Human capital management (HCM) is a business strategy that considers employees assets to their companies, rather than expenses. It requires investing in employees throughout the lifecycle of their employment to increase their value to their employers. Human capital management software helps it happen by automating, streamlining, tracking and enhancing the various aspects of an HCM strategy.
Traditional HR software focuses on automating the core administrative processes of HR, such as payroll processing and benefits administration. It helps a company run more smoothly and efficiently. HCM software includes these vital core processes but goes further.
Building on the foundation provided by automating HR’s daily operations, HCM helps to maximize the value that employees provide their company. HCM functions include talent acquisition, talent management, workforce management, employee engagement initiatives and analytics based on employee data.
Using HCM software can deliver many benefits. These include:
All HCM software systems are not the same. Here's what HR professionals and business owners should consider when determining which HCM solution suits their company’s needs.
When choosing an HCM software, there are many things to consider. This will be a process that won’t happen overnight. Before you begin, decide who will be part of the decision-making process and what their roles will be. Reach beyond HR management to include representatives of other key stakeholders, including the IT department and senior leadership.
The number of HCM software vendors you discover in your search may surprise you. To begin narrowing down your process, get clearer about exactly what you want to achieve by implementing an HCM system. Conduct a comprehensive analysis of your HR needs, assessing both current needs and what you anticipate requiring in the future. Identify the pain points and challenges within your present HR processes. Use that information to define specific goals and objectives and determine which HCM features are essential vs. nice to have. Although some nice-to-haves may have to wait, you'll want to keep them in mind for when the time is right.
Start by researching online and talking with people in your network to create a shortlist of potential vendors. Consider each one, checking to see that their systems have the features you need. Typically, those would include or support an array of foundational functionalities.
Core HCM functions, as in:
Talent management functions such as:
Employee engagement features, including:
Analytics and reporting capabilities:
HCM systems can be installed on your premises, on your company’s computers and servers. They're also available as cloud-based solutions hosted on remote servers and accessed via the internet.
A key advantage of on-site solutions is that your sensitive employee data doesn’t leave your premises. However, you will need to spend time and money to maintain and update the system. A cloud-based system will take care of maintenance and updates, including those that affect compliance. It is more easily scaled as your company grows, and it's more flexible. You should evaluate the advantages and disadvantages of each option as they pertain to your company’s needs.
The core functions of HCM software act as the hub of the system. This hub connects to other systems and applications that works together to enhance one another. To get the most out of your new HCM system, it must be able to easily integrate with your existing systems and be compatible with other third-party tools. Check for the availability of application programming interfaces (APIs) that allow these different applications to communicate with each other.
Look for a user-friendly interface and intuitive navigation. Many employees will only access the HCM platform once in a while. So, it's not good if they have to strain to figure out how to use it each time. HCM platforms should also be accessible via mobile devices and feature responsive design for convenient remote and on-the-go use.
You should be able to tailor the HCM system you choose to align with your unique business processes. Make sure it can accommodate your company’s growth and changing needs so you don’t have to rebuild or replace it as you gain employees.
Find out from each vendor how it will handle the implementation process, including employee records and data migration. Will the vendor provide comprehensive training for your employees and system administrators?
Your software should also align with any data protection regulations to which your company may be subject to. For example: the General Data Protection Regulation (GDPR) and the Health Insurance Portability and Accountability Act (HIPAA).
Find out what data security measures and encryption methods each vendor uses. Assess whether those will be adequate for your company’s needs.
The system you choose should not only function well at the outset. It should also run smoothly for as long as you use it. Evaluate the vendors' ongoing support services for your staff and administrators and understand how each provider will handle updates and upgrades.
In addition to reviewing an HCM system’s features, you should also find out more about each vendor you are considering. How long and reliable are their track records? Are they financially secure? Seek and check recommendations and customer feedback. Look at peer reviews and insights from third-party consultants and industry analysts.
Once you've checked all the preliminary boxes, get a hands-on demo.
Finally, obtain specific lists of the services provided, contingencies and costs from each vendor on your shortlist and compare them.
To calculate the TCO, assess all upfront, ongoing and miscellaneous costs. Consider licensing, implementation, training, support, and any obscure or potential expenses.
A good HCM software solution can provide significant benefits for your company. To make the most of it, you’ll need to find the right system for your needs. Don't rush the process. If you conduct thorough research and carefully assess the pros and cons of different systems, you’ll likely be rewarded with an HCM solution that serves you well long-term.
As you evaluate HCM providers, consider a comprehensive HR solution. TriNet's full-service HR solution includes, and generally surpass, what organizations typically gain from HCM software alone. We help you save time, access a full range of HR services, human capital consulting solutions, access big-company benefits, scale with you as your grow and more. Great systems and happy employees can translate to a rapid return on your investment.
Is a TriNet full-service HR solution right for you? Let's find out. Start by contacting us for more information and a free demo.
This communication is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance.
This post may contain hyperlinks to websites operated by parties other than TriNet. Such hyperlinks are provided for reference only. TriNet does not control such web sites and is not responsible for their content. Inclusion of such hyperlinks on TriNet.com does not necessarily imply any endorsement of the material on such websites or association with their operators.