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What is Human Capital Management (HCM)? Software Solutions for Human Resources - HRM

HRM software solutions for Human Resources
Human Capital Management (HCM) software, often referred to as HRM software or human resources software (HR software), is an application that supports companies in the human resource management process, managing the complete employee development cycle, from recruitment to retirement. In a single application, companies can benefit from functions for digitizing recruitment, payroll, timekeeping, training and reporting processes. Human resources are thus viewed not as a cost, but as a core asset for businesses, and human resources programs allow for the maximum use of the workforce through strategic investments and management.
<span style="color: #E87821;">What is HCM? </span>

What is HCM?

HCM is the acronym for the English name of the Human Capital Management solution. Other names used are: HRM – Human Resources Management; HR – Human Resources; HRMS – Human Resources Management System; HRIS – Human Resources Information System.

HCM vs. HRM

Similarities between HCM and HRM

The most important similarity between HCM and HRM is that both target the HR department that deals with the workforce/employees and all related aspects such as:
  • Hiring
  • Recruitment
  • Orientation
  • Training and Development
  • Compensation and Benefits
  • Performance Evaluation and Analysis
  • Other Employee Activities
Similarities between HCM and HRM
As human resources are considered the most valuable asset of any business, attention and efforts are directed towards maintaining a high level of satisfaction among employees, so that this aspect determines their improved performance in the activity they carry out.

The difference between HRM and HCM

HRM system provides basic HR needs within small and medium-sized companies. Online HCM solutions, on the other hand, cover a wider range of activities, have extensive functions for managing the complete employee development cycle and are designed to support the global compliance and international payroll requirements of large enterprises.

HCM solutions also have advanced analytics capabilities, include industry benchmark data, and complex reporting functions. Such an HR solution provides control and acts at a much more comprehensive level, addressing aspects of the company at a strategic level, not just operational or administrative.

Online HCM systems cover needs such as tracking and implementing effective long-term human resource strategies, maximizing employee potential and simplifying HR processes, in parallel.

HCM / HCMS Definition

Human Capital Management is a set of practices related to human resource management, focused on the need of an organization to improve the processes of recruiting, managing and developing employees, with the aim of increasing their value to the company. A definition for HCMS would be the following: it is a software application that integrates and combines the activities and practices of the HR department with information technology. With such a human resources program, a company can create a database that includes all information about employees, but also about other aspects that involve them.

What is the Purpose of HR Software?

The purpose of human resources software is to provide control over how the organization manages workforce aspects in order to ultimately maximize the potential of human resources, while simplifying HR activities.
What is the Purpose of HR Software

What does an HCM system do?

Human resource management systems transform traditional HR administrative functions, such as recruiting, training, payroll, compensation, and performance management, into opportunities to drive performance. HCM software records and stores a large volume of employee information in a database and automates human resource processes. Top HR solutions offer advanced analytics capabilities, which help employers easily gain insights into the best way to recruit and retain talented employees.

  • Ensure a better employee experience
  • Simplify HR / internal administration processes
  • Manage employee data efficiently
  • Getrelevant information about the workforce
  • Supports employee development and performance improvement

History and Evolution

The first personnel management programs had as their main function payroll. Gradually, the increasing volume of data determined the need for HR programs in companies to manage employees and human resource information. HRIS, prevalent in the 1980s, evolved from keeping records of employee data and payroll to complex analytical tools, just as human resource management began to focus on activities aimed at increasing employee productivity. Therefore, the new applications that appeared included functions specifically designed for attracting, retaining and properly rewarding the workforce.

Current human resources programs

By 2000, human resource programs had come to include capabilities for recruiting and managing personnel, timekeeping, payroll, compensation management, employee training, expense reporting, and performance management. Today, human resource management software systems are equipped with a wide variety of functions based on high-performance technology, being adapted to the most specific needs. The automation of administrative procedures has led to major time savings and the possibility of creating the most appropriate strategies for managing personnel and all HR processes.

HR in the Cloud

Mobility, data security and real-time access to key information are vital elements for the success of an organization that relies on human resources. A cloud HCM solution allows you to securely store and easily manage all data in the electronic file of each employee, thus always having an electronic library with the entire set of documents and documents organized and up-to-date. A cloud HR software offers you security, control, automatic updates and sustainability.

Who Uses HCM Software?

When we talk about human resources software, we are talking about a solution that can be used by any business, regardless of its size or field of activity. Such an HCM solution is used by those who want to efficiently manage human resources, automate HR processes and, at the same time, achieve exceptional results by motivating employees. The human resources management system is usually used by companies that want to get rid of complicated HR processes, repetitive tasks and stacks of documents and who want to increase the company’s performance with the help of human resources.

  • HR Managers

    They can use human resources management software to manage the entire employee development cycle in the company, from hiring to retirement. The system offers them a single information center for the data of all candidates and employees in the company. Managers can create the company's organizational chart, monitor employee performance and design strategies for better utilization of human resources, the software allowing for fast, real-time reporting on all HR processes. At the same time, a human resources management system facilitates personnel administration for groups of companies.

  • Employees

    They use HR software to access the information they are interested in and to improve collaboration and communication, including facilitating communication with employees in different locations. A human resources management solution also brings significant time savings thanks to the employee self-service module. In addition, HR software simplifies the onboarding process, provides transparency over activities and supports the development of employee skills.

In addition to real-time access to data (at team, department or company/group level) and contributing to the clarity of the organizational structure and reporting flows, a high-performance HR application supports the rapid and consistent conduct of performance evaluations. Furthermore, recruitments are carried out quickly, as are most of the administrative aspects of HR.

When Do You Need Human Resources Software?

The usefulness of an online HCM software appears when the management of human resources, information and reports, as well as other administrative/organizational aspects encounter difficulties that tend to affect the company’s performance and business image.

The large volume of information, difficult to manage and access, difficult report generation, problems in communication or performance evaluation and lack of accuracy – are just some of the challenges encountered in companies that do not use a high-performance human resources system. Typically, businesses that have not automated their HR processes waste a lot of time on repetitive and error-prone manual activities, blocking HR department staff with tasks that do not add value to the business.

The Importance of an HCM System

The changes in the labor market in recent years and the adoption of new ways of working (remote, office or hybrid working), together with changes in employee expectations – are some of the aspects that have led to new challenges in the HR area. As a result, companies have become increasingly aware of the importance of human resources software and the digitalization of the HR area.

 

Nowadays, with a single HR application, businesses have the opportunity to optimize all their HR processes, efficiently managing recruitment, payroll, timekeeping, training and reporting activities. In companies that use high-performance systems for human resource management, employees feel connected, stimulated, productive and have the necessary tools at their disposal to improve their performance, which leads to a high degree of satisfaction among them. Communication with employees and between employees is stress-free, efficient and to the point, therefore the results obtained by them tend to positively influence the future of the company.

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Functionalities of Human Resources Management Software

A high-performance HCM software usually includes a wide range of useful HR functions, from administration to recruitment to human resource performance management. Thanks to the modular structure, companies have the opportunity to choose those functionalities that suit the needs of each individual organization.

Modules and functionalities that you can find in a modern HR software:

This module allows you to manage your organization’s structure and existing roles. The module includes functions for creating the organization’s role catalog, analyzing personnel by department, and mapping the competency matrix.
With this module you can manage the history of all employees, from CV receipt to onboarding. The module includes functions for: approval flow management, advanced reporting, onboarding stage management, mobile use, integrated recruitment source management, digitalization of the recruitment process, personal data management in compliance with GDPR.
The module helps you quickly obtain complete reports for employees and collaborators. Its functionalities are: management of any work schedule, mobile timekeeping application, automatic timesheet management.
The module helps you quickly and easily access all the data needed for salary calculation. Timekeeping for employees and collaborators, time management, generation of customizable reports, customized configuration for calculation elements, automatic calculation of sick leave – are some of the areas covered by this module.
It is intended for documentation management for all employees and collaborators. The functions allow multi-company administrative management and personnel activities management, centralizing the entire personnel administration activity, at the organization or group of companies level.
This module helps you centralize the entire onboarding activity of the future employee. The human resources software makes it possible to automate processes such as the automatic generation of the employment contract based on templates and helps you manage integration activities.
This module helps you ensure operational transparency by disseminating the company’s overall objective down to the last team member, so that all employees have clear and aligned objectives at department and organizational level. The human resources software helps you automatically collect feedback and measure employee performance and, last but not least, support them in the personal development process.
It makes it possible to easily manage training activities in the organization, providing feedback on programs and HR process automation functions that allow optimizing the approval flow and more.
A modern HR software includes self-service options, allowing employees to perform a wide variety of activities on their own. Through this module, managers, together with other employees, have access to documents and data of interest in real time, through their own accounts. The system makes it possible to generate requests and set up approval flows. In addition, employees can solve a series of tasks directly from their mobile.
A modern online HCM solution facilitates internal communication, both formal and informal, with the help of an employee portal. The functions of this module provide support for onboarding, support collaboration between employees, and provide support in internal recruitment activities.
Through this module, the software gives you quick access to centralized data to stay up to date with everything that is happening in the HR department. Users have both data analysis functions (HR Analytics) and can easily create and distribute flexible reports, improving the decision-making process.
Benefits of Using Human Resources Software

Benefits of Using Human Resources Software

For companies that do not have human resources software, employee management is a source of repetitive and time-consuming tasks that require additional staff and high costs. Using a human resources management system eliminates these aspects and brings a wide range of benefits, the results obtained with HCM software are not limited to the HR department.

Top benefits and advantages obtained with HR software:

  • 1. Increased productivity

    Increased productivity throughout the organization, thanks to workflow automation and HCM functions that support employee retention and motivation;

  • 2. Considerable cost reduction

    Considerate cost reduction – an advantage resulting, among other things, from increased productivity and the elimination of errors and repetitive manual tasks;

  • 3. Correct centralization of information

    Correct centralization of information and making better decisions in a shorter time, the online HCM software ensuring quick access to a well-established database and various detailed reports;

  • 4. Improving communication

    Improving communication between employees within teams, but also between departments, an HR system providing access to useful information through the company's organizational chart;

  • 5. Traceability and control

    Traceability and control through accurate recording of all relevant information and careful monitoring of the flow of documents and activities concerning human resources;

  • 6. An improved experience

    An improved experience for human resources thanks to quick access, from anywhere, to correct documents and information, but also through optimized management of each stage of the employee's development cycle;

  • 7. Strict compliance with applicable legislation

    Strict compliance with applicable legislation (including compliance with GDPR regulations) – ensured by using online HCM software provided by a trusted provider.

How Do You Choose an HR Solution?

To choose the best HR software for your company, you should consider entering into a partnership agreement with a trusted software solution provider and taking into account the specific needs of your business. Therefore, it is recommended to first conduct an in-depth analysis of your HR needs and objectives.

 

Therefore, the right HCM solution for your business will have to meet the specific requirements of the company you represent and have functionalities based on modern technologies that allow easy management of the entire employee development cycle. A good HR software offers access to information from anywhere and quickly and securely manages a very large volume of data, comes with a friendly interface and is able to quickly simplify HR processes, while also amplifying, without too much effort, the value of human resources in a company.

Example of HCM Software

An example of a high-performance human resources software on the Romanian HR solutions market is SeniorHR, an HCM solution provided by Senior Software. With a friendly interface, the SeniorHR system allows the management of recruitment, payroll, timekeeping, training and reporting processes, in a single application.

The HR software integrates with any ERP system and has multiple functionalities, with companies having the opportunity to choose those modules that meet their own business needs. Senior Software’s online HCM solution is customizable, scalable and offers all the necessary tools for each employee to contribute to the success of the organization, highlighting them wherever they are.

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What is Human Capital Management (HCM)? HRM Software Solutions for Human Resources