Human capital management – Definition and Importance
An organization, where employees have better training, superior understanding of every procedures and overall job satisfaction, stands at a better place compared to its competitors. An organization that fails to invest in good human capital management practices or working with companies providing efficient management and HRadvisory services stays behind in competition and slowly goes out of business.
Treating employees as an investment is very necessary for a business. This means that one will need to respect them in the same manner as they respect anything valuable around them. This procedure is known as human capital management and effective handling can provide long term benefits in many ways.
Let’s find out the meaning and importance of human capital management.
Human capital management – A definition
Human capital management (HCM) is a process which involves systematically recruiting, managing and developing a workforce. Companies with strong HCM view its employees as assets upon which certain investment is needed so that their organizational value can be maximized.
HCM is usually managed by the company's human resources department. The internal HR teams generally look after who's hired, how they work in team and what arrangements should be made for their training.
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Why is HCM valuable
Organizations should treat HCM as a priority. It should not be a responsibility of the HR but the upper management should also understand its importance. Employees are the reason why a organization succeeds or fails. Their growth assures company’s growth and their value is not something to be ignored.
When management starts to value their employees, these individuals start to perform better. They start taking challenges and work better and harder. If the company doesn’t respect its employees then it is possible that the growth will be slow or the revenue generation will not meet its target.
How to improve HCM
Every business that lacks on employee performance front needs to prioritize and improve HCM. Here are a few ways to do it.
Conduct training and evaluation sessions to let the employees learn about their abilities and potentials
Let the staff members interact with the clients and let them go through the ongoing procedures
Companies should create a HCM culture. The employees should know about their value and importance of their performance
Companies can also outsource third party management and HR advisory services for better results.
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