What is human capital management (HCM) software?
Human capital management software supports all aspects of the HCM function and eliminates manual processes. HCM software brings talent planning, management and analytics together in a single system so companies can help people reach their full potential.
The best HCM software enables companies to manage HCM processes effectively and support their workforce in faster, smarter and more agile ways. This is particularly valuable in Hong Kong's competitive talent market, where attracting and retaining top professionals is critical to business success.
At Workday, human capital management software is an all-in-one solution. Instead of separate applications for talent management, workforce analytics and payroll, HCM software integrates those functions into one platform. What's more, HCM software can help organisations plan future staffing needs by sharing information with other enterprise applications, such as payroll or financial management software. HCM software may be sold stand-alone or as part of a larger enterprise solution.
What is HCM?
Human capital management (HCM) is the practice of managing, recruiting and developing a workforce, overseen by an organisation's human resources (HR) department. Yet there's much more to HCM, involving not just HR direction but engagement from people managers across an organisation: workforce planning, providing learning opportunities and building a diverse and inclusive culture.
Because a happy and engaged workforce is critical to a company's success and helps attract talent in Hong Kong's tight labour market, smart businesses view HCM as a highly strategic practice.
Leading-edge companies see stellar HCM as something that enables people to be their best, most productive and most engaged selves. In a people-first culture, an HCM mindset views employees as the most important of all company assets. Research shows that better, more prepared and more diverse workplaces deliver superior results. To get there, good human capital management practices are essential whilst ensuring compliance with the Employment Ordinance and Mandatory Provident Fund (MPF) requirements.
Why is human capital management important to success?
Human capital management is important because people are the heart of any company and the source of its ability to innovate and compete. An effective HCM approach allows businesses to hire the best talent possible, maximise their potential and further develop them for greater success.
Forward-thinking organisations' executive leadership, including the CEO, CFO and COO, view human resource leaders (such as the chief human resources officer, or CHRO) as strategic partners who help advance corporate objectives through strong leadership.
Human capital management is important for:
Recruiting, hiring and retaining the right talent in Hong Kong's competitive market
Onboarding talent to the organisation
Creating an atmosphere that's inclusive, diverse and provides meaningful work
Enabling career choices through personalised learning experiences, mentorship opportunities and career path visibility
Enabling employees to perform to their highest potential
Fostering equitable workplaces
Safeguarding compliance with Hong Kong labour regulations
Managing payroll and MPF contributions
How does an HCM system enable employee success?
Today, a shift in the fundamental nature of work, new technology and the needs of new generations are changing how work gets done, employees engage and organisations operate. Companies are reimagining performance management to focus on the future rather than past contributions.
Workday's cloud-based HCM solution has been designed to cope with this changing world, enabling employee performance and success through:
Contribution: By adding goals into an HCM system, employees can better understand their current objectives and expectations, and easily track and highlight their achievements.
Capabilities: Information collected by HCM systems like Workday enables employees to understand their strengths and growth areas based on feedback from managers and peers. Workday Learning can recommend relevant content to help grow certain skills or prepare them for the next role.
Career: The number one reason people quit their jobs is the inability to learn and grow, according to the 2019 Deloitte Global Human Capital Trends report. To help employees think about next moves or career growth, data within an HCM system like Workday can show the job moves of others who have held similar roles. Employees see how peers and mentors grew and moved organically within the company so they can understand possible career paths and live an agile, always-learning work life.
Connections: Deepening relationships with peers is critical to increasing employee engagement and delivering business results. Through an HCM system like Workday, employees can build their own internal networks by connecting with peers and finding mentors with specific skills and experience to develop or further their careers.
Compensation: Employees want fair rewards. The compensation functionality within HCM systems like Workday enables managers to gain insight into performance and make comparisons across the team to ensure equitable compensation, whilst maintaining compliance with Hong Kong's wage and benefits regulations.
What are some of the key priorities for functions of human capital management?
In today's workplace, key priorities for human capital management include:
Talent acquisition: HCM plays an important role in recruitment, ensuring that HR professionals hire the right people for the right job. In Hong Kong's competitive market, where talent often considers opportunities across the Greater Bay Area and Asia-Pacific region, strong talent acquisition strategies are essential.
Mining for scarce skills: Many companies are in the midst of digital transformation and need new skills quickly. For example, a machine learning-powered "skills ontology" like Workday Skills Cloud helps companies cleanse, understand and relate job skills data. This enables organisations to gain a greater understanding of what skills they have, identify talent gaps and forecast skills needed today and in the future.
Enabling talent development: Change is constant and the skills valuable today may not be the same in a few years' time. Within the HR department itself, chief human resources officers rank competence with using new tools and technology, and cognitive ability to cope with constant change, as the most beneficial skills for their function in the next five years. Across organisations, a personalised employee experience, including training and learning, is now expected. HCM systems can enable access to information that helps employees plot their career trajectories, connect with others who've gone before them and identify openings and potential training opportunities.
Uncovering skills gaps: By leveraging HCM systems with embedded machine learning, such as Workday, companies can mine data sets, including performance reviews and job histories, to create snapshots of key strengths and missing skills across their organisation. With insights into skills gaps, companies can intervene with targeted training programmes and personalised development plans to rapidly upskill their workforce.
Enabling better decisions: Companies need access to the right data at the right time. Powered by machine learning and AI, augmented analytics searches through millions of data points generated by a business, looking for patterns and trends. From those patterns, companies can glean data-driven insights about the employee experience, diversity and inclusion, and belonging. The most advanced HCM systems even make recommendations on what actions should be taken, in plain language.
How is the role of HR evolving?
In the past, HR was often associated with administrative duties, such as gathering, filing and storing paperwork and establishing and enforcing regulations. Today, HR is transforming. In Hong Kong's digital, fast-paced business environment, HR functions have expanded beyond traditional responsibilities. Seven key attributes of an effective HR leader are:
A strategic partner: HR contributes to the development and success of business plans and objectives, and the people part of a company is considered a strategic contributor to business success.
An expert in talent acquisition: Today's HR executives formulate employer brands to attract talent and promote their workplaces, particularly important in Hong Kong's competitive labour market.
A leader in benefits and compensation: Benefits and compensation are critical to attracting and keeping key talent. Employees increasingly seek more flexibility in terms of benefits, perks and work hours. Successful HR departments are taking note and innovating, whilst ensuring compliance with MPF regulations and the Employment Ordinance.
A learning advocate: Today's employees want to continue developing skills and capabilities, and HR plays a role in fostering continuous learning far beyond initial training of new hires.
An employee advocate: HR helps establish the company culture and climate in which people feel included, valued and empowered to do their best work.
A leader of change: Today's HR leaders frequently lead change initiatives for their organisations and work to minimise resistance to change.
A compliance leader: Workplaces are monitored by data privacy, labour and employment laws. Human capital management is critical to a company's ability to comply and stay abreast of new and changing regulations, such as the Personal Data (Privacy) Ordinance and ongoing updates to Hong Kong's labour legislation.