Understanding Human Capital Management in Staffing
At some point, you’ve probably heard the idea that employees are the most valuable resource in business. Staffing solutions are at the core of every organisation, directly impacting your business lifecycle’s productivity, profitability, and overall success.
However, what does it actually mean when we refer to employees as valuable? Does this mean they have economic value, like buildings, inventory, or equipment? Or are they valuable for the time and commitment they give to your organisation?
You may have also heard of the term “human capital management,” which aims to source and hire the best employees with a focus on gaining maximum value from them throughout their tenure with your company. You can ensure high retention levels while achieving your business goals by continuously improving your employees’ skills, capabilities, and satisfaction.
So, let us dive deeper into human capital management, explore what it means for business, and discuss the benefits your organisation can gain from this alongside your staffing strategy.
What is human capital management?
Human capital management (HCM) is a practice organisations leverage to attract, recruit, train, develop, and retain the best employees to achieve micro and macro business objectives. The system allows companies to invest more in their employees to contribute at their highest level. If employees are the most valuable resource, HCM gives organisations an edge over their competitors by nurturing their talent and capitalising on their potential.
Organisations that rely on their employees to achieve most of their goals will devote resources to growing and developing their core skills and ability to deliver results. Human capital management guides leaders in addressing gaps in their company’s competencies and emphasises staffing efforts that can fill those gaps.
This human-capital focus provides more job fulfilment for employees because employees feel their contributions matter; managers have time to invest in employees, and high performers receive more growth opportunities.
We can identify four main human capital management activities: strategic HR planning, recruitment and staffing; compensation and rewards; and employee relations.
Strategic HR planning addresses how work teams, divisions, or organisations should function and includes preparing strategic plans, job analysis activities, job redesign efforts, and talent management initiatives.
This encompasses all areas of employee activities, including recruiting and development, job analysis, employee relations, and compensation/workforce administration. By planning and adjusting the right factors at the right time, organisations can maximise the productivity of their workforces and ultimately help them achieve their strategic objectives.
Recruitment and staffing
Recruitment and staffing is a complex process that can include establishing recruitment policies, motivating the candidates to submit their applications, screening and interviewing them, assigning the right people to vacancies and arranging training for them.
These are core functions of HCM where HR teams can attract and hire top talent by highlighting the value required from the candidates and what value job seekers will gain from being a part of the organisation.
Compensation and rewards
Beyond the usual recruitment processes of candidate selection and retention, organisations must also be aware of retention processes, including facilitating employee motivation and satisfaction. HCM involves employee incentive programs that provide relevant and timely rewards for high productivity and good performance, such as short-term bonuses, annual cash incentives, and paid time off.
An impactful element of this strategy is making it a part of the organisational culture for employees to feel motivated by recognition, timely feedback, individual development, and personal rewards. Organisations that align positive reinforcement with the concept of active engagement improve the quality of their service delivery, increase employee motivation, and better adapt to challenges.
Performance management in HCM involves organisations’ activities, procedures, practices, and systems to assess and evaluate employees’ performance. Since human capital management is about improving the workforce’s performance, organisations have to devise the best approaches to measure and optimise employee performance.
Time-tracking and attendance are two HR practices for monitoring performance and ensuring workforce productivity. Tracking and analytics are also essential to understanding performance and identifying key issues to address. Time and attendance records, the questionnaires and online systems used to gather information on employees’ performance may not provide all the necessary details in identifying areas of concern.
By establishing a sound tracking and analysis system, HR managers can gain a deeper understanding of employees’ performance and drive them to achieve higher productivity in a broader range of tasks.
Maximise the value of your employees
How are you prioritising and concentrating on employee growth in your company? What personnel, organisational structures, and management procedures do you have to help you build a human capital management system? Which ones are you still lacking, and will you work on next? Does your company have a vision (purpose) and a set of goals that direct how you treat your employees, or “human capital”?
Answering these questions requires understanding how human capital is valued within your company, which will allow you to refine your current human capital management practices.
Your staffing strategy is critical to elevating your organisation’s human capital, and MASA is here to help you hire the best. Whether you require temporary or permanent employees, we are skilled at understanding your unique needs and delivering a tailored staffing solution to achieve your goals.
Contact MASA to learn more about our staffing services and how we can increase the value of your human capital.