By Jana Reserva
Nov. 1, 2022
Think about all the resources it takes to successfully manage your organization. Which of these resources is in the shortest supply? Time is certainly one of them — once you’ve lost a day, you can’t get it back. Financial capital is another tempting answer — but is it really that hard to apply for a loan or build a strategy toward growth when all is said and done?
No, the Harvard Business Review writes. Financial capital is not your most limited resource. “Today’s scarcest resource is your human capital, as measured by the time, talent and energy of your workforce,” it says.
It’s significantly more difficult to continuously find high-performing employees who can deliver quality work for your organization. While an asset like time or money is generally fixed, the same isn’t true of human capital. One dollar or one hour is functionally the same from one to the next, but employees are unique. Once you lose a good employee, you can’t automatically swap in an employee who will continue performing at the same level.
According to Gallup, it typically takes new employees an entire year to reach their full potential after training and onboarding. And it’s costlier to replace workers than it is to retain them. On average, companies spend about half to two times an employee’s annual salary to completely replace them.
But your employees aren’t just your scarcest resource. They’re also your organization’s most valuable and influential resource. And the best way to retain that resource is through a human capital management plan that helps your employees feel supported and fulfilled when they come to work.
Human capital management (HCM), as its name suggests, is an area of business management that ensures a holistic experience for an organization’s most important resource — its people. There are five main areas for HR professionals to focus on:
Recruitment is the core foundation of building an organization’s human capital. It is involved in identifying the needs of the company and the particular roles that can fill those needs through talent acquisition. Attracting, screening, and onboarding candidates are all part of the recruitment process. The goal of the recruitment process is to successfully find candidates whose skills, values, and motivations are aligned with the organization’s goals and culture.
Compensation and benefits refer to what the company gives its employees in exchange for their work or service, and they include monetary and non-monetary components. A company’s compensation and benefits package includes an employee’s salary and government-mandated benefits. Other perks and incentives can be part of the deal, such as insurance coverage, gym membership, housing allowance, and company-sponsored trips and events.
Running an organization is governed by employment laws. HR teams create company policies and administrative functions that comply with labor regulations, such as accurate time tracking and paid sick leave. Labor law regulations vary by region, and they can change from time to time. That being said, a crucial part of human resource management is staying on pace with these changes and ensuring that company policies remain compliant.
Training and career development focus on nurturing your workforce’s potential, especially new employees who are still onboarding. Training refers to programs that are geared toward improving skills or learning new technical knowledge that’s needed to perform certain tasks. Meanwhile, development is focused more on programs that enrich an employee’s overall growth in soft skills like leadership, communication, and adapting to certain situations.
Human resource management (HRM) is also involved in creating strategies to keep employee turnover to a minimum. Retention and engagement programs are proactive steps to ensure that employees are motivated to perform their best, not just for a paycheck but because they have a clear alignment of values with the organization. All of these parts should move cohesively to ensure the best experience possible for staff at every stage of the employee lifecycle.
Human resource management involves a lot of moving parts, and these can come with their own sets of challenges. Here are common challenges in human resource management and ways to solve them.
Delays in hiring can be costly, but an unfit hire can also be detrimental to an organization. So how do you know a candidate is fit for the role? While skills and experience are important for assessing whether an applicant is qualified or not, it’s also essential to find out if they’ll fit into your company culture, so you can be sure your workplace is the right fit. Otherwise, you won’t be able to retain them for very long.
Another common challenge is convincing candidates who are highly skilled and qualified yet more deliberative in their job search. These candidates are most likely in touch with a lot of recruiters and are considering more than one job offer. You’ll have to build a truly impressive candidate experience — and a great employer brand — in order to stand out and attract top talent.
How to solve:
Human resource management deals with a lot of information — from employee details to company policies and other essential business documents. And too much paperwork can be a burden, especially when done manually. It can take time away from more valuable tasks, like strategizing and optimizing programs and processes.
How to solve:
There are digital solutions that can remove the tedious task of processing paperwork. For instance, digital employee onboarding solutions help eliminate the long forms that new hires need to fill out. They enable new staff to log in with their information and upload important documents online. This ensures better accuracy of information, improves the employee experience during onboarding, and allows for a better way for new hires to spend their first day at work.
Staying compliant with labor laws is a must. However, understanding regulations, applying them in policies, and staying on pace with labor law changes can be very challenging.
How to solve:
Implement a compliance strategy to avoid any potential financial and reputational repercussions of failing to comply. A compliance strategy is a set of programs and processes that’s geared toward ensuring regular updates and audits of policies and communicating any changes with staff promptly. Given the ever-evolving nature of regulations, it’s best to build a strategy and assign a working group to focus on compliance.
Technology is also helpful in staying on pace with changes. For instance, some solutions automate labor law updates and ensure that these are reflected in the payroll computation.
Talent management goes beyond just attracting the right people for the right roles. The other part of the battle is retaining them and keeping them satisfied with their role, especially those who are performing above and beyond.
How to solve:
It’s all about consistent growth and learning. Employees are more likely to stay the course when they are given opportunities to grow and are recognized as a vital part of the organization’s success.
Training and development programs are essential for retaining employees. But creating these programs is not a one-time thing. That’s why it’s important to have regular alignment meetings with your staff. Regular check-ins can help you get a pulse on their current sentiment about working at the organization, their satisfaction with their roles, and the challenges or gaps they’re facing. From there, you can customize programs or identify next steps that can help them stay engaged.
One of the things to keep employees happy and help them feel valued is to provide not just what they need to get their job done but also offer other incentives that will motivate them to perform better and stay aligned with the values of the organization. Your benefits administration can show employees you care about more than just their performance, for instance. Succession planning is a great way to engage employees who are growing in their current roles while preparing for employees who may eventually move on.
Human resource management plays an important part in employee engagement, and it is a continuous process throughout every stage of the employee lifecycle, from onboarding up until the time an employee leaves an organization. All of these stages affect culture, staff morale, and the success of the company.
An organization is only as good as its employees. It’s imperative to nurture and cultivate staff no matter where they are in their tenure with the organization. Doing this takes time. That’s why it’s important for human resources to have the right technology in place so that they can reduce time spent on administrative tasks and focus more of their energy on engaging employees.
How to solve:
An effective onboarding process can help you engage employees who are new to the organization and need to get up to speed — without overwhelming them. Ongoing training sessions, team events, perks, and upskilling opportunities are all great ways to help your workforce stay connected at work while growing in their careers.
Ultimately, you should look at your employee data, like plan enrollment and activity engagement, to see what HR processes and initiatives are having the biggest impact on employee retention and where engagement can still be improved. Then you’ll know which programs to add and continue to invest in.
Manually keeping track of the key HR processes to support your human capital management strategy is bound to cause headaches — for your team and your workforce. Many companies implement HCM software in order to manage employee engagement programs, track performance and productivity, and provide things like onboarding and benefits to employees.
Workforce.com is a workforce management software that provides visibility into your scheduling and shift data, so you can better manage your hourly workers. You can accurately forecast demand, optimize labor costs, and build the best schedule for your team based on real metrics. And our solution integrates directly with other human resource information systems (HRIS) to streamline human capital management.
Read more about how Workforce.com optimizes how you manage your human capital by checking out our HCM software buyer’s guide below:
Schedule, engage, and pay your staff in one system with Workforce.com.
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