Harnessing the power of human capital management

The global economic downturn has given organizations a renewed impetus to optimize profits, boost revenues and uncover new sources of value locked within their businesses. At the same time, it is driving a back-to-basics return to the core values that underpin the success of organization.

A growing number of companies are now recognizing that their employees are far more than just an overhead; they represent intellectual capital with a very tangible value to the business. But this intellectual capital has to be carefully managed to ensure an alignment between corporate strategies and the goals of individuals within the organization. This is where human capital management (HCM) comes in.

Fundamentally, HCM is all about fostering, growing and utilizing an organization’s intellectual capital by giving each employee the tools they need to achieve their full potential. A key part of this strategy lies in creating a competent and motivated culture by initiating reward strategies and developing people who are proficient at effectively generating and disseminating knowledge. This means identifying and implementing methods to acquire, manage and retain intellectual capital across role, operational and personnel changes.

Organizations invest huge amounts of time and money in recruiting and retaining high-calibre employees. Yet relatively few recognize that the knowledge possessed by these employees is a critical source of competitive advantage for their business. Companies that fail to fully grasp this can leave themselves dangerously exposed to financial and personnel losses that are hard to recoup. Yet those who recognize the strong correlation between employee performance, personal growth, performance integration and corporate growth gives companies the basis upon which they can tie resources directly to profits.

For any company thinking of HCM, it’s vital to realize that a successful programme does not begin and end with the human resources department: it affects every facet of an organization. A truly effective HCM programme needs be applied across all business components, divisions and functions.

As intellectual capital is spread throughout an organization, associating every aspect of employee intelligence including performance, knowledge, documents and skill sets to one another is a crucial and necessary means of achieving measurable results. Without such a plan or implementation option, the ability to quantify a return on human capital investment cannot be achieved.

What’s more, a culture that can support widespread resource involvement through knowledge centralization and sharing recognizes that not only employees but customers, partners and vendors are critical to maximizing value of intellectual capital.

Project management is required for redefining corporate goals and participants with achievable deadlines. Workflow management is required to determine resource availability and to align and monitor activities to pre-set goals. Contact management is required to research and update customer accounts. Knowledge management is required to store all related sales tools in relation to business close and provide management with strategic indicators for success and reporting. Finally, human resource management is required to define the type of role required and track personnel activity against reward incentive.

All of these management processes are necessary components to facilitate the role of HCM as a central support system of knowledge rather than an isolated business function. In order to make intellectual capital a tangible and profitable reality with measurable success factors, information and processes from all points in the enterprise are required.

A successful HCM process needs to be underpinned by a single, centralized knowledge base that incorporates all business processes across the organization. Recognizing how each component of the organization contributes to HCM during planning, support and management is the key factor in attaining success. A single, centralized source allowing management of, and access by, both internal and external resources, can be a comprehensive mechanism for self-service, performance tracking, strategic management and intellectual measurement by an organization.

When implemented across an organization, HCM can lead to lower staff turnover, better recruitment decisions, closer alignment of strategy with job development and tangible financial return on investment. By instituting a practice that facilitates the integration of workflow, projects, documents and contact management, corporations can utilize technology to enable and empower HCM practices rather than relying on a solution masquerading as a silver bullet.

HCM has become a mainstay practice by leading companies that look beyond human resources as an expenditure but rather as an entity of knowledge and assets that can be capitalized upon to create a strategic value partner within the organization. Incorporating a new process methodology that increases productivity with expected ROIs contributes directly to a company’s financial health.

By successfully implementing a company-wide HCM programme, organizations can position themselves to exploit the priceless intellectual capital represented by their employees, while at the same time improving workforce performance, instilling human resources as an organizational value-add and most importantly, recognizing that people are a valuable asset that can drive profit.

Source: Jamie Stewart, Director, Exact

http://www.globaletm.com/content/harnessing-power-human-capital-management