When one considers human capital management (HCM) technology, it may seem somewhat ironic to leave your company’s choices about its human employees to an automated piece of software. However, the fears are largely unfounded as the crucial decisions are almost always made by flesh-and-blood, HCM managers or business owners. Still, HCM technology can certainly lend a decided advantage to the company that embraces it.
While the inherent benefits of HCM technology should be evident, small business owners must also have a firm understanding of the technology in order to gain the most benefit from their investment. Here are four best practices for utilizing HCM technology that will ensure the greatest return on an HCM manager’s time, energy and human capital resources.
1. Capture Your “People” Data
Capturing and archiving relevant employee information from day one is critical for optimizing your HCM processes. An evaluation of this data can guide you in areas as diverse as recruiting and girting through training to the proper allocation of your human capital. The end result is less costly hiring, more efficient training, better morale, lower turnover and, ultimately, higher productivity. While it is possible to accomplish this goal with a physical file system, the implementation of an HRIS software solution is far more convenient, allows greater access and is substantially more effective.
2. Empower Your Managers
It is common knowledge that many small business owners have difficulty in relinquishing control of many responsibilities within their organization. Not only does this habit create enormous pressure for themselves but also causes bottlenecks within the company and, in many cases, a significant loss of productivity.This situation is usually avoidable as the managers who are waiting for answers are often in a better position to make the decision.The use of HCM technology can gate-keep these functions, monitor the process and create reports for the owner or the HR manager. The bottom line is that the upper level managers need only review decisions and not spend inordinate amounts of time making them.
3. Maximize Your Company’s Talent
Employees are the key to the success of the vast majority of companies and yet many businesses treat them as replaceable items. Instead of nurturing the best, they simply accept mediocrity as the norm and the endless cycle of hiring and firing as the cost of doing business. More savvy business owners recognize the strains on time, money and other resources that this inefficient process takes. The use of HCM technology can allow a company to not only recruit and hire the best people but also properly train them and place them in the most effective positions. In addition, it allows for the identification of the weakest performers and their ultimate disposition.
4. Impact Healthcare Costs
The re-election of the Obama administration means that the Patient Protection and Affordable Care Act will affect the bulk of businesses, small and large, in the United States. Recent headlines in the news indicate that many businesses will downsize to accommodate the new regulations. There are other options that help reduce healthcare costs that can be implemented using HCM technology. The use of an HRIS guided wellness program or the use of a professional employer organization (PEO) to liaison with your healthcare insurer can produce significant results by lowering expenses. A PEO brings immediate relief in the form of lowered premiums while an HRIS can reduce employee use of the healthcare system and produce continuing cost reductions.
Best Practices and HCM
The decision to implement a particular HCM technology should be made after careful consideration of the costs and the ramifications of the process and the solution. As usual, the costs and disadvantages will spring easily to mind while the benefits may seem less apparent. While an HCM will yield immediate cost reductions in the HR department, the “soft” benefits are far more important. In particular, better morale and lower turnover will yield greater productivity and lessened hiring and training costs. In addition, a more professionally managed process will also result in less employee issues related to discrimination and harassment. Lastly, the use of best practices in HCM technology will leave you, the business owner, free to concentrate on the more important aspects of your business.