Human Capital Management (HCM)

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Human Capital Management (HCM) takes people management to the next level. It is a tool that if used well holds the potential to catapult the performance of an organization and greatly increase its market value. HCM is a relatively new process-driven discipline that looks at people as value-adders to an organization. Strategic investment in these assets can greatly increase the business performance and prove to be a source of competitive advantage.

HCM is a unique process in that it fosters a sense of commitment in the employees and does not merely lead them to compliance, simply for the sake of falling in line. The value additions through investment in people are then quantified in monetary terms using advanced metrics. Data, or rather high quality data, is the backbone of HCM. The process is largely concerned with facts and figures related to the human ‘potential’ of the organization. Translating this data into a strategy for harnessing the potential and deriving monetary value from this exercise is precisely the objective of HCM.

The New Standard

A firm who decides to set HCM in motion indicates its ambitious character and a futuristic outlook. In fact, for larger organizations, there is no alternative but to incorporate HCM into its functioning for increasing the chances for sustained growth. However, since the discipline is relatively new, it will be better for corporations to educate themselves and acquire a sound understanding in order to derive maximum mileage out of it. HCM is all about collating, analyzing, reviewing and generating reports about data pertaining to human capital in a business environment. It can help with strategic decisions in regard to investments, direction of growth etc. It is basically a process that recognizes people as value-creating assets and promotes a culture where every individual’s uniqueness is valued. The areas of employee engagement and retention, training, learning and development receive special emphasis under a broader umbrella of talent management.


HCM professionals can use sophisticated charting software] to give their data an intelligent turn and reveal comprehensive yet concise details from across an organization, irrespective of its scale of operation. This information can be used to effectively develop a blueprint for next generation changes in the organization.

HCM measures and evaluates the HR processes and practices in an organization. The real challenge lies in how the human capital or human potential can be measured effectively to be aligned properly with organizational goals and achievement of better performance. It should be noted that it is the difference in human potential that ultimately decides the market capitalization of a firm. Otherwise how could one explain the wide gaps in stature and performance, when access to the same technology, financial resources and markets is uniformly available?

Wider Scope

HCM is in fact a holistic system that does not merely concern itself with the internal public but to the external sphere also. It extends its scope to see how customer satisfaction can be increased using the human interaction with them effectively. HCM professionals can get the perfect fit to tackle specific markets with the help of specific employees to render a better customer service experience. Use of charting software that gives a wide angle view of the scenario and competencies of individual employees is especially relevant in this case.

Better customer service engenders trust which translates into monetary value, reflecting adequately in the share value of the firm. Customer feedback and preferences can be recorded and steps can be taken to develop a relationship and long term trust.

Because HCM involves number-crunching along with strategizing, the set of dedicated and specialist HCM professionals is still in its evolutionary stage. At this stage and even beyond, software that can work through incredible amounts of data and generate scenarios to choose from can be of great help.

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