What Is Human Capital Management?

Human Capital ManagementManaging human capital in the business world is one of the definitions of a human resource professional. In the world of business, especially large corporate enterprise, this term is more than a trendy catchword; it is the framework upon which companies are built.

What is Human Capital

Businesses must have capital to operate. Of course, there is the cost of start-up, but beyond that businesses must finance day-to-day operations. Fiscal management is the practice of using those monies wisely and efficiently. In the same way, managing human resources is the efficient recruitment, retention and utilization of personnel. Workday.com, a company which provides software to facilitate human resource management, says a big part of that utilization deals with acquiring and analyzing data on time management and absences, compensation and performance and benefits. It also includes recruiting, retention and talent management.

What are the Main Duties of a Human Resource Manager

Though the job responsibilities are labeled differently by various corporate entities, there are some common threads. Basic duties of a human capital manager can be grouped into six categories.

Recruitment Managers -Must design benefit and compensation packages, as well as sculpting workplace desirability, to attract the best applicants to the corporation.

Personnel assessment – This is the use of data on individual employees and teams to make selective decisions on hiring applicants, terminations, promotions and referral to programs that lead to job advancement. OPM.gov, includes time-tracking in this area as well as administration of tests to determine eligibility for advancement and the best use of personnel abilities.

Employee relations Managers – Must be able to develop and clearly communicate company policies and arbitrate grievances. They must also meet with other supervisors to predict or identify employee/management issues and facilitate resolutions. This may entail working with labor unions and knowing labor laws.

Training and development  – Human resource managers must also identify training needs in the company and either arrange for trainers to come into the business or present the training themselves. Among other topics, this training may center on skills needed for a certain position, on safety and company policy or on compliance with governmental regulations.

Benefits and compensation  – Besides monitoring company payroll, managers must plan and tailor benefits and compensation packages to aid both in recruitment and retention of employees. This is true because salary is only part of the compensation employees usually receive for their performance; also included is insurance, retirement, personal time such as sick leave, educational allowances, expense reimbursement and bonus allotments.

Talent managing – This includes using available data like performance records and personnel assessment to identify those employees who might serve well in another capacity, fill a vacancy or advance into training programs on a path to promotion. Although this area overlaps some of the other sections like recruitment, it also involves identifying people with exceptional potential and sharing that information with corporate supervisors so that they have the opportunity to utilize those employees in their departments.

Related Resource: Customer Relationship Management

Professionals in human resources are tasked with human capital management. The wise recruitment, development and retention of employees often makes the difference in a company’s success or failure in the business world. Many degrees can be paired with business acumen to enter this career because it involves psychology and understanding of financial issues.