Human Capital Management

Meaning & Definition

Human capital management (HCM) refers to a business strategy of treating human resources as assets within the organization. HCM includes all the aspects of the employee life cycle from recruitment to onboarding, payroll, performance, and development. HCM may be performed using HRMS or HCM software.

Important Features of Human Capital Management

• Enables organizations to utilize employees’ maximum productivity and efficiency.
• Facilitates HR functions such as recruitment, payroll processing, and attendance management.
• Increases employee engagement and retention.
• Facilitates HR decisions based on data and analytics.
• Provides flexibility for growth.

Legal & Regulatory Considerations

However, HCM is not an idea that depends on any legislative framework, yet it is extremely important in helping to ensure that all aspects of HR comply with labour laws and statutory requirements in India through systematic procedures.