Refers to a set of activities that convert traditional Human Resource (HR) functions into opportunities that lead to increased efficiency, interest and revenue for the organization. In HCM, organizations commit to maximizing the value of human capital through proper management and investments.

Common functions of HCM include:

• Workforce planning: evaluating the company’s labor and skills needs to meet future staffing needs
• Compensation planning: providing competitive compensation to keep up with inflation and allow employees to live a quality life
• Recruiting and hiring: finding, evaluating and selecting top candidates for open roles
• Onboarding: integrating new employees to the company through new hire orientations, mentorship and reboarding
• Training: providing the opportunities and resources employees need to improve their skills and capabilities
• Time and attendance: tracking work hours through a timecard or punch card for payroll and benefits
• Payroll: providing compensation, calculating employee hours, and keeping track of financial documentation and transactions
• Performance management: ensuring employees contribute to the organization through continuous feedback, goal setting, and performance review

As described in Forbes (June 2024, What Is Human Capital Management?) a number of industry terms are associated with HCM:

• Human Resources (HR): functions such as recruitment, onboarding and managing employee-employer relationships
• Workforce Management: absence management, time and labor, and workforce health and safety
• Talent Management: activities involved in the talent life cycle such as recruitment, onboarding, performance management, career development, and succession planning
• Human Resources Information System (HRIS): keeps track of employee records and HR policies or procedures