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”
Now you’re probably thinking “this sounds like HR with a marketing spin”, to which we ask “have you seen the HR team get creative?” because, yikes.
You can read 100 articles comparing HCM software to an HRMS or HRIS; 100 articles comparing HCM service providers to ASOs, PEOs, or EORs. Each claims there are distinctions and the superior term covering the broadest range of functions happens to be what they sell. So WTF?
Look, while these terms can be different, they lack enough consensus for a concrete definition. Absent that, it becomes all too easy to lean on what’s implied and draw vague distinctions to say “they can’t do what we do”.
Truth is, “they” can. If not, they’ll earn commission referring you out to those who can. You were in marketer country the second your assumptions were subjected to their spin. That’s why it’s important for prospective consumers to ask what their vendors do, what they do, what they don’t, and what they charge (as some services are only offered as an add-on). Just remember: all roads lead to payroll.
Why Do All Roads in HCM Lead to Payroll?
In a country with fragmented social services for the retired or unemployed and no universal healthcare in sight, the instrumental functions of human resources flow through payroll. That’s where most HCM service providers concentrate their offerings.
- You want to recruit a new team member? Hiring them flows through payroll.
- You want to track attendance and PTO? Accrued hours flow through payroll.
- Employee injured on the job? Workman’s comp benefits flow through payroll.
- Reporting your earnings to the IRS? Financial reporting flows through payroll.
- Claiming tip credits for your waitstaff? Filing taxes flow through payroll.
Simply put, if you can’t supply your staff with the fundamental building blocks of domestic stability, then you can’t run a business.
When facilitating the transfer of those building blocks, all roads lead to payroll. Does that mean you’re out of luck if you need HR services that fall outside this umbrella? No. Lift HCM has forged long-standing partnerships with a network of quality providers. We’ll hook you up with someone we trust.
What Does HCM Software Do?
Having a central hub for tracking employee earnings, attendance over time makes running quarterly and annual reports easier on your accountants. But they’re far from the only ones who benefit from this access. HCM software makes it easier to securely share relevant records with local, state, and federal regulators for audits or inspections. When combined with a learning management system to monitor completion of mandatory training, these features streamline the work of complying with labor laws. In that same vein, most HCM software offers employee self-service options so you spend less time fishing around in filing cabinets for five-year-old pay stubs.
While you can’t ignore the benefits of HCM software on taxes and compliance (especially with so much more time on your hands), the immediate gratification it provides makes it easy to overlook the benefits of HCM software in other areas of business.
Quality HCM software chips away at inefficiencies in talent acquisition and retention. Organizations with poor onboarding processes are twice as likely to experience employee turnover.
Many platforms let you post new roles to multiple job boards at once and facilitate the implementation of an employee referral program. After selecting a candidate, the onboarding features make barreling through the red tape a breeze! This is important, as bad onboarding has been shown to double the turnover rate in some organizations.
The value of HCM software with a native LMS is only growing stronger, as research from Middlesex University found 70% of millennials listed learning and development as a factor which impacted the decision to remain in their roles while 86% confirmed they’d stay if it were offered.
Once armed with the skills to climb to greater heights, an HCM will help you find opportunities for the leadership you’ve cultivated to shine. Your HCM software should have analytics and reporting capabilities which help identify opportunities for up-and-coming leaders to maximize their impact. It’ll also help you track any changes in salary and team structure.
Finally, one of the biggest benefits of HCM software is, well, your benefits. Managing medical, dental, life, pet, and other insurance plans is a mess without a central hub to facilitate enrollment.The relief of having easy access to insurance documentation makes facing the inevitable complexities of the American healthcare system just a little more bearable.
So Why Spring for a Service Provider?
Why do providers like Lift HCM offer services this software already provides? Well, if you want to manage everything yourself using HCM software, good luck and godspeed! Try to avoid spending all the time you were trying to save with HCM on summiting the learning curve. Check out QuickBooks while you’re at it—if your accountant didn’t mention it already!
On the off chance managing the human capital of your company (i.e. its most important asset) is still a Herculean task (it is) and the Justice League isn’t answering your calls (they aren’t), we’re always available to lend a hand. Our team can wear capes if it helps.
More “Human” Capital Management
While your workforce might be your company’s most valuable asset, they’re not livestock. No matter what Larry did to the fridge in the breakroom.
These are human beings giving you their best. They deserve your best in return. So why spend time doing anything less? After all, time is money, and being smart about managing both is how you built a business in the first place.
Don’t forget, you’re human too. Processing payroll into the wee hours of the morning (i.e. ”working harder, not smarter”) paints a perfect picture of how valuable providers can be. HCM services keep you focused on bringing your A-game to what you really do best (because payroll ain’t it!).
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!
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