What Is Human Capital Management? A Career Guide

Written by Coursera • Updated on

Discover human capital management, the role of a human capital manager, and the steps for entering this field.

[Featured image] A human capital management (HCM) staffer sits at a desk and speaks with another company employee.

Human capital management (HCM) refers to a set of business processes that empower workers, connect workflows, and streamline daily operations within an organization. Human capital management encompasses employee productivity strategies, and the technology HCM teams use to organize data. 

An HCM team or manager can benefit an organization in several ways, including: 

  • Increasing productivity among employees

  • Retaining employees and keeping them engaged 

  • Managing employee data 

  • Enabling business growth 

Human capital management is becoming increasingly important, especially as work evolves relative to COVID-19. With more employees working remotely and increased demand for specialized skills and workforce data, HCM teams and managers can offer comprehensive support across an organization and bring out the best in everyone. 

HCM vs. HRM

While researching human capital management, you may have come across similar terms like human resource management. Some organizations may use these terms interchangeably, given that there is some overlap between them. Keep these important similarities and differences in mind as you consider career options: 

Human capital management Human resource management
Includes traditional HR functions, as well as workforce rewards, training, engagement, handling conflict, and retention.Includes traditional HR functions such as hiring, compliance, reporting, and payroll.
Invests in employees' professional development to ensure they provide economic value to the company.Implements learning management systems to track employee training and results.

HCM jobs 

There are several common roles in HCM, as explored below:

Human capital manager

According to Glassdoor, human capital managers in the US make an average of $94,005 as of July 2022. 

Tasks and responsibilities you might have in this role include: 

  • Providing employees with professional development opportunities 

  • Offering services to employees such as counseling, coaching, and mentoring

  • Creating job descriptions

  • Devising plans to support and train underperforming employees 

  • Recommending solutions to conflicts that arise among employees 

  • Overseeing the company’s benefits program and ensuring employees receive the proper benefits 

  • Providing employees with guidance on company policies and procedures 

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specialization

Leading: Human Resource Management and Leadership

Get ready for the Future of Work. Leading people and organisations to adapt, compete and succeed in a complex, global environment.

4.9

(1,547 ratings)

26,632 already enrolled

INTERMEDIATE level

Average time: 6 month(s)

Learn at your own pace

Skills you'll build:

Strategic Thinking, Human Resources (HR), Visionary leadership, Organisational design, Value Chain, Organisational leadership, Organisational alignment, Change planning, Motivation, Diversity and Inclusion, Communication, Staff Management, Leadership Development, Leadership, Brand Management

Human capital consultant 

According to Glassdoor, human capital consultants in the US make an average of $87,722 as of July 2022. 

Tasks and responsibilities you might have in this role include:

  • Advising organizations on how to improve their culture, leadership, compensation structures, and employee professional development 

  • Analyzing current workforce needs and trends that will determine recruitment strategies

  • Training managers and supervisors on effective leadership strategies

  • Developing strategies to improve employee engagement   

Human capital analyst

According to Glassdoor, human capital analysts in the US make an average of $85,780, as of July 2022. 

Tasks and responsibilities you might have in this role include:

  • Analyzing current HCM strategies within an organization

  • Evaluating current market trends and management strategies

  • Helping organizations implement new HCM solutions 

As you gain experience in human capital management, you may find opportunities to fill more advanced positions, such as director of human capital or vice president of human capital. 

Organizations hiring human capital managers, analysts, consultants, and directors include Deloitte, Accenture, the US Air Force, IBM, Paychex, Goldman Sachs, J.P. Morgan, Goodwill, UnitedHealth Group, Comcast, University of Phoenix, and Hewlett Packard Enterprise, among others. 

How to start your HCM career 

If you are ready to begin this career path, follow the steps below to streamline your process:  

1. Obtain an HR education and experience.

For most HCM positions, you’ll need at least a bachelor’s degree. Degrees in human capital management exist but are less common than degrees in human resources or human resource management. In your job search, you may find that some employers are open to hiring candidates with degrees in other disciplines, such as business or psychology. 

Consider taking courses or getting a certification in human capital management and gaining some entry-level experience in an HR role.

2. Become proficient with human capital management software.

HCM software is sometimes called a human resource information system (HRIS) or human resource management system (HRMS) and is a big part of how HCM teams operate. The software streamlines and simplifies many processes, including payroll, time tracking and attendance, performance management, record keeping, and more. 

Learning how these systems work can help you prepare for an HCM role. Examples of software that you can investigate include: 

3. Build workplace skills for HR.

In addition to learning the technical skills of human capital management, you’ll also need solid workplace skills. As you take courses and gain experience, be sure to hone your ability to collaborate with others, lead teams, mentor new hires, solve problems, and develop rapport with coworkers.  

Having these skills can enable you to perform key HCM functions with success, including: 

  • Hiring the right talent

  • Monitoring performance

  • Offering training and professional development opportunities 

  • Delivering a superior employee experience 

Improve your management skills with Coursera. 

Taking online courses can be a great way to build skills related to human capital management and discover career opportunities. Explore the options below:

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course

Managing Social and Human Capital

People are the most valuable asset of any business, but they are also the most unpredictable, and the most difficult asset to manage. And although managing ...

4.6

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Average time: 1 month(s)

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Skills you'll build:

Decision-Making, Change Management, Human Resources (HR)

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Human Resource Management: HR for People Managers

Become a better manager of people. Develop strategies and skills for hiring, managing performance, and rewarding employees.

4.8

(9,834 ratings)

132,772 already enrolled

BEGINNER level

Average time: 6 month(s)

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Skills you'll build:

Performance Management, interviewing, Human Resources (HR), Onboarding, managing people, Resource Management, Hr Strategy, Recruiting, Recruitment, Performance Appraisal, Organizational Culture, Incentive, Compensation And Benefits, Compensation Analysis

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