By Cassandra Balentine
The workforce is becoming more complex, with a mix of multiple generations, new technologies, and evolving cultural expectations, it is increasingly difficult to manage employees in a manner that works for everyone. Human capital management (HCM) systems are utilized to manage employees, track productivity, and improve morale.
Core Functions of HCM
An HCM solution should first and foremost provide the organization with the ability to create efficient plans to support the business. “This includes building efficient and useful schedules, but it also means supporting the staff’s needs when it comes to work/life balance. Ultimately, by getting the appropriately skilled employees in the correct place at the time they are needed. HCM solutions should have a dramatic impact on the overall efficiency of the enterprise,” says Dave Hoekstra, workforce management evangelist, Teleopti.
Morne Swart, global product strategy and transformational leader, SumTotal, believes that an HCM solution should provide human resource (HR) organizations with the technology necessary to address all areas related to managing talent at an organization. “Critical areas of functionality for an HCM solution include talent acquisition, learning management, compensation, performance management, and succession planning.
It can be difficult to differentiate between strategic and tactical tools designed to simplify and streamline HR tasks. Chris Mullen, PhD, SPHR, SHRM-SCP, HCM Evangelist, Kronos Incorporated, admits that for HR practitioners it may feel impossible to determine which solution will deliver better insight into what is going on in the workforce.
“Most HCM solutions on the market today span the entire employee lifecycle, from talent acquisition and onboarding to talent and performance management, core HR, workforce management, and payroll. While HCM solutions may all seem very similar, there are three core functions organizations should consider during the evaluation phrase,” suggests Mullen. These include a unified platform, modern design, and industry/vertical specific.
HCM solutions should be built on a unified platform with a single line of code. “This provides the organization with a single database for each employee record across the entire employee lifecycle. On a tactical level, this will save time and reduce errors by eliminating the need for manual duplicate data entry. On a strategic level, it provides a true, real-time view of information,” explains Mullen. “Organizations should ensure the solution they’re considering is a true unified platform, not a loosely integrated suite of cobbled together solutions presented as a single platform.”
HCM solution should also be designed to meet the needs of the modern workforce. “They should feature a responsive design that recognizes the device the user is on—whether it’s a mobile phone, tablet, or desktop—and allow them to complete all of the actions most important to them. They should also support the needs of hourly and salaried employees,” offers Mullen. These types of personnel have very different needs when it comes to scheduling, flexibility, and performance management.
Finally, organizations should seek HCM solutions that meet the specific needs of their industry. “Running a manufacturing plant is dramatically different from running a retail store, and both of those are different than a field services operation. There is no one-sized-fits-all approach, which is why organizations should leverage a solution that understands their specific nuances,” shares Mullen.
HCM’s Role in the Modern Enterprise
HCM solutions help HR and business leaders manage and drive talent across the entire organization.
Hoekstra believes the big picture can often become lost when implementing an HCM solution. “It is rarely looked at as a planning tool instead of an efficiency tool. For example, HCM is often implemented to reduce the amount of work it takes to generate schedules, but often overlooked is the solution’s ability to anticipate needs before they happen.” He says the ability to combine powerful forecasting elements with efficient scheduling tools enable enterprise organizations to realize vast improvements that may not have existed without good planning tools.
Mullen comments that HCM solutions work to either strengthen or damage the employee experience. “It should empower all users—whether they are a frontline worker operations manager, HR practitioner, or senior leader—to access the information and data important to them in real time and guide them with proactive and predictive recommendations. However, unmatched functionality and industry experience will win fans among the tech savvy, but features will be meaningless if they’re not intuitive and easy to use.”
Additionally, he points out that the user interface should simplify job searches and streamline the application process by enabling applicants to quickly and easily apply online. Modern technology, such as chatbots, should be used to enhance the applicant experience without alienating candidates.
Another attractive feature is intuitive self-service tools that let employees and managers address common HR, time keeping, and payroll tasks as quickly and easily on mobile devices as they can on their desktops. “The ability to perform routine tasks like changing an address, requesting time off, or swapping shifts from the convenience of home or on a mobile device can significantly impact the employee experience,” says Mullen.
He says that research indicates that when employees feel empowered and have a sense of ownership in their jobs—in other words when their employee experience is a positive one—their engagement is significantly higher. Self-service tools enable this, streamline processes, and allow managers to have more time to focus on employee development and satisfaction.
HCM solutions should also provide access to actionable information that has historically been trapped within disparate systems across an organization, allowing users to recognize and take action on important trends like retention and flight risk, productivity and performance, engagement, succession planning, and many others, adds Mullen.
Trends Driving Evolution
Many technology trends—from the cloud to artificial intelligence and machine learning—affect the capabilities of modern HCM. Cultural trends also play a role.
More than ever before, employees seek support from their employer as they negotiate work and life. “We can order a package on Amazon from the other side of the country and have it on our doorstep in two days, and we can instantly book an Airbnb on the other side of the world. Yet employees are still forced to wait days—and sometimes weeks—for a simple time-off request to be reviewed and approved,” suggests Mullen.
Simple business economics are also driving the evolution of HCM tools. “Organizations are tasked with providing the highest level of customer service while balancing cost overhead. Getting skilled employees where they need to be in a multi-channel, multi-skilled world has become more challenging than ever, which is why HCM software has moved from a nice to have into the must have category,” offers Hoekstra.
The need to have accurate demand forecasting is quickly becoming more apparent. How many employees are needed in three weeks? How can we anticipate the busy season? “All of these factors used to be determined by complicated spreadsheets and gut feel, but with HCM software they are determined automatically at a fraction of the time and cost,” says Hoekstra.
Swart says with critical labor shortages, skills gaps, and the impact of automation in the workplace, learning and development focused on career growth, up skilling and reskilling are important elements of modern HCM technology and execution. L&D is a key retention strategy, it helps drive engagement and build a positive culture. “In addition, consumer-grade user experiences with a heavy emphasis on mobile functionality are now must-have elements of your HCM technology.”
In today’s competitive job market, organizations want technology to support that they are an employer of choice. Mullen says talented people have a choice of where they want to work, so if the technology experience is clunky and fails to meet the consumer-grade experience employees enjoy in their personal lives, top talent may flee elsewhere. It’s also important to have great technology to streamline the talent acquisition and recruiting process. This is the first impression of the company on a candidate. If it feels outdated or takes too long, organizations risk missing out on great candidates.
Organizations also want to tie HR excellence more closely to business outcomes. HR is no longer a back-office function or the policy police. “At high performing organizations, HR plays a critical role steering the ship, building an engaged workforce passionate about moving the needed for their customers. With this in mind, it’s vital that HR has an HCM suite with a single, accurate, real-time view of data with predictive analytics and insightful employee perspectives that allow managers to take a proactive approach to uncovering challenges and solving them before they can have a negative impact,” says Mullen.
Early Adopters and Primary Candidates
While large enterprise organizations are ideal candidates for HCM solutions, the need for these offerings reaches even the smallest organizations. “With the depth and breadth of solutions available today, any sized organization can take advantage of HCM technologies,” offers Swart.
He comments that large enterprise organizations were the initial adopters of HCM software. They sought this technology with the primary goal of automating repetitive tasks. However, HCM technology has evolved dramatically since then and is now a powerful set of solutions that help drive talent strategies while providing managers and business leaders with data and insights to empower better decision making across the organization.
Hoekstra says the HCM frontier was conquered by contact centers. Contact centers realized early on that the rich amount of data captured by phone systems was invaluable in predicting the future. “Over the years, this expanded into many other industries including retail, warehouse, and banking—thanks to the efforts of the early contact center pioneers.”
The type of employee is also a consideration. HCM solutions have been especially popular for the salaried workforce for many years now, but one area where its usage is expanding with the hourly workforce. “For many years you’d see organizations using an HCM solution for administrative/office staff at their headquarters and a workforce management solution for their hourly workforces in the stores, working on the plant floor, or on the road making service calls,” says Mullen.
He says part of the reason for this is that workforce management is really challenging to do correctly. “Today, with organizations increasingly seeking a consolidated and seamless view across their entire workforce—whether hourly or salaried employees—they should seek out an HCM solution that meets the needs of all employees, whether it’s the annual performance review cycle that salaried employees expect or the ability to swap shifts and receive time-off in real-time or hourly employees.”
Hoekstra says any organization with a diverse work staff that can be driven by data is a primary candidate for HCM software. “If you can count the number of transactions that are completed, HCM can have a dramatic impact on an organization’s human capital overhead.”
Mullen suggests that organizations look at the complexity of their HR, workforce management, and payroll needs when determining whether or not HCM is a good fit. “The great benefit of an HCM solution is that it’s able to deliver key functionality across all of these areas in a single solution. The functionality won’t go as deep as a best-of-breed enterprise solution, so an organization with complex and challenging talent acquisition needs may be better served with a stand-alone ATS application. However, for enterprises with simple workforce needs, as well as mid-market and small businesses, HCM solutions enable teams to do a lot more with fewer internal resources.”
HCM technology offers a variety of benefits, including efficiency and a better employee experience.
Efficiency is the number one benefit of HCM software agrees Hoekstra. “Idle work staff can be a big negative when trying to keep costs balance, but running the risk of dissatisfied customers often leads to human capital bloat. If your organization could balance those two out without suffering customer satisfaction scores, wouldn’t that be the ultimate goal?” he asks. “That is exactly what HCM is designed to do. Provide the best experience at the appropriate cost. The biggest challenge is staying dedicated after the initial wins. But consistently challenging the status quo, organizations benefit greatly over time in their ability to manage staff with HCM software.”
Swart notes that done right, HCM implementation should provide measurable business results for an organization that are directly related to the talent strategies executed. Benefits include improved employee productivity, engagement, and a positive workplace culture. Managers and business leaders are able to make data-driven decisions related to talent, improving outcomes. “Finally, a well-executed HCM strategy allows your organization to remain agile in a changing environment so you are better equipped to evolve and grow.”
Mullen is quick to point out that organizations benefit most from its HCM implementation only if they select a vendor that partners with them to deliver long-term success that incorporates end-user training, support, and customer community.
Supporting a Modern Workforce
HCM solutions offer many benefits to the modern employer. As technology continues to advance and new generations enter the workforce, there are many benefits to be had from such a solution.
Feb2019, Software Magazine