Human Capital Management (HCM) is the strategic effort to manage the entire employee life cycle and core HR functions. When successful, HCM efforts result in high return on capital investments or to put it simply, engaged and committed staff who drive productivity and revenue. If only it were that easy.
HR leaders understand an effective HCM effort is a transformative undertaking that starts with the HR department. Management consulting firm McKinsey & Co. interviewed more than 80 chief human resources officers (CHROs) at large organizations in the U.S. and Europe and found “more than 90 percent predict significant changes to the HR operating model during the next two to three years.” The McKinsey article goes on to say that the new expectation of HR is to bridge the workforce and the organization as a strategic, agile partner that can take transactional data and turn it into business insights and recommendations.
Management consulting firm Bain & Company surveyed HR leaders who cited unintegrated tools and data sources, lack of functionality, and a poor user experience as the culprits for HR’s top three pain points within three key HCM areas: workforce planning and staffing; career management and planning; and compensation, benefits, and rewards. As part of their HCM transformation efforts, companies are intent on addressing these technology roadblocks through HCM systems. Fortune Business Insights forecasts the global HCM market to grow from nearly $29 billion in 2023 to nearly $54 billion by 2030.
Optimized systems and processes are the antidote to roadblocks getting in the way of effectively managing an organization’s human capital strategy and elevating HR leaders to strategic business partners. Through optimization, the HCM strategies, systems, data, and processes are aligned and integrated. The HR and Finance departments are no longer enmeshed in the administrative burdens of managing and piecing together data from disparate sources and reports.
An HCM strategy aims to ensure you hire the right people, keep them growing, reward them appropriately, and efficiently manage all aspects of the human resources function. If you can execute on your HCM strategy, you’ll see your revenues and top talent grow. Delivering on that strategy however requires stepping back to see how the experience is now for your employees, whether you have the data to advance your strategy, and how much time is spent on manual work that could be automated. Once you’ve done that deep analysis, you can then get to the work of optimizing the processes and systems necessary to delivering on your strategy.
Not sure where to start? See the way forward today. Ask our employee benefits experts for more information or download our latest white paper, Human Capital Management Optimization – A Catalyst for HR Transformation.
With more than 10,000 clients managed across our National Employee Benefits Practice, Risk Strategies delivers the high-quality, cost-effective, and compliant benefits programs and solutions employers need and employees value.