Maximizing Workforce Value: The Essentials of Human Capital Management

Human capital management (HCM). You’ll see this term a lot on our site. Its use across industries lingers dangerously close to “buzzword” territory. As a family-owned provider of human capital management services, Lift HCM has helped businesses like yours get the best from their workforce for three generations and counting. Let’s pull it back a bit and give you a stronger handle on the term.

“Capital” refers to the assets of a corporation–of which, “humans” are, undoubtedly, the most valuable. The higher-level abstraction of this term suggests a company can strategically “manage” and invest in its human assets (e.g. its workforce) to maximize its value.

HCM encompasses a range of duties under the umbrella of human resource-related to the employee lifecycle from talent acquisition to offboarding. This can include:

• Payroll
• Onboarding
• Training
• Recruiting
• Compliance
• Benefits Administration
• Performance Monitoring
• Time and Attendance Tracking

You Spelled “HR” Wrong”

You may be considering that this resembles HR with a marketing twist, to which we inquire, have you observed the HR team demonstrating creativity?

You can find numerous articles comparing HCM software to HRMS or HRIS, as well as articles comparing HCM service providers to ASOs, PEOs, or EORs. Each asserts that there are distinctions, and the term encompassing the broadest range of functions coincidentally aligns with what they offer.

While these terms may differ, they lack sufficient consensus for a definitive definition. In the absence of this, it becomes easy to rely on implications and draw vague distinctions to claim, "they cannot do what we do."

In reality, they can. If not, they will earn a commission by referring you to those who can. You entered the realm of marketing the moment your assumptions were influenced by their perspective. Therefore, it is crucial for potential consumers to inquire about what their vendors offer, what they do not, and the associated costs (as some services are only available as add-ons). Remember: all paths lead to payroll.

Why Do All Roads in HCM Lead to Payroll?

In a nation characterized by fragmented social services for retirees or the unemployed and the absence of universal healthcare, the essential functions of human resources are channeled through payroll. This is where the majority of HCM service providers focus their offerings.

• Are you looking to recruit a new team member? The hiring process is managed through payroll.
• Do you need to track attendance and PTO? Accrued hours are processed through payroll.
• Is an employee injured on the job? Workers' compensation benefits are administered through payroll.
• Are you reporting your earnings to the IRS? Financial reporting is conducted through payroll.
• Are you claiming tip credits for your waitstaff? Tax filing is handled through payroll.

In essence, if you are unable to provide your staff with the fundamental elements of domestic stability, you cannot effectively operate a business.

When facilitating the transfer of these essential elements, all processes lead to payroll. Does this imply that you are at a disadvantage if you require HR services beyond this scope? Not at all. Lift HCM has established enduring partnerships with a network of reputable providers. We will connect you with someone we trust.

What Does HCM Software Do?

Creating a centralized system for tracking employee earnings and attendance simplifies generating reports for accountants and securely sharing records with regulators. HCM software, when combined with a learning management system, ensures compliance with labor laws and offers employee self-service options, saving time on finding old pay stubs.

While HCM software's tax and compliance benefits are clear, its impact on other business areas is significant. It improves talent acquisition and retention, as poor onboarding can double turnover rates. Many platforms allow posting new roles to multiple job boards and support employee referral programs, easing the transition for new hires.

The value of HCM software with an integrated LMS is growing, with 70% of millennials valuing learning opportunities, and 86% willing to stay if such opportunities exist. HCM software helps identify leadership opportunities and track salary and team changes.

A major advantage of HCM software is managing employee benefits. It simplifies handling various insurance plans, providing easy access to documentation and reducing complexities in the American healthcare system.

So Why Spring for a Service Provider?

Why do providers like Lift HCM offer services that this software already provides? If you choose to manage everything independently using HCM software, we wish you success. However, be mindful of the time investment required to master the software. Consider exploring QuickBooks as well, if your accountant has not already suggested it.

Should managing your company's human capital, its most valuable asset, remain a challenging endeavor, we are readily available to assist. Our team is prepared to support you in any way necessary.

More “Human” Capital Management

While your workforce is undoubtedly your company's most valuable asset, it is important to recognize their individuality and contributions. Regardless of any minor incidents, such as those involving the breakroom facilities, these individuals are dedicated to delivering their best efforts. They merit the same level of commitment in return. Therefore, it is essential to prioritize efficient management of both time and resources, as this is fundamental to the success of your business.

Additionally, it is important to acknowledge your own limitations. Engaging in tasks such as payroll processing late into the night exemplifies the necessity of leveraging professional services. Human Capital Management (HCM) services enable you to concentrate on your core competencies, allowing you to excel in areas where your expertise truly lies.

Apply Human Capital Management Today

If processing payroll, complying with the latest regulatory standards, or arming your accountant with the records they need to keep the IRS at bay pull you away from work you love, you might need a Lift.

Lift HCM has been powering people since 1967. From payroll to attendance to onboarding, Lift provides the stability your people need to change the world.

Want to learn more about how you can free up more time to grow your company through human capital management? We’ll walk you through the benefits of partnering with a payroll provider to help you decide if it’s right for you!