What is HCM software?
Human capital management, or HCM, software is a digital tool used to manage and organize a business’ employees. HCM software varies in performance, with some programs handling many duties like payroll and productivity tracking, while others managing only one task for the company.
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Benefits of HCM software
HCM software can benefit both your HR team and your organization as a whole. Review a few of the primary advantages of implementing HCM software:
- Improved efficiency:HCM software automates tasks that your team used to perform manually, giving them more time for high-level responsibilities.
- Better employee experience :Employees like the ease of using an HCM platform to request time off or check their benefits rather than managing physical paperwork for those tasks.
- Money management:After the initial cost of setup and training, your HCM software should save you money by allowing your HR team to manage other projects.
- Accurate data:Some HCM software provides useful metrics regarding employee productivity and performance, allowing you to make data-backed business decisions.
- Regulatory compliance:Your HCM software can automate important reminders and tasks like required trainings and other regulatory issues, saving your team time and keeping you in compliance.
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Functions and features of HCM software
HCM software can differ substantially to meet the unique needs of every industry and company. Common features that many businesses look for when selecting HCM software include:
Employee information management
Nearly every HCM software option will include some form of an employee information management system. Here, you can track employee details like:
- Name
- Job title
- Home address
- Salary history
- Banking information
- Time off balance
Rather than keeping all this information in physical file folders, HCM software allows you to keep it secure and easy to access digitally.
Recruitment management
Many HCM software programs manage recruitment and hiring automation. While there are some steps in the process that an actual employee must handle, the HCM software helps to streamline the process and make it much more efficient, saving time and money.
Performance management
Some HCM software programs allow you to track your employees’ performance through its system. You can keep track of productivity indicators like:
- Overall performance
- Behavioral testing
- Competency testing
- Key performance indicators, or KPIs
- Performance reviews
- Feedback from leadership
Usually, you’ll have the option of what you want to share with employees and what they can’t access, allowing you to easily share and manage confidential information between managers, human resources and employees.
Benefits management
Including benefits information in your HCM software is great for you and your employees. You can keep track of who’s enrolled in what type of benefit programs and automate reminders to enroll or update information. Your employees can log in to the system to check their benefits and make any necessary changes or requests.
Compensation management
Managing your company’s payroll and other financial services is a top priority for most companies interested in HCM software. Most programs can manage salaried, hourly and commission-based employee pay schemes besides employee bonuses and other compensatory rewards.
Time management
Incorporating time tracking into your HCM software helps manage other areas of human resources tracking like payroll and time off management. Employees will also like it since they use the same platform for managing their benefits, performance reviews and clocking in and out from work rather than multiple manual or digital programs.
Professional development management
Some HCM software programs allow you to provide in-system professional development and training for your employees. You can send automated reminders to employees when they need to complete trainings and provide certifications to them once they’ve completed the course.
Accounting management
A useful inclusion in some HCM software systems is various accounting tools, like budgeting and forecasting. The program can help manage human resources budgets, create forecasts based on performance and hiring and turnover patterns and automate a few other accounting processes.
Technical features
For you and your employees to most effectively use your HCM software, you’ll want to ensure it has sophisticated technical elements like:
- Mobile applications
- Secure encryption
- User support
- Regular maintenance and updates
