Human capital is one of the most important assets of a company – when companies know how to steward their people capital well. When they do not, then Human Resource Management, staffing, hiring and other people-based activities will remain an Achilles Heel for a company and will struggle to thrive.
Human resource isn’t a very hyped-up aspect of business management and operations. We like to talk about marketing, sales, and business expansion a lot. However, without human resources, it will be difficult to grow a company.
Good culture along with predictable and consistent structures play a significant role in good human capital management, but it’s not everything. A company also needs to use the right tools to help in human resource management.
What is HCM Software?
Many companies are turning to HCM or Human Capital Management Software over the past few years. An HCM helps a human resource manager, department, or stakeholder better manage human resource activities.
The goal of HCM software is to simplify the whole operation for managers by effectively performing repetitive and time-consuming tasks.
An HCM software is often also called an HRIS (Human Resources Information System) or an HRMS (Human Resources Management System). These tools offer a wide variety of features and functions that perform many administrative HR tasks faster and more accurately. Having this system in place can help improve HR functions without overwhelming your HR department from having to cover so many bases.
Benefits of HCM Software
Before discussing the vital features needed to make the most of these systems, let’s first look into the benefits of remote work software, specifically of HCM tools, that could revolutionize a business or an organization. The following are some of the most significant benefits that HCM software brings to an HR department and the company as a whole.
1. Increase Employee Engagement
Employee engagement remains to be one of the most undervalued metrics of company performance. It’s also a way to determine organization success.
Employee engagement isn’t always easy to measure and even harder to achieve. But with HCM software, organizations can better measure, analyse, and improve employee engagement.
Employee engagement and happiness aren’t at optimal levels for many companies and industries. If companies want to improve engagement, which will lead to better welfare and staff performance, HCM tools could be one big step forward.
2. Analyses Employee Efficiency
One of the major challenges that human resource departments have is setting metrics and measuring them.
Of course, there are many metrics that companies can track — attendance rates, tardiness, employee happiness scores, turnover rates, and so on but gathering data and crunching the information could take a lot of time. So when HR professionals become too busy to collect data, these activities that provide more clarity to the company get neglected.
HCM software can automate data collection, crunching, and reporting – helping HR managers better analyse employee efficiency and find ways to improve them.
3. Lowers Turnover Rates
High turnover rates are one of the leading challenges according to 47% of human resource managers. It keeps HR departments busy reacting to exits by constantly hiring to fill in roles at the expense of taking care of the rest of the employees. It’s a domino effect that hurts the whole company.
Human capital management’s goal is HR stewardship, keeping employees happy, engaged, and fulfilled at work so they can continue delivering results that will add value to the company’s customers, bring constant company growth, and bring upgrades to the employees’ careers.
Features to look for in your HCM Software
Now that we’ve discussed the primary benefits of using HCM software, let’s discuss how an HRIS system will help do that. Here’s a list of the top 6 HCM software features that improve HR operations, along with employee happiness and engagement subsequently.
1. Employee Information Management
Managing employee data doesn’t always feel like a significant HR activity. But sometimes it’s the small things that make a huge difference in human capital management. It’s remembering employees’ birthdays, keeping better track of work anniversaries, and monitoring benefits that they qualify for.
All these things point to one need — better information management. HCM tools help manage data and allow HR managers and staff to stay proactive in monitoring employee milestones. It also makes it easier to manage company personnel data, significantly saving time for HR managers in the process.
2. Payroll Management
HCM payroll management is also another significant feature that adds value to an HR department. By using payroll software, HR departments can save significant amount of time from manually tracking, computing, and disbursing payrolls. It also improves the disbursement process by shortening wait times and lessening payroll delays and errors.
Studies show that companies with over 100 employees will lose up to $23,350 a year due to payroll errors. Employees are also more likely to leave a company when there are payroll errors or delays.
Having a payroll management solution avoids any of these untoward incidents that could hurt the company and its personnel.
3. Time Tracking
Another HR activity that takes a lot of time is time tracking and attendance monitoring. Gone are the days that manual Bundy clocks and timecards were the most optimal way to track attendance. Even biometric scanners are no longer the most advanced in time tracking.
Some companies have started to use HCM solutions that supply cloud-based time tracking software that also aggregates all attendance information into summarized reports for human resource managers and personnel.
4. Recruitment and Onboarding
Up to 25% of onboarding programs don’t have any form of training or orientation. This malpractice leaves new hires confused, lost, and unequipped to succeed in an organization. Human resource managers must ensure consistent onboarding to enforce internal clarity.
HCM software also helps address recruitment and onboarding challenges by providing employees with a full wiki of company information and details. It can also help automate many parts of the onboarding process.
One way HR companies can do this is to set up a centralized onboarding channel where employees can read and learn everything they must to know about a company — from culture, history, policies, to organizational structures, major events, and so on.
5. Training and Staff Development
For companies to keep growing, they need to help their team members grow too. This need calls for better training and staff development.
HCM software should also be able to help by providing an internal Learning Management Solution to fill up with on-demand training that could improve employee skills.
The HCM tool can also take care of tracking employee training completion rates and providing automated reminders to those who must finish any prerequisite modules.
6. Business Intelligence and Analysis
Lastly, HCM software provides business intelligence and analysis software that can help track employee happiness ratings, performance, results and so on. This information can serve as a better way to track employee efficiency.
Human resource managers should use this available data to evaluate team and individual performance and address any performance lapses accordingly. These software solutions can give HR managers data dashboards that present these data in a clearer and more concise way.
Human Resource in the Digital Age
In the future of work ruled by digital innovation and hybrid work setups, tools like HCM software will become a prerequisite to better employee management. So, if you haven’t adopted these software’s yet, now is the time to start making initial steps to using these tools in your human resource operations.