The most valuable asset in any organization is its human capital. Recruiting and hiring staff is only part of the equation. Being able to analyze personnel skills and qualifications to ensure they are the right fit for the job can make or break how well your business succeeds. Human capital management software is designed to make the flow of recruiting, training, and maintaining staff much more manageable. But why does a business need dedicated software for these tasks?
Here’s what will be covered in this guide:
Human capital management software (HCM software) is a collection of human resource applications that helps companies manage their workforce through recruitment, onboarding, training, and performance management. These software functionalities give you the capability to manage payroll, track employee time worked, manage benefits administration, gauge the effectiveness of your staff, find and hire new employees, and much more.
The functionalities offered by human capital management software are important to help prevent overpaying employees, help determine if employees are meeting goals and benchmarks, help management schedule shifts at the most needed times, and more. HCM software will give an enterprise-level feel to your human resource department, whether you are a small business trying to better organize your staff, or a large company trying to organize the influx of new hires each month.
HCM Software can also be referred to as human resource software (HR software) or an HRIS software. Both types of options will provide core HR functionalities, such as payroll, attendance, benefits, and reporting. Some may argue that HCM systems are more advanced by including capital management capabilities such as onboarding and succession planning, however, many human resource systems will also provide these same capabilities. One can rest easy knowing that whether you’re in the market for an HR software or HCM software, they (for the most part) can offer you the same benefits.
*Create retention analysis reports in Workday HCM.
There are many benefits of HCM software, including less paperwork, improved accuracy, and reduced administrative tasks.
One of the most in-demand features of an HCM software, an employee self-service tool (ESS) lets employees handle any human resource-related tasks. This lets employees view their work schedule, check paystubs, submit PTO requests, and change their contact information.
A huge benefit of employee self-service is that the burden of updating employee detail is passed on from an HR staff member to the employee themselves. This frees up your HR staff members to handle more important details. It also eliminates any human-error, as more times than not, an employee should be inputting correct details about themselves rather than trusting an HR staff member to do so. Finally, one of the biggest benefits of employee self-service is benefits management. Employees can track their participation, eligibility, and statements for benefits and retirement. Open enrollment means employees can view and shop around for their preferred dental insurance, vision insurance, or health insurance plans.
To make sure your business is hiring the most qualified individuals for a job opening, you’ll need to implement a strong and efficient recruitment strategy. Recruiters want to spend time engaging with top talent and spend less time figuring out how to detail and record key information into a business management tool.
A feature found in all human capital management software is applicant tracking. The features offered within an applicant tracking tool provide a number of benefits that aid in finding the right employee for the job. One benefit is reducing the time spent on administrative tasks, such as posting on job boards and sending follow-up emails. Another benefit is automating the resume review process. If you receive a large number of applications for a position, an applicant tracking system can use specific algorithms to scan resumes and pick out job requirements you are looking for. This will help improve the quality of hire, speed up the recruitment cycle, and enhance the candidate experience.
To ensure your employees are succeeding at their job, it’s important for them to know exactly what their employer expects from them. An HCM software easily lets management personnel handle the talent that resides in the company. Performance reviews can be scheduled at periodic intervals to go over the recent work of an employee. If your company has integrated task management or scheduling tool, HR personnel can see how quickly a staff member is taking care of work being assigned to them. This information can be used in talks for employee raises and bonuses.
Not only will employees be able to increase their performance, but the company overall will be able to see a return on their investment from the improvements made to the staff. A recent study from Lighthouse Research and Advisory found that 86 percent of companies found benefits or an ROI on their human resource technology within the first 12 months after deployment.
Most ERP solutions will have some human resource capabilities built within the program. These functionality modules may be included in a base package or available as an add-on to your enterprise solution. The most common HR functionalities that may be offered through your ERP software include payroll, time tracking, and basic employee management.
If you are looking for more advanced human capital management features, the best course of action will be to integrate an HCM system alongside your ERP software. While ERP software can give your business “just enough” human resource features to get by, an HCM system will coordinate and configure the maintenance of your HCM data including employees, organizations, jobs, and locations. When important work depends on specific project staff, validation of project charges, approval routing, and more, you’ll want to ensure you have the proper software to manage yourself rather than hoping your existing ERP framework will sustain it.
Besides the unmatched capability that an HCM software will provide, there are other main benefits of having an integrated HCM and ERP solution: