What Is Human Capital Management? A Career Guide
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.](https://d3njjcbhbojbot.cloudfront.net/api/utilities/v1/imageproxy/https://images.ctfassets.net/wp1lcwdav1p1/18xFYFTPys0s1oKhexLzuW/4b0f2a802f39256c871c235b4ab21efc/GettyImages-1273390394.jpg?w=1500&h=680&q=60&fit=fill&f=faces&fm=jpg&fl=progressive&auto=format%2Ccompress&dpr=1&w=1000&h=)
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
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
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
Conducting exit interviews with departing employees
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:
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
BEGINNER level
Average time: 1 month(s)
Learn at your own pace
Skills you'll build:
Decision-Making, Change Management, Human Resources (HR)
specialization
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
BEGINNER level
Average time: 6 month(s)
Learn at your own pace
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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This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.
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