A changing workforce requires that corporate leaders reevaluate how they will manage and operate. Advances in technology, global competition for the best talent and demands for optimal performance are now driving decisions.
Their response is to inject new technologies that helps to change organizational structures. More and more, company leaders are deciding how to redesign work, while relocating workforces and improving work processes.
As a result, these changes are having significant implications for where human capital management fits. Coupled with HR functions, what companies endured in the past demands retooling better strategies.
What is Human Capital Management?
Creating the right strategies begins by defining human capital management and determining how it affects an organization. Essential components related to managing people consist of:
- Time and attendance
- Talent management
- Human resources management
- Benefits administration
While distinct in specific functions, human capital management is really an integrated solution. This helps to ensure employees have what they need to function and perform as the company needs to reach business goals.
Employees are Your Organization’s Lifeline
Yes, this means that employees are the lifeline of your company. There is no way that your organization will survive unless it has people who will execute the mission.
A maximum part of your employees’ day is spent at work trying to achieve the goals and objectives that senior leaders have expressed. While they contribute to the company’s success, the company should return the favor by ensuring employees are motivated.
Developing a sense of attachment makes it easier for employees to deliver their best work. Investing in the company’s lifeline becomes a win-win. Providing training and resources for new and current employees encourages employees to work hard, upgrade their knowledge base and contribute to the company’s productivity.
HR’s Role in Building an Effective Organization
The question of what human capital is within any organization depends on how effectively it addresses talent management issues. This introduces an opportune moment for HR to rise to the occasion.
Intertwined is change management, capacity building and knowledge management. HR professionals become the drivers of the organization’s business strategy and what it takes to be effective.
HR’s role is strengthened when administrative processes become streamlined. In essence, this helps to keep a majority of the focus on managing the components of human capital.
Seamless integration of administrative functions with time and attendance, payroll and benefits reduces manual tasks.
By doing this, you and your HR staff are free to contribute more to the business strategy. One way HR can make a difference is developing better processes for metrics and analytics. HR automatically expands its role as a strategic partner within the organization.
Managers want ways to measure the effectiveness of subordinates. HR delivers this request with systems that can enhance decisions about human capital.
Ways to Increase Human Capital
Once HR and business leaders answer the questions, “what is human capital management”, the organization must proceed with ways that can increase the stock of this valuable resource. Three ways stand out: training, performance and communication.
Provide Training for Employees
Every organization must recognize the importance of upgrading its employees’ skills. Times change and every industry needs a knowledgeable workforce that keeps up with those changes. Not only is this good for employees, but it also strengthens the company’s competitive edge.
Training employees so they fully utilize their knowledge makes them an indispensable resource for the company. HR professionals and training managers must be cautious not to design program for the sake of training.
Rather, an effective program sharpens employees and increases the human capital of the company. Increased efficiency among employees increases the productivity of your company.
Monitor Performance of Employees
Another way to increase human capital is to monitor the performance of employees. Managers should get and give regular feedback. Waiting until the performance review date is not helpful for either group.
This is not something that has to be done face-to-face, which may discourage using this process. Instead, managers can use a performance management system and give employees access to enter information.
Tracking this on a weekly or monthly basis provides time for corrective actions. Improvement becomes visible sooner.
Communicate Directly with Employees
In today’s workforce, employees should be able to approach their managers directly with any questions or concerns. Individually and collectively, problems should be discussed openly. This helps to remove the rumor mill where information is not always accurate.
Employee productivity is not slowed down because they are unclear about a work process – or even the stability of the company. Unattended problems can lead to serious issues in the future.
Open communication also encourages employees to share ideas. Feeling that their opinion matters attaches employees to the organization. Loyalty breeds contentment and you are not faced with high turnover rates.
Defining Human Capital Value
An effective human capital management strategy is to first define the value our human capital brings to the table. You must also:
- Understand the business strategy of your company. Look at trends and market forces to determine the impact it will have on human capital. Priorities are set to align with the business strategy.
- Define the human resource strategy. A roadmap ensures you create the competitive advantage with targeted and smart hiring. Leveraging current human capital to address challenges is equally important to achieving objectives.
- Translate business strategy into the human capital strategy. The result is an actionable HR strategy and plan that makes your company effective in meeting goals.
Deep insight into the overall environment in your company are essential to getting this right.
Become a High-Performing HR Department
The issue of how HR can truly make a strategic difference relies, in part, on what it does to measure performance. High-performing HR departments have the capacity to distinguish themselves from practices that do not contribute to making the workforce stronger.
This positions the department to remain laser focused on developing talent that delivers strategic goals. Human capital strategies integrate with the business strategy by using key data. Therefore, all the components that make human capital management stand out and work behind the scenes.