How (HCM) is impacting HR?

HCM is the English acronym for “Human Capital Management”, which is nothing more than “Human Capital Management”.

human capital management

The use of HCM has been a bet of the main companies all over the world when it comes to HR and people management. It came to revolutionize this area, especially in innovation, competitiveness, and agility.

Essential for companies, people management has gained a new allied tool for corporate growth. Also, the improvement of the organizational climate and the development of talent retention strategies.

But what exactly does this acronym mean and how does it work? Keep reading and check out the answer to this question. Understand, today, everything about HCM and how it can help your company!

Meet the HCM

HCM is the English acronym for “Human Capital Management”, which is nothing more than “Human Capital Management”.  Although it may seem simple at first glance, know that here we are not just dealing with a management concept. After all, this is already (or should) be present in companies and it is not a new idea.

What differentiates HCM, then, is that it is illustrated in software that gathers a series of essential data for the practice of people management. From it, then, it is possible to gather complex information that helps in decision-making.

Such information, then, promotes organizational self-knowledge, bases strategic choices, as well as helps the corporation to anticipate problems or situations in which it should act. Therefore, HCM is revolutionizing companies as it facilitates and improves human capital management. That is the people who work in the company and are essential for its activities to be developed.

How does HCM work?

It works through the use of software fed with a series of data. Therefore, it is as if it were a database that integrates diverse information from the company and its employees.

The system, by the way, is not limited to gathering data. By gathering them, he also processes, organizes and distributes them to interested parties involved in the processes, such as HR, managers, financial sector, etc.

It analyzes and processes information, organizes it, and also distributes it, decentralizing it. All this, then, allows for not only a digital revolution in the company and especially in HR, but also better use of data.

In the end, HCM bases decisions that impact human capital on concrete data. And this is as much about hiring, firing, and promotions as it is about developing internal policies, benefits policies, etc.

What is the importance of HCM for companies?

As we have seen so far, this is a type of software that has a series of assumptions and possibilities. Therefore, it can bring many benefits to companies that adopt it. Check below the main advantages it offers!

Improvement in hiring

With the use of people management software such as HCM, your company can improve its recruitment and selection processes. This is possible by processing and crossing data, as well as by automatic and objective analysis of curricula.

Talent retention and turnover reduction

Another advantage that HCM offers companies is the possibility of retaining talent and reducing turnover. For this, it gathers data on corporate happiness, organizational climate, and performance. It also assists in the development of internal policies that can engage employees.

Increases productivity

The HCM has features that help the company to analyze the performance of employees. At the same time, it allows you to recognize who stands out, changes in productivity, and also solutions for it to grow.

Reduce costs

Since it drives decisions based on the use of data, HCM also allows companies to reduce costs. For example, it reduces turnover and, with it, expenses arising from new selections, hiring, and terminations.


Also, know that HCM is software that can be customized by companies. In other words, each corporation can hire exactly what it needs, choosing the modules, data, and analytics. 

Below, then, get to know the main modules available!

Main HCM modules

As it is software, each company can hire and adhere to the internal modules that most interest it. After all, HCM has a series of possibilities and tools, which can be customized by the corporation.

Discover, below, some of the main modules of this type of system!

Recruitment and selection

One of the HCM modules allows for automated CV selection. For this, the system has information about what is sought, requirements, and other data regarding the ideal internal profile for the new employee. Thus, it eliminates unnecessary and manual steps.

Compensation management

The system gathers data that help calculate fair wages. Even when doing so, it is also based on information regarding the performance of employees.

point management

This module assists in the automation of calculations related to shifts, bank hours, and overtime. Likewise, it allows better visualization of the journeys completed by employees, as well as providing information in real-time.

career management

This module operates on several fronts. Here, HCM focuses both on developing career plans for employees (in a job and salary policy) and on retaining talent and preventing the risk of losing employees who are a key part of the corporation.

Performance Management

Allows real-time monitoring of performance indicators of employees and teams. It assists in the evaluation of employees, as well as in practices that can improve the productivity and quality of activities.

Ongoing organizational climate survey

It automatically triggers organizational climate surveys, as well as allows employees to express their opinions, pains, and praise. With this, it gathers again data that guide decisions by HR and managers.

Muhammad Naeem Sajid