EntryPoint Global - Time and Attendance - Labor Scheduling - Kronos - Workbrain - Infor

The winning firms of tomorrow will employ comprehensive human capital management strategies comprised of business processes, best practices, software solutions, company programs and other soft factors, and will sustain their competitive advantages by managing their workforce and aligning their talent with the organizations' business goals.

Today, some 85% of a typical S&P 500 company's market value can be attributed to a company’s intangible assets – namely, it’s people, processes, patents, technologies, etc. For most companies, their human capital is what ultimately sets them apart. Today, it’s not what a company owns, but the tacit knowledge that resides within an organization that ultimately determines tomorrow’s winner and losers. 

Leading organizations will employ comprehensive human capital management strategies. Increasingly, the backbones of such organizational human capital management game plans are Human Capital Management (HCM), Workforce Management (WFM) and Talent Management (TM) software solutions that help companies better manage, compensate and promote their human capital.

Often, one hears executives, consultants and vendors throw around these terms, use them interchangeably or in conjunction with one another - but what exactly do these terms mean? More importantly, how are they related to one another? I’ll hopefully add some insight here and for you analytical wonks out there, present a simple mathematical model to illustrate their relationship. All others simply gloss over the math part. 

Human Capital Management
Aberdeen Research defines Human Capital Management (HCM) as solutions that help companies align their workforce with their business goals and improve processes to achieve measurable business results. The end goal being, maximizing process efficiencies and improving workforce productivity. 

HCM is the all encompassing term that comprises all systems and business processes used to manage one’s employees, be they working professionals, hourly or a combination of the two. A large national retailer is a great example of a company employing the latter. HQ staff will be salaried working professionals (Management, Finance, Procurement, IT etc.), while retail staff at the store level will tend to largely be made up of hourly employees. Together they comprise the overall human talent made up of both hourly and salaried employees that makes the entire company tick, ideally as a well-executed machine, as opposed to a laboring giant.

HCM in turn is comprised of two strategic pillars; namely Workforce Management and Talent Management. Essentially;

                                                          HCM = WFM + Talent Management

Workforce Management solutions (such Infor/Workbrain or Kronos) are used to manage a company's hourly workforce, while Talent Management solutions focus on salaried professionals, but increasingly, both salaried and hourly employees as well. In the war for talent, all employees matter - be they hourly or salaried, a senior executive or a young new hire.

Part 2 of this entry,  The Mathematics of HCM - Part 2 will address these two areas in more detail. See ya' there...

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