When running a company, there are various departments of significant importance. One is HR, or human capital management (HCM). HCM deals with managing an organization’s most valuable assets – its employees. In today’s modern business world, where competition is fierce and change is constant, a strong HCM strategy can give companies a competitive edge. Let’s learn more about HCM and how NetSuite HCM is a way for HR teams and companies looking to automate their HR processes.
What is HCM?
Human Capital Management (HCM) refers to practices and processes for acquiring, developing, and optimizing the workforce. It offers HR professionals a disciplined method to integrate business needs with workforce realities, emphasizing increasing the value of each person. Using specialist software, HCM allows firms to address crucial administrative and strategic problems, resulting in a thriving work environment.
Let’s understand HCM more with a quick example. XYZ Inc. identifies a need for digital marketing expertise.
Using HCM:
Acquiring Talent: HR uses data to recruit individuals with digital marketing skills.
Developing Skills: Existing employees attend workshops and online courses to enhance their digital marketing capabilities.
Optimizing Workforce: HCM tools assess performance, and high-performing individuals are given leadership roles in digital marketing, optimizing overall team productivity.
In this concise example, HCM enables XYZ Inc. to quickly address a specific skill gap, develop existing talent, and optimize the workforce for improved performance in the digital marketing domain.
3 Core Aspects of HCM
Talent Acquisition involves the resources and processes needed to acquire new talent. Metrics like cost per acquisition, time to fill a position, and candidate experience help refine acquisition practices and determine the optimal employment structure.
Talent Management: Once the workforce is acquired, HCM focuses on management and development. Metrics such as training program participation, promotion trends, and retention rates assist decision-makers in understanding and improving development programs.Workforce Optimization: A strategic aspect of HCM involves aligning workforce efforts to maintain customer satisfaction and increase profitability. It also plays a crucial role in planning future workforce needs during significant business transitions like mergers or acquisitions.
HCM vs HRMS
Although they address distinct issues, HCM and HRMS are both systems used by businesses to manage their human resources. HCM focuses on strategic human capital management, which includes talent acquisition and workforce planning.
HRMS is more operational, with functions such as payroll and attendance tracking. Human capital management aims to optimize employee value for company success. HRMS manages day-to-day HR tasks and administrative functions.
What is NetSuite Human Resource Management (HCM)?
SuitePeople by NetSuite is a human resource management solution that provides a variety of functions to help streamline HR service delivery for all employees across the firm.
Businesses can eliminate the need for third-party integrations by using a single application to manage HR, payroll, and financials. They can also enhance data integrity, create better employee experiences, and make educated decisions that align worker performance with corporate goals.
Best NetSuite HCM Features
The Suite’s HR Administration functionality simplifies duties and saves time by automating processes and allowing for seamless information sharing.
Dashboards provide a clear perspective of important performance indicators, allowing HR to work more strategically with senior leaders. The Employee Directory promotes collaboration, while Effective Dating secures correct data with an audit trail. Access Controls ensure that modifications are made with the proper permissions.
SuitePeople Payroll simplifies end-to-end payroll processes, ensuring compliance and automating tax filings. SuitePeople Performance Management centralizes performance reviews and offers engaging features.
Time-off management automates requests and balances. Compensation and Benefits Tracking displays changes throughout the employee lifecycle. Self-service empowers employees and managers, whereas SuitePeople Kudos promotes a good atmosphere. Onboarding/offboarding checklists improve the greeting and departing processes.
Workforce Planning integrates with NetSuite Planning and Budgeting to enable future employment strategies. HR Analytics offers role-based dashboards with 15 industry-leading KPIs, allowing faster and more confident decision-making.
Importance of NetSuite HCM
NetSuite Human Capital Management (HCM) is critical for improving business performance and creating a healthy work environment. HCM simplifies talent acquisition, which is critical to success.
It aids in identifying and hiring individuals whose talents and attributes align with the company’s aims and culture, resulting in a skilled and cohesive team, ultimately leading to higher productivity and a thriving work environment.
Furthermore, HCM exerts an impact on employee retention methods.
It highlights the value of team member satisfaction and well-being, which includes work-life balance, professional growth opportunities, and a positive work environment. This comprehensive approach lowers turnover rates, saves money on recruitment and training, and fosters a stable and experienced staff.
HCM also plays an integral part in performance management. It enables firms to establish clear expectations, provide regular feedback, and link individual ambitions with corporate objectives. This enhances individual and team performance, contributing to the organization’s success.
In addition to its strategic importance, HCM uses technology to streamline administrative procedures connected to human resources, including payroll, benefits administration, and compliance. This automation improves operating efficiency, lowers the risk of errors, and assures regulatory compliance.
Key Benefits of NetSuite HCM
Strategic HR Partnership: HCM helps HR become a strategic business partner by providing crucial data and insights for workforce decisions, promoting open communication and culture, and breaking down barriers between departments.
Increased Employee Satisfaction: Investing in professional development increases employee satisfaction, with more than 40% recognizing a company’s commitment to growth as a critical element in job satisfaction.
Higher Retention Rates: Career advancement opportunities, facilitated by HCM’s career-pathing capabilities, contribute to increased employee loyalty and higher retention rates.
More Engaged Employees: HCM fosters a commitment to professional development, creating a more engaged and productive workforce, as only 32% of U.S. employees are engaged.
Efficient Recruitment: Valued employees are more likely to recommend top talent to the organization, streamlining recruitment processes and reducing the need for extensive resume screening.
Meaningful Performance Reviews: Continuous feedback on performance provided by HCM solutions strengthens the relationship between managers and employees, leading to better outcomes.
Future Trends in HCM
Looking ahead, the future of human capital management will feature more innovation, focusing on cloud-based solutions to support remote workforces.
Machine learning and predictive analytics, currently built into existing systems, will expand to include actual artificial intelligence. This progression will allow businesses to forecast future skill requirements better, identify labor trends, and match individuals to open positions.
NetSuite Human Capital Management is more than just a business practice; it is a dynamic and strategic approach that drives enterprises to achieve worker excellence. If you would like to learn more about NetSuite HCM, please do not hesitate to contact us. Folio3 is an approved implementation partner and provides consultations.
