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Definition of Human Capital Management:

Human Capital Management is a set of organizational practices used for recruitment, employee engagement, workforce, and talent management. These practices improve the efficiency and effectiveness of your human resources department. They ensure that you have hired the right people, with the right skill set, and they are managed them effectively. 

Here, Human capital is measuring the employee’s experience, skills, and knowledge in terms of the economic value it brings to the company. By looking at the economic value, companies can measure the ROI, and can implement steps to optimize it. These steps include skill development initiatives, health and well-being programs, career development plans that will benefit employers and employees alike. 

Strategic Functions of Human Capital Management:

Some major HCM functions include:

  • Workforce planning
  • Recruitment and onboarding
  • Attendance tracking 
  • PTO management
  • Compensation planning
  • Performance management
  • Succession planning
  • Talent management
  • HR Reporting
  • Compliance