Human capital management (HCM) is a vital element in the success of any business. Finding the right methods and strategies in this space can drive you to greater results thanks to an efficient, productive and engaged workforce.
But as well as focusing on the benefits and opportunities of HCM, you need to be prepared to overcome the common challenges that today's businesses face in this area.
Common human capital management challenges
1. Talent acquisition and onboarding
Identifying and acquiring the right talent is a constant priority for many businesses, particularly those that are feeling the effects of growing skills shortages.
Devising an effective HCM strategy can help you improve your talent acquisition in various ways. Dedicated software can offer benefits like:
- Automatic filtering of applications based on certain criteria, such as skills and experience
- Identification of the recruitment channels most likely to provide engagement with valuable candidates
- Tools to measure and analyze candidate engagement
Onboarding is another essential step in successful talent acquisition, since you want new arrivals to make a positive start to their role and become loyal, productive employees.
One of the most valuable steps you can take in improving the onboarding process is to collect feedback from employees, which will give you a frontline view of procedures that work well and ones that need to improve.
2. Strategic workforce planning
It's important to incorporate a strategic element into your workforce planning. The HR department needs to track metrics such as turnover, time-to-hire, and headcount, but it should also take a long-term view to help the business prepare for potential future challenges and opportunities.
You can improve your strategic workforce planning by looking at your human capital in the context of the long-term goals of the organization as a whole. Is the labor force designed and equipped to help the business reach these objectives?
It can also prove highly beneficial to visualize, anticipate and prepare for certain scenarios before they become a reality. Analyzing data and studying trends in your industry will help you make informed forecasts and get your workforce ready for the future.
3. Leveraging workforce analytics
Effective workforce analytics is a critical part of HCM that can significantly contribute to the company's understanding of its human resources. However, for many businesses - particularly smaller firms with limited budget and time to dedicate to these sorts of activities - getting to grips with complex data sets is a daunting challenge.
Introducing specialist HCM software will put you in a stronger position to realize the many benefits of analytics, which can range from quicker hiring times to a more detailed understanding of how your people are performing and where additional training is required.
To get the best out of analytics, first you need to have a clear idea of what data is available to you and whether the information is accurate and up to date. A data audit can help you make these conclusions with maximum speed and efficiency.
4. Training and development
There are various advantages to be gained from ensuring your training and development programs are fit for purpose.
Employees who are constantly learning new things and expanding their skill sets will feel more engaged and committed to their employer, which supports productivity and reduces turnover. The business, meanwhile, benefits from a more diverse talent pool and could also save money by upskilling existing staff rather than recruiting.
Like many aspects of HCM, training and skills development can pose a big challenge to the HR department, which needs to show that investment in this area is delivering returns.
One of the key success factors is a data-driven, targeted approach to training, taking into account:
- The skills that already exist in the workforce
- Staff interests and the things people want to learn
- Where the business has the greatest need for additional skills and expertise
It's also vital to have metrics and follow-up procedures in place to gauge the effectiveness of your training and development programs.
5. Change management
Mismanagement of change is a common hazard that the HR team needs to be particularly wary of, seeing as the individuals that make up the workforce are often the ones most affected by decisions and strategy changes dictated by the C-suite.
If a new HCM platform is introduced, for example, preparing people for the impact this change will have on them and their day-to-day work should be one of the key priorities of the project management team.
There are many other types of organizational change that can have a big impact on the workforce and its productivity, particularly where new technologies and concepts like automation are concerned.
Being proactive and anticipating change, rather than simply reacting to it, is an invaluable quality that can raise your HCM standards to the next level.