What is Human Capital?
Human capital refers to the people that your business partners with or employs. It covers anyone whose skills work toward pursuing your organizational goals.
Defining Human Capital Management
HCM traditionally refers to individuals directly employed by a business. With the increased popularity of working remotely and outsourcing, it now extends to consultants and freelancers.
HCM is the acquisition of new employees and applying strategies to maximize their productivity for your organization. The approach goes beyond conventional human resources by incorporating additional incentives and employee support.
It may encompass:
- Talent Management: This function includes sourcing new candidates and recruiting them. It further incorporates grooming the candidates for development through mentorship and training.
- Rewards: Rewards refer to any type of compensation, including salaries, bonuses, and other perks like company outings.
- Administrative Management: Administrative management means monitoring time and absence management.
Is Human Resources and Human Capital Management the Same Thing?
Human resources and human capital management are essentially the same things. Their differences become more apparent when you look at the goals the company wishes to achieve.
Human resources management refers to the administrative aspect of managing employees. Timekeeping and payroll both fall under this umbrella. In simple terms, HR’s goal is to ensure that employees come to work and get paid as agreed.
HCM may incorporate some HR functions, but it focuses on organizational growth. HR may train an employee for the job they currently have, while HCM will consider preparing them for a future role. For example, if an employee enters the company as an assistant manager, HCM may develop their skills so they can become a manager later.
HCM focuses on getting the maximum value across the lifetime of the employee relationship. Managers following this strategy understand that they must invest in growing the employee’s career if they want to retain their staff.
The Importance of Human Capital Management
Human services organizations know better than most that high-quality service delivery needs to be a priority in order to provide the best quality care for clients. If your employees have minimal training, poor management, or they feel demotivated, they won’t deliver optimal service. In this way, human capital can make or break an organization.
The process starts with hiring high-performing employees that fit within the company culture. It extends to equipping those employees with the tools that they need to excel. Finally, it ensures that high-performing employees remain motivated and want to stay.
An effective HCM strategy entails more investment in employees. The upside is a highly productive workforce and increased customer satisfaction.
What Are the Elements of Human Capital Management?
The elements of an effective HCM strategy include:
- Performance management
- Strategic workforce planning
- Use of workforce analytics
- Correct management of change across the organization
- Understanding the costs of not addressing issues
Effective performance management starts with clear expectations. By not clarifying performance goals, companies allow less productive employees to underperform while other employees pick up the slack. Creating clear goals helps maintain a reasonable workload for each employee.
Uncertainty is Demotivating
Highly competent employees may not perform as expected if they don’t have clear goals.
An effective performance management strategy defines what the employees must achieve clearly. Keep these goals consistent.
Employees must understand the rewards for achievement and the consequences of failure. When they do, they perform more consistently, so you can see who works well and what each person needs to succeed.
Is it a Sink or Swim Mentality?
Companies should have a system in place to help employees improve their results. By defining expectations and supporting employees, you create more growth opportunities and enable employees to do their best work.
Strategic Workforce Planning
Effectively managing human capital means prioritizing performance. It entails anticipating challenges and being prepared to adapt to them. Sometimes this means adopting a more flexible staffing approach.
Allowing an employee to work outside of regular office hours, for example, makes sense if it improves productivity.
Use of Workforce Analytics
Using meaningful metrics enables organizations to identify potential problem areas quickly. Many organizations focus on outcomes and overlook important employee metrics. Paying more attention to the latter will help the former improve.
Correct Management of Change Across the Organization
Change can be a good thing with proper management. Developing an effective strategy to implement organizational change prevents employees from falling behind, thereby keeping everyone up to speed.
Understanding the Costs of Not Addressing Issues
You may not notice the costs of not addressing issues at first. Business may seem to continue as usual for some time.
However, over time, employee motivation flags. High-performing employees leave for better opportunities. The organization’s service levels and performance decrease as a result.
Addressing issues when they occur means understanding how your business works and how to resolve conflicts in the workplace. When employees feel heard, they are more likely to stay with the company.
Human Capital Management Systems
Human Capital Management systems effectively integrate your organization’s HCM applications into one convenient platform. DATIS offers a unified software solution that provides valuable metrics and automates tedious functions.
We support you at each stage of the employee relationship. Our cloud-based software streamlines your HR processes so that you can focus on employee development.
Streamlined Onboarding Process
Onboarding a new employee is often an exciting time for the new hire, and a time when engagement is at its highest. This engagement can quickly fade away when the employee gets bogged down in redundant paperwork, filling out countless forms with information they submitted during the recruiting process. Our fully unified system enables the seamless flow of information from the candidate file to the employee file to eliminate redundant data entry and allow the employee to hit the ground running.
Employee Profiles and Maintenance
Our secure, cloud-based servers free up space on yours. You have instant access to employee records without the cost of storing them securely so that you can access employee timesheets, performance reviews, and a host of other data with the click of a button.
Our system makes it simple for employees to submit timesheets, leave requests, and a range of other administrative tasks. This service lightens the load on your human resources department, as employees are empowered to be more self-sufficient.
Find Out What Other Features DATIS Offers Today
Request a customized demonstration to find out how our fully unified human capital management system can help your organization achieve its mission. Our software saves you time and money, so don’t wait to try it.
Contact us today at 877-386-1355 and ask how we can make HCM easy and more efficient for your organization.