In order to fully comprehend what human capital management software can do for your company, you need to know what human capital means. Human capital management (HCM) is a set of practices, related to the resourcing of people. These practices are focused on a company’s need for specific competencies.
Human capital management software and human resources management systems (HRMS) are often seen as compatible. This is not entirely correct. While their operations are very similar, they differ in strategy. The essential focus of the HCM function is to attract, hire and sharpen employees’ skills individually, so that a company can conscientiously build and nurture an optimal workforce for their own specific needs.
Human capital management software provides human resource managers with the tools to effectively communicate and define performance expectations and goals, and support continuous improvement for each employee. Within this context, human capital management software is different from human resources management, focusing on the professional growth of an individual as a lasting investment, rather than dealing mainly with the daily transactional functions typically handled by human resources management.
Companies and brands all over the world are strategically planning and positioning their internal productive resources so they can thrive successfully in the global knowledge economy. The growing importance of knowledge, as opposed to the traditional factors of production, is changing the nature of economic exchange everywhere in the world. The organizations that are able to master the production of knowledge and its conversion to tradable goods and services are topping the charts of economic growth and success.
But the knowledge economy is also related to human capital development and thereby human capital management software as well. As human capital can be defined as an engine for business growth, the success of any company depends on its ability to develop, organize and use its human capital through a powerful and practical human capital management software.