Human capital management (HCM) is an investment approach to an organization’s talent acquisition strategy that perceives people as assets (human capital) whose current value can be measured and whose future value can be enhanced through investment.
The prime question here is the translation of human resources into human capital through a sharp investment strategy. In other words, Human Capital is a well-employed human resource that is actively engaged in a meaningful, worthwhile job or role and delivering a desired level of productivity. Many like to talk about these two terms within the purview of a cost center (HR) and profit center (HRM). To me, being in the profession for nearly two decades, the two complement each other, it is the transition process that is the key factor.
Years of research and expertise realized that humans cannot forever be treated as assets but are in actual terms “value adders” or “capital”. Analytics drew show HRM is based on the cost incurred or the “input” and for HCM searches for the value-added or “output”.
Enterprises, in its catch for the BHAG, are always looking to optimize costs and timelines and in the process of this business growth, HR is often sidelined or does not receive the attention it deserves. But recent trends show that enterprises, as they have evolved, started recognizing human resources like capital, and are keen towards its development. It’s at this point technology plays a big role. The Human Resource Capital technology, unlike other HR software’s no more plays the role of a directory, but the real enabler in improving workforce management, acquisition, development and optimization.
Runa Agarwal, a Senior Practitioner, HR in ICube Consortium Pte. Ltd., has led and executed various HR Digital Transformation Programs with over 20+ years of experience across various industries .