human capital [n.] Human capital defined is the combined abilities, knowledge, or other strengths of people that are used to create economic value for employers. Syn. employees, workforce, staff, team
We’ve all seen the term “human capital” a lot over the past several years. Human capital management, or HCM, is the practice of guiding your employees through the employee lifecycle, from the time your recruiters are seeking them out in order to fill a job requisition to the time they separate from your company. Human capital management lies in three central focus areas: employee acquisition, employee management, and employee optimization.
The ultimate goal for these three areas is to invest in your human capital to keep them both happy and engaged. There are several ways to go about doing this, by using what we’ll call “soft” methods and through HCM technology.
Investing in Human Capital Using Soft Methods
It’s easy to put into practice small, relatively inexpensive (or free) incentives and processes to help ensure your employees stay engaged, such as:
1. Foster an open-door policy.
When employees feel as if they are cut off from their managers – whether it’s physically or due to lack of open and honest communication – resentment can quickly build, resulting in an unhappy and disengaged workforce. Ensuring that your physical capital, your employees, have easy access to their managers (and each other) helps promote a welcoming company culture.
2. Establish well-defined job expectations.
Have you ever worked for someone who was incredibly vague in outlining the responsibilities and tasks of your job, leaving you hanging and wondering what the heck you were supposed to be doing? Don’t do that. Employees want to know what’s expected of them, so be sure you invest in appropriate training and process manuals. Most members of your workforce, especially Millennials, also want to understand how their jobs relate to and affect the business as a whole.
3. Provide educational and career growth opportunities.
Human capital development programs such as classroom training and virtual courses are two popular ways used for helping employees enhance their skills. Additional opportunities to consider that don’t require a lot of expense or effort (on your part) include: assigning stretch goals, executive mentoring, and attending networking events.
4. Offer telecommuting if it works with the role.
Giving employees a flexible schedule that includes working remotely provides them with a work/life balance that many of them value.
5. Food, Glorious Food.
Everyone likes to be treated to a fun time, such as a Friday Happy Hour or a weekly lunch… especially when it’s on the boss’s dime. You could consider themes such as Taco Tuesdays or Food Truck Fridays.
HCM Technology Needs to Be Part of Your Capital Investment
The other side of the coin when it comes to investing in your people is your company’s technology. We’re not talking about giving all of your employees the latest laptops and iPhones; we’re talking about improving your human resource technology and processes. Today’s hyper-digital economy demands tools that can support critical HR functions while at the same time, improve employee attraction, engagement and retention.
The Recruiting Game
The way candidates apply for jobs is changing. They’re no longer willing to spend hours of their time filling out job applications – or worse yet, uploading their résumé only to find out that an outdated careers page requires them to type in the same information that’s on the résumé they just submitted. And, they don’t always apply for a job from a computer. Reducing barriers for potential employees to apply for jobs can help you increase the number of candidates in your recruiting pipeline, while at the same time improving the user experience from the first touch.
The Onboarding Experience
Contrary to what a lot of people believe, onboarding newly hired employees should begin before the first day on the job. But you can’t really do that if you’re stuck with outdated processes. Your new employee shouldn’t have to spend the majority of their first day filling out a bunch of paperwork. HCM technology can help you engage employees early – before their first day – by sending company information, handbooks and other policies to them before they start so they can feel prepared and engaged right away.
An HCM solution offers simple ways to let managers help and keep in touch with their employees, all without having to go to the HR middleman. Tools such as employee self service, where employees can easily make changes to their payroll deductions or enroll in a benefits plan, take the burden off managers and give employees control. Additionally, performance reviews, once a dreaded yearly event, can be automated enabling employees to enter their goals and objectives and letting managers review and approve. And, all of the information is stored in a single, connected database.
Effectively managing human capital can have a significant impact on the economic growth of your company. As the face of the workplace evolves, businesses must adapt and step into today’s world, leveraging technology that enables them to better attract, engage with, manage, develop, and retain the very best talent. By investing in HCM technology, you’re investing in your most important resource, your people.
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