In the last few years, there have been substantial changes in the way businesses are run. A more subtle shift has been happening in the way staff, team members, and employees are being managed. What used to be the traditional human resources or HR functions have transformed into something more holistic and empowering to the employee. This newer and arguably better way of managing people is called human capital management or HCM.
In the simplest terms, the HCM approach views people as assets that drive the business forward instead of the more traditional perspective of seeing them as part of the cost of doing business. The goal of HCM is to empower employees to better do their work.
Yes, there are still a lot of similarities in their functions. For example, like HR, HCM is expected to take care of recruitment, position management, compliance, and sometimes, payroll. The differences are nuanced but definitely impactful.
Of course, this shift is more than a change in the concept of people management. The rise in certain digital technologies is playing a big role in facilitating these improvements. Among them are automation and cloud computing. These technologies have been paving the way for more streamlined and overall better HCM processes.
With the automation of repetitive tasks, including data entry and processing, members of the department can focus on more complex and impactful tasks. This also minimizes errors and even compliance risks or policy violations. Automation makes reporting easier and even more insightful with quick data processing.
This also works well with the next digital technology highlighted in this article – cloud computing.
With software like Oracle HCM and Taleo, processes are streamlined, and information is readily available for stakeholders to access at any time, wherever they are. This sudden jump in efficiency also inevitably increases productivity in the department.
These technologies have applications in almost all facets of human capital management, including talent acquisition, onboarding, position management, payroll, and rewards. This frees up staff to give more time and attention to case resolutions and employee engagement.
Although it can be easy to see how automated processes and applications that are deferred to the cloud can be helpful for huge corporations, these technologies are also incredibly useful for small to medium businesses.
The most obvious reason is the budget available for these necessary tasks. Larger enterprises, of course, have more resources allotted for managing HCM tasks. Because of this, aside from leveraging these technologies, they can also hire teams to run them. With SMBs, budgets are limited, and every bit of increased efficiency can help in boosting the productivity of small teams. In this case, these digital technologies have a bigger impact on SMBs compared to larger companies.
Another important point is how expertise in HCM is also more accessible for big enterprises. For smaller businesses, they can leverage these digital technologies to simulate HCM expertise that would otherwise be too expensive to acquire.
Changes in the traditional HR model is facilitated by digital technologies that enable teams to focus on more complex and essential tasks. These technologies improve the efficiency and productivity of these departments. In SMBs, access to digital HCM is a must to improve people management.