Human Capital Management – What it Means
Human capital management (HCM) is by definition an approach to employee staffing that perceives people as assets or human capital whose current value can be measured, and whose future value can be enhanced through investment.
Today’s changing workforce, global competition, advances in information technology and the demand for sustainable performance has made it necessary for corporate leaders to examine and re-evaluate how they manage and operate.
The key objective of any company should be to invest in its employees through training so that they become efficient resources later on. In human capital management, employees are treated as important resources rather than laborers. They play an instrumental role in the productivity of the organization.
The term “Human Capital” was introduced by A. W. Lewis in “Economic Development with Unlimited Supplies of Labour”. Broken down to the core meaning of each word, the term and what it stands for becomes clear.
Human, of course, is simple. It means people or in this context employees. Capital refers to goods, services or funds that enable an organization to deliver high quality output. Capital acts as a catalyst to increase productivity.
When the two words are used in conjunction, they refer to the employees who contribute to the success and productivity of a company or business organization.
Employees spend their work week striving to achieve the goals and objectives of the company. A valuable asset, employees are the lifeblood of a company. It can’t run without them.
For this reason, it only makes sense that a company should invest and motivate their employees. In return, the employees develop a bond or personal investment in the company. Because of this, they endeavor to deliver their best.
Human Capital Management
In layman’s terms, human capital management is the act of effectively managing the workforce of a company. It is the process of obtaining and properly training employees allowing them to significantly contribute to the company’s productivity.
Effective human capital management enhances an employee’s existing skills with further training. This extracts the very best of their talents, increasing their productivity and the value of their contributions.
Ensuring the growth and development of each employee is important and a major objective of human capital management. This proves their value to the company, resulting in increased retention and the company’s overall success.
Benefits of Human Capital Management
Developing and implementing a human capital management strategy can be a significant change in how a company acquires, cultivates and retains their employees.The time and effort put into this strategy can reap valuable benefits.
Human capital management enables the human resource professionals to hire the appropriate candidate for an open position. Proper talent acquisition is a critical function of human resources.
Human capital management allows for open communication and the free flow of information between superiors and subordinates. This leaves little room for confusion or misunderstandings.
Human capital management provides training and skill development necessary to enhance employees’ existing skills. It is vital that employees are up to date on all the latest advances in their field.
Human capital management emphasizes the importance of soft skills and personal development for employees. A candidate who knows how to present themselves and has good communication skills can become a valuable employee.
Human capital management facilitates the improvement of employees in areas which they feel they are lacking. This benefits the entire company as well as the employee.
Micro Data Systems is a business and technology solutions provider founded in 1992. For nearly 25 years, clients have looked to us for customized staff support and project-based staffing.
Our IT talent sourcing specialties include Data Science/Big Data, Application Development, Help Desk, Systems Administration, Network Engineering, and Project Management.
We go beyond the initial steps of recruiting and staffing to prepare our consulting employees for success. Our regular follow-up and personal contact with our consulting employees help to keep them satisfied in their position through an open channel of communication and creates the additional value our clients look for in MDS’s Human Capital Management services. Contact us for all your IT talent sourcing and human capital management needs.