Everything You Need To Know About Human Capital Management Software (FAQs)
What Is HCM Software?
Human Capital Management Software, also known as HCM software, are cloud-based tools that help HR teams to manage and optimize their internal processes. HCM software solutions typically integrate and automate multiple HR functions within one platform, such as payroll, benefits, recruiting, performance management, employee engagement, and development. They also usually include collaboration and analytics tools. Together, these features help make HR operations more efficient, enabling HR teams to spend less time on repetitive data entry, and more time using data-driven insights to help their organization grow and their employees flourish.
What Are the Benefits Of HCM Software?
There are multiple benefits to using an HCM tool. Firstly, HCM tools can help increase productivity and efficiency. They store all your organization’s people data in a single database, which HR teams can access via a single platform. This means that all data is digitized and standardized, thereby helping to reduce the need for manual data entry and mitigating the risk of human error. It also makes it much easier for HR teams to find the data they need, even when they’re not in the office. Finally, it makes this data accessible to HR staff that may find it difficult to read handwritten notes, as they can use a screen reader to access information.
The second key benefit to HCM software is that it helps HR teams to improve employee and business performance by tracking Key Performance Indicators (KPIs). KPIs are measurable values that show to what extent an employee is achieving their individual objectives (e.g., closing a certain number of sales), or an organization is achieving its business objectives (e.g., increasing employee retention). The best HCM software offer in-depth reporting and analytics tools that generate visual reports into almost all data sets stored in the system, from recruitment and onboarding to performance and development. These reports make it easier to track KPIs over time, which, in turn, empowers HR teams to make data-driven suggestions on how employees and the business as a whole can meet their KPIs more effectively.
Thirdly, HCM software can save HR teams’ time and resources. By offering a self-service portal, HCM software enables employees to access their own payroll and annual leave data, as well as edit their personal details. This reduces the number of enquiries HR teams receive, saving them a lot of time.
Finally, HCM software can help improve the security of employees’ sensitive, personal data. The strongest HCM tools encrypt their databases, preventing unauthorized persons from reading the information stored within them. They also offer integrations with identity and access management tools, which enables them to offer multi-factor authentication and single sign-on to further prevent unauthorized access, and enable the implementation of role-based access controls.
What Features Should You Look For When Choosing HCM Software?
Here are the top features to look out for when comparing HCM platforms:
- Core HR: Your HCM software should store all employees’ personal and contractual information in one database, and provide a single platform built around that database from which HR staff can manage and carry out core HR tasks. These include recruitment, onboarding, payroll, and benefits administration.
- Performance Management: Your solution should enable you to monitor and evaluate each employee’s performance over time by enabling you to schedule regular reviews with each employee, as well as providing a forum for colleagues to give and receive feedback amongst themselves in real-time. You should also be able to set personalized KPIs and development goals for each employee, then track their progress towards achieving those goals.
- Learning and Development: For employees to be satisfied in their roles, they need to feel like they’re progressing and reaching their full potential. To facilitate this, look for an HCM platform that offers learning and development tools. This might be a complete built-in Learning Management System (LMS that enables to create, assign, and track learning modules, or it might offer an integration with your existing LMS to help you monitor employee development and track their progress over time.
- Reporting and Analytics: Strong reporting functionality should be integrated into each feature of your HCM software so that you can analyze your people data and make data-driven decisions to improve employee productivity and satisfaction, as well as influence wider strategic changes across the organization. Look out for visual reports with charts and diagrams that your team can use to easily spot and monitor trends, and predictive analytics, which can help you forecast company growth.
- Automation: Your chosen HCM platform should automate repetitive tasks like time and attendance tracking, payroll processing, and benefits management.
- User-friendly Interface: An intuitive, easy-to-use interface will promote adoption among employees and HR staff. Look for mobile accessibility, so that HR staff and managers can access HCM functions remotely, and mobile apps that enable self-service employee access to core HR information.
- Integrations: Your HCM software should integrate with other business systems such as ERP and CRM platforms, with API-based integrations for seamless data exchange.
- Security and Compliance: Look for in-built security features such as encryption and access controls that will help ensure the security and integrity of your employees’ sensitive data and help ensure compliance with data protection standards such as GDPR and CCPA.
