Your guide to understanding how the right HCM system can help with business operations.
There are few factors in a business as impactful and important as people. The right team can help your company grow its customer base, achieve record profits, and make progress toward its mission. In order to get these stellar results, you must build a workplace in which your employees have access to the tools and resources they need to do their best work.
That’s where human capital management (HCM) software can step in. This HR technology helps businesses centralize and streamline human resource management tasks with the goal of optimizing workforce management, driving employee engagement, and enabling strategic decision-making.
If your business is looking to embrace strategic human capital management, an HCM system may be exactly what you need. In this article, we share what HCM software is, its many workplace benefits, and how it can help businesses streamline specific core HR features. We’ll even take a closer look at how HCM systems have helped real businesses improve their operations.
What are Human Capital Management (HCM) solutions?
Human capital management systems oversee the comprehensive administrative management of an organization's workforce. These solutions manage essential HR functions throughout the entire employee lifecycle, playing a pivotal role in everything from an employee’s first day with a company to their last. What specifically can they help with? HCM systems are responsible for attracting, onboarding, developing, retaining, and recognizing top talent.
At its core, strategic human capital management technology is designed to empower businesses to get the most out of their people. By building consistent, meaningful, and personalized experiences for every employee, companies can drive job satisfaction, engagement, loyalty, and even better business results.
HCM solutions give businesses one centralized location to manage and execute all of their people programs, allowing for streamlined operations, improved efficiency, and enhanced collaboration across the organization.
Key benefits of implementing HCM solutions
Like any HR software program, HCM solutions are an investment. Even so, they can prove to be one that’s well worth your business’ while. Here’s a closer look at how HCM solutions can drive growth, maximize revenue, and minimize costs for organizations.
- They streamline HR processes
HCM software stores an organization’s people data in one centralized location, making it easier to stay organized, automate tasks, reduce manual errors, and remain compliant. For example, employee benefits selections can flow directly into payroll, reducing manual paperwork and ensuring accurate benefits coverage and deduction calculations. - They improve employee experience
These systems typically come with robust employee self-service tools, allowing your workforce to manage their own information. For example, an employee can enroll in benefits, change their address, view past paychecks, request time off, check out their upcoming work schedule, swap shifts with a colleague, access company policies, and more — without having to submit a ticket or book face time with your HR team. By giving employees this autonomy, HCM tools can foster a sense of ownership and empowerment, leading to increased job satisfaction and engagement. - They empower data-driven decision-making
HCM software integrates data from various HR functions into a single platform, providing real-time analytics and insights into workforce trends, employee engagement, turnover rates, and other key metrics. This enables HR professionals to make data-driven decisions and optimize workforce planning and management strategies. - They simplify compliance management
HCM software integrates time and attendance tracking with scheduling and payroll systems, automating the collection and calculation of employee work hours, overtime, and paid time off. This minimizes errors and ensures compliance with labor laws and company policies related to working hours, breaks, and overtime pay. HCM software can also monitor compliance by tracking training program completion, employee certifications, and adherence to labor laws and regulations. This reduces the risk of non-compliance penalties and facilitates the preparation and submission of required reports to regulatory agencies. HCM systems can even proactively warn you about approaching deadlines so you have adequate time to prepare your reporting and never miss a deadline. They attract and retain top talent
Again, human capital management systems touch every stage of the employee lifecycle. They can streamline onboarding, offer easy-to-understand benefits enrollment, deliver personalized learning and development opportunities, help employees identify career progression opportunities, keep individuals and their managers aligned, and so much more.For employers, HCM systems can help monitor key performance indicators and identify negative trends early on. For example, if turnover rate is uncharacteristically rising or engagement sees a significant dip, these could indicate large issues your business will want to identify and take action to improve. By providing these valuable insights into your organization, HCM systems empower businesses to proactively identify and address potential challenges, fostering a more productive and engaged workforce
Core HR HCM System Features and Functionalities
From hire to retire, HCM software has features to support every step of the employee lifecycle. Here’s a closer look at the most common tools and functionalities an HCM solution can offer:
Employee data management
Human capital management software solutions centralize all your people data, making it easy to manage and update employee records and information in one place. From employee addresses and direct deposit information to performance reviews and development plans, your business generates a lot of data. Having one centralized system to store it all in can help your organization manage your data more easily, ensuring employee records are accurate and up-to-date.
Payroll
HCM systems integrate directly with time and attendance tools, improving the accuracy of wage, bonuses, overtime, tax, and other payroll deduction calculations. By reducing manual errors and ensuring compliance with labor laws and regulations, HCM payroll tools can ensure your employees are paid accurately and on time. Detailed reporting tools can also provide real-time insights into labor costs so your business can better anticipate budgeting needs.
Benefits administration
HCM systems make it easy for employees to enroll in health insurance, retirement plans, and other perks in just a few clicks. They can also give employees easy access to plan information and self-service tools so they can change coverage after a life-qualifying event, update 401(k) contributions, and more.
Performance management
From everyday one-on-ones to formal performance conversations, human capital management software can help your business share more impactful and valuable feedback, foster open communication, and drive continuous growth and development for your employees. It can also help your employees understand internal growth opportunities as well as set and track progress towards development goals, giving them a clear understanding of how their career can grow within your company.
Human capital management systems help businesses build more efficient recruitment, onboarding, performance management, and development processes. They also allow businesses to give their employees a voice through regular engagement surveys. These surveys collect valuable insights on the workplace experience, identifying areas for improvement and enabling organizations to make targeted enhancements that boost engagement, job satisfaction, and retention.
Time and attendance
Help automate tedious, manual time and attendance tasks with HCM software. These platforms give HR teams time back in their day by automating routine tasks like time collection, timesheet approval, responding to time-off requests, and more.
Compliance
Human capital management software solutions help businesses meet local, state, and federal compliance regulations, thanks to automated tracking, reporting, and documentation features. These systems can help organizations keep pace with new and existing standards, reducing the risk of non-compliance penalties.
Strategic workforce planning
HCM systems provide actionable insights and analytics into workforce trends, turnover rates, organizational performance, and other key HR metrics. This can help businesses forecast future workforce needs, identify skill gaps, and develop targeted recruitment and training strategies to align with future organizational needs.
Ready to take a more people-centered approach to business? Check out our Human Capital Management Buyer’s Guide for advice on how to pick the right solution for your organization’s needs.
Key Considerations for Choosing a Human Capital Management Software Solution
If you’re convinced an HCM solution would be a worthwhile addition to your HR tech stack, here are a few things you’ll want to keep in mind as you kick off your search for an HCM partner:
- Alignment with organizational goals and needs: Outline your goals for an HCM system and what your business hopes to get out of its investment. Are you looking to streamline your HR processes? Drive engagement? Maintain compliance? Listing out your goals and must-have features can help guide your software search and ensure you pick the best solution for your needs.
- User-friendliness and ease of adoption: Your end users should always be top-of-mind when evaluating new technology solutions. Be sure to include your employees, managers, and HR team members in any final-round software demos so they can get a feel for the tools and share feedback around ease of use and overall helpfulness. Their feedback may be what sways you to choose one solution over another.
- Vendor reputation: You should also do your due diligence and talk to a vendor’s current or past customers to get a full understanding of what it’s like doing business with this vendor. Be sure to ask for the good, the bad, and the ugly, so there are no surprises if you choose to move forward with this vendor.
- Quality support services: Issues always arise at the most inopportune moments, so you’ll want to make sure you choose a solution with 24/7 reliable support on your preferred channels (phone, chat, etc.).
- Data security: Data security should be a top priority during your search as you’ll want to ensure a vendor can protect sensitive employee information and comply with data privacy regulations. Data encryption, role-based access control, multifactor authentication, and certifications for relevant data privacy regulations (GDPR, HIPAA, CCPA, etc.) can all help reduce the risk of a data breach and keep your data secure
Real-World Examples of Strategic HCM Success
Here are a few examples of how companies in different industries are leveraging the benefits from HCM software:
Feeding America
While non-profit hunger-relief organization Feeding America sought out a solution that could help them more easily navigate the tax complexities of managing a dispersed and diverse team, they found so much more than payroll assistance with UKG Pro®. Since going live with Pro, Feeding America has transformed its people-focused processes thanks to:- Smarter payroll: UKG Pro’s Smart Tax Search automatically recommends the correct federal, state, and local payroll tax, based on where an employee lives and works in the U.S.
- Employee self-service: Employees can easily view their past pay stubs, tax details, benefits deductions, and Form W-2s on their smartphones and tablets.
- People enablement tools: UKG also provides employees with access to collaborative performance management tools that make setting and tracking career goals easy and rewarding.
Thanks to UKG, Feeding America can more easily and accurately run payroll, while also developing and empowering their workforce. This helps the non-profit stretch its limited resources further, saving both time and money that the organization can reallocate towards fighting hunger.
Belle Tire
With more than 170 stores and plans to rapidly expand in the next five years, tire and automotive service retailer Belle Tire knew it needed to ditch paper-based HR and people practices and go digital to empower and better serve their employees. By choosing UKG Pro as the company’s HCM and workplace management solution, Belle Tire was able to automate tasks and empower employees:- Employee engagement strategy: UKG Employee Voice enables Belle Tire to conduct employee surveys, providing both qualitative and quantitative insights into the priorities and concerns of its workforce. This valuable feedback empowers the company to take proactive measures and enhance the overall workplace experience for its employees.
- Manager enablement: With UKG, managers can make immediate decisions on overtime projections, address time-off requests, and approve shift swaps. UKG’s easy-to-use tools allow people leaders to spend less time on administrative work and more time investing in their teams.
Now the company's people programs are personalized, enriching, and informative, significantly enhancing its employees' workplace experience and satisfaction.
Choose UKG as Your Human Capital Management System
If you’re looking for an HCM system, UKG Pro can help you better serve your people. Our platform not only helps HR teams streamline their workforce management, but it also engages employees through more meaningful work experiences. From payroll to talent management to time and attendance, UKG Pro has everything your organization needs to meet its goals.
Interested in learning more? Check out UKG Pro’s comprehensive human capital management suite for yourself to see how it can help attract, nurture, and grow your talent.
