How Human Capital Management Technology is Furthering the Competitive Advantage of the Future
Putting the right people in the most pivotal roles as quickly as possible—that’s the new competitive advantage.
Most of us remember firsthand or recall from film the Miracle on Ice—the story of the USA hockey team that upset the world-champion Soviets in the 1980 Winter Olympics. When questioned about his strategy and player selection coach Herb Brooks in the Disney telling of the event responds, “I’m not looking for the best players, I’m looking for the right ones.”
Want another sports movie analogy—try Moneyball. It captures the true story of Oakland A’s General Manager Billy Beane and how he used human capital data to build a leading team on the league’s smallest budget that won a record-breaking 20 games in a row.
The business world should take note. When you apply the Human Capital Management (HCM) sciences well, you don’t need all-star talent or a bigger budget to beat the competition.
This is the goal of HCM technology—to give employers a tool to effectively apply the HCM sciences.
HCM is more than Streamlining HR Processes
A lot of the time HR will look to HCM technology as a means of streamlining day-to-day HR processes (payroll, time-tracking, compliance). There is a difference between HR and HCM technology. Reducing the time and resources it takes to complete HR and personnel management tasks is essential, but it’s not the ultimate end of Human Capital Management.
Edward Lawler of USC’s Center for Effective Organizations writes that removing or reducing the transactional and administrative tasks from the HR professional is an essential first step toward applying HCM sciences to an organization. But the ultimate goal is improving the way an organization makes decisions on how and where to invest in organizational talent.
For example, employers might want to determine which people in the organization are the best candidates for investments in training, succession planning, increased compensation, or executive mentoring? The hope is that the beneficiaries of these investments will have a greater impact on the mission of the organization.
How HCM is Changing the Employer-Employee Relationship
Research from a recent internal study by Facebook revealed that employees remained with the company because they enjoyed the work, felt their talents and skills were being utilized, and believed that the company was invested in their personal professional development. Beyond a mere exchange of productivity for pay the research suggests that when the employer-employee relationship surpasses that of a utilitarian exchange, the result is a more engaged employee, greater profitability, and a more satisfying work experience.
This migration away from a utilitarian exchange toward one of mutual submission between employer and employee for the good of the organization (and their clients) is a bi-product of the Human Capital Management science in action. Increasing numbers of employers are happy to invest in employee development and workplace wellness because evidence increasingly shows that this results in a healthier bottom line. From the employee viewpoint, they are happier to work in an organization that recognizes and promotes their potential, and offers structured opportunities for advancement.
That being said, this evolving relationship between employer and employee is not an end in and of itself. Organizations exist for a purpose—whether it’s servicing a need in the market, returning a dividend to shareholders, or ministering to a cause, the needs of both employer and employee are subservient to the mission of the organization. A happy workplace that fails to deliver its essential value proposition to the market won’t survive, and arguably shouldn't. Nobody wins through corporate welfare.
When employers or employees give or demand too much from one another, the mission and the client ultimately suffer most.
Human Capital Management technology helps employers find the optimal exchange of compensation and recognition for productivity between employers and employees that results in the best possible impact on the organizational mission. That means measuring the impact of talent investments against the organizational mission.
- Did a wellness initiative reduce turnover?
- Did a safety program reduce workplace accidents?
- Did increased incentive pay result in greater sales?
- Did an employee training program strengthen the company’s succession plan?
Finding the sweet-spot in the employer-employee relationship that results in the greatest impact on the organizational mission is a goal of the Human Capital Management sciences. To that end, HCM technology organizes workforce and human capital data in manageable reports to help employers and employees approach this journey more scientifically.
Moving toward Performance Development vice Performance Evaluation
While traditional performance evaluations (ie. annual reviews) still have their place in performance management, evolving performance management best practices require more touches between employees and managers between evaluations. These increased interactions, counseling, and short-term goals between managers and employees make up the employer’s performance development plan.
James Marco, President of Saratoga HR, shares, “The fundamental difference between performance evaluation and performance development is that performance evaluation looks backward at what has happened, while performance development is about setting goals for the future, and ensuring that your staff has the support, skills, feedback and resources to be successful.” He goes on to share that “Performance feedback should happen every day, there should be nothing on the annual review that comes up as a surprise.”
Where HCM technology can help employers in building a performance development plan is providing an interactive record in which both manager and employee can interact, share notes, and track goals: One transparent record, one shared source of truth, one clear picture of employer expectations and empoyee performance.
Shaping Decisions on Farming vs. Shopping Talent
When applying Human Capital Management sciences, the goal is always to get the most qualified and competent person in the company’s most pivotal roles as quickly as possible. But the best means of reaching this goal will change depending on the market and available workforce (particularly regional unemployment rates).
When ready-talent is abundant, recruiting typically meets the goal of filling talent gaps. When ready-talent is slim, investing in training and development programs may be a surer means of filling talent gaps.
A good HCM technology will help employers identify the most effective means to fill a talent gap at a given time for a given position, allowing them to pivot their talent acquisition strategy investment based on the dictates of the market.
The Goal of a Great HCM Technology
Beyond streamlining HR and personnel management tasks, the goal of a great HCM technology is to help employers measure and manage their return on talent investments and, like Herb Brooks and Billy Beane, transform their people into their competitive advantage. This requires:
- Accurate and preferably real-time workforce and employee performance data
- Clear and understandable data-displays, charts, and reports on HCM data
- Universal and controlled access to data by all decision-makers
- Universal and controlled access to data by all employees
The goal is clarity, trust, and informed decisions—getting the right information in the hands of the right people in a format that allows them to interpret clear insights that drive business decisions. The right Human Capital Management technology should help leaders identify what is important, where to invest, and how to deploy limited resources to have maximum impact on the organizational mission.
About Benetech HCM
Benetech is a business administration and management firm specializing in employee benefits and human capital management. Located outside of Albany, NY Benetech helps mid-market employers simplify employee benefits and HCM through a unified service team and integrated technology.
To learn more about Benetech's unique appraoch to Benefits and Human Capital Management, contact us for a free assessment.