One question asked a lot in the business world is what is human capital management? We all know what it means to manage something, but what of human capital?
Lucky for you, we’re about to tackle that very question! We’ll also cover the seven things you absolutely have to do if you want to manage your human capital effectively. Let’s get started!
What Is Human Capital?
Before managing human capital, we have to know what it is. That means more than rolling off a short definition.
Yes, human capital refers to the value of the people in our organization. However, the quality of human capital hinges on the following factors.
How You Find Candidates
The first factor in understanding the question of what is HCM is how you source the candidates you’re bringing into the company. Are you posting to generalized job boards or expending more laser-focused effort? As we move through the seven tips, we’ll discuss what you should be doing to get the best candidate pool.
How You Onboard Them
Another important part of human capital management is the onboarding. You have to make this process as painless as possible. You want to show the candidate right away that they can hit the ground running, make an impact, and receive plenty of training opportunities.
Quality of Life Provisions
Effective human capital management provides the employee with life improvements. The employee must realize quickly in his time with the company that it’s more than just a paycheck. It’s a culture that emphasizes self-care, family support, and other quality-of-life provisions.
How You Develop Talent
Any HCM system worth its salt is going to emphasize continuing development of its employees. After all, your human capital isn’t worth a whole lot if it fails to access the education and skills needed to advance the cause of the business or organization into the future. In the next section, we’ll be talking more about specific ways you can commit to development.
Getting Them in the Right Positions
The last element of ensuring you have strong human capital to work with is to make sure the people you hire are being hired in the right positions. Examine their strengths, weaknesses, and preferences.
If you can’t put them where they need to be, show them a viable path for advancement and development within the company. Doing so keeps talent motivated to grow and helps your company grow in the process.
Now that you have a better understanding of what human capital is, it’s time to look at the steps you should be taking to effectively manage yours. Let’s continue!
1. Learn Your Own Needs
Many near-sighted hiring managers and recruiters make the mistake of chasing after college degrees when what they should be doing is focusing on certifications. We live in an increasingly skills-based economy, so it makes more sense to chase after talent that can actually do the work.
In other words, don’t chase degrees when a skill will do. Look for a place where your talent can contribute immediately. Then, worry about how you will cultivate their talents into something bigger later down the line.
2. Look in the Right Places
The first step for many companies is to post on general job boards and social networks. This is a mistake.
Instead, you should be focusing most of your budget and time on sites that are well-respected within your industry, according to this website, a well-respected third-party provider of HCM management. Doing so may not get you as many applications, but the ones you do receive will be of better quality.
3. Establish Efficient Onboarding Procedures
Recruiting is an essential part of any HCM system, but you can’t just focus your efforts there and pat yourself on the back. Once you hire an employee, you have a bigger job to do — onboarding.
Onboarding should go quickly and efficiently because you want the employee to add value as soon as they possibly can. An efficient process also makes them feel more encouraged about their position, and it will help them create value as close to day one as possible.
4. Treat Each Employee As Unique
You should do this because each employee is unique. Valuing what they bring to the table will win their loyalty and encourage them to continue as far in their development as your company or organization will allow.
Failing to value their uniqueness leads to burnout and bad word-of-mouth. The more you value a worker’s individuality, the more they will value you.
5. Show Employees That You Value Them
What does the word value really mean when it comes to human capital management? It means you take specific steps to make the employee feel invaluable. Consider these suggestions:
- Pay a fair and competitive salary
- Offer plenty of time off opportunities through vacation, personal days, and sick days
- Give rewards and recognition for a job well done
All of these things should be used in conjunction with one another. That’s because people value their time, earning power, and appreciation.
6. Help Them Outgrow Their Positions
Every HCM system should be designed to help employees outgrow their positions. You want those years of experience to mean more than doing the same thing over and over again, year after year.
Your employee hopes for that, too. What if that means losing them, you ask? It’s a risk, but it’s one well worth taking for the corporate culture that it creates.
7. Do Not Waste Their Talents
The worst thing you can do with human capital management is to make your employees feel like anyone can do their jobs. If you do, they’ll feel expendable. Feeling expendable leads one to spend the core of their energies on finding a new job instead of trying to produce in their current one.
Answering What Is Human Capital Management Is a Crucial Step
When you answer the question of what is human capital management, you will be better as an organization and as an individual leader or board. Best of luck as you set out to improve your system. For more valuable HR tips and advice, check out some of our additional posts!