Human Capital and it's Understanding
Sudeep Kumar Sen, Vice President, Gi Group, India, 0
Human Capital refers to the economic value of a staff’s learnability from experience, adaptability to the changes at work place, exhibition of skills and adoption of new skills to perform and meet the organization goals consistently. “Having understood about human capital, next important aspect is human capital planning”.
Human Capital planning is a systematic process for identifying the resource pool and its capabilities to meet organization goals and developing the strategies to meet the requirements to fulfill those goals.
Five Elements of Human Capital
1.Skills, Qualifications, and Education.
2.Work Experience& skill enhance at work place.
3.Social and articulation Skills.
4.Disciplinary aspects, Habits and Personality Traits.
5.Personality – Image building and brand.
With focus on productivity and constantly improving human capital to meet the efficiency in terms process excellence, faster turnaround rates, efficient talent search, screening and on-boarding, the biggest trend we will see more companies adopt in the near future is an emphasis on the importance of human capital management, which has a direct correlation in terms of impact to the bottom line too. Hence, the test of the agility of the organizations as the Human capital management trends are shifting all the time but they’re essential to keep up with to ensure that the human capital strategy is effective and helps the organizations reach their goals.
Human Capital Planning
The first step is to make, create an organization chart with value, vision and thought leadership wherein final all of them converge to meet the organization goal. Once agreed, next step is execution and at this stage, one has to determine what positions to be hired, the job descriptions for each and the hierarchy and chain of command of employees. The detailed job descriptions help us to determine the skills needed in the staffs.
In addition to creating an organization chart for your current needs, human resources planners project your needs for the foreseeable future to guide you in preparing your staff for advancement and to help you more effectively recruit.
Cost of the Employee
The cost for an employee can go well beyond her salary. By the time you add in payroll taxes, benefits, training, wellness programs, legal compliance, workers’ compensation insurance and claims, equipment and office space, your employee costs can exceed 25 percent of salaries. Planning your human-capital requirements includes knowing the exact costs of each position you have, which helps you determine what you can afford to spend on additional HR needs and what you can offer current employees in raises and bonuses.
Recruiting
After you determine your organizational needs and your budget limitations, you can effectively recruit new employees when you need them. Human-capital planning includes creating recruiting guidelines, procedures and practices you will use each time you look to fill a new position. This includes writing or updating job descriptions, setting compensation levels, posting wants ads, reviewing applications, conducting interviews, background and reference checks and making employment offers. HR planning requires knowledge of and adherence to state and federal employment laws.
Learning and Development
The more you train your employees, the more valuable your human capital. HR planners work with managers to determine the skills that require improvement and take steps to help employees get the necessary training. Training methods include onsite workshops and seminars, tuition reimbursement for college classes, certification courses and sending employees to conferences.
Management
HR planners take steps to ensure employees are properly managed after they join an organization.
This includes creating company policies and procedures and providing ongoing management training for supervisors. Human-capital planners create two-way feedback systems, allowing managers to critique subordinates and workers to critique their supervisors. Human-capital planning also includes forecasting labor needs and employee scheduling to avoid unnecessary labor costs or worker shortages that can slow down operations.
What is the Difference between HRM and Human Capital Management?
Human resource management (HRM) primarily focuses on core administrative HR functions such as maintaining employee records and administering benefits. Human capital management is a broader term that includes HRM functions as well as strategic functions such as analytics and performance management.
Cost of the Employee
The cost for an employee can go well beyond her salary. By the time you add in payroll taxes, benefits, training, wellness programs, legal compliance, workers’ compensation insurance and claims, equipment and office space, your employee costs can exceed 25 percent of salaries. Planning your human-capital requirements includes knowing the exact costs of each position you have, which helps you determine what you can afford to spend on additional HR needs and what you can offer current employees in raises and bonuses.
The more you train your employees, the more valuable your human capital
Recruiting
After you determine your organizational needs and your budget limitations, you can effectively recruit new employees when you need them. Human-capital planning includes creating recruiting guidelines, procedures and practices you will use each time you look to fill a new position. This includes writing or updating job descriptions, setting compensation levels, posting wants ads, reviewing applications, conducting interviews, background and reference checks and making employment offers. HR planning requires knowledge of and adherence to state and federal employment laws.
Learning and Development
The more you train your employees, the more valuable your human capital. HR planners work with managers to determine the skills that require improvement and take steps to help employees get the necessary training. Training methods include onsite workshops and seminars, tuition reimbursement for college classes, certification courses and sending employees to conferences.
Management
HR planners take steps to ensure employees are properly managed after they join an organization.
This includes creating company policies and procedures and providing ongoing management training for supervisors. Human-capital planners create two-way feedback systems, allowing managers to critique subordinates and workers to critique their supervisors. Human-capital planning also includes forecasting labor needs and employee scheduling to avoid unnecessary labor costs or worker shortages that can slow down operations.
What is the Difference between HRM and Human Capital Management?
Human resource management (HRM) primarily focuses on core administrative HR functions such as maintaining employee records and administering benefits. Human capital management is a broader term that includes HRM functions as well as strategic functions such as analytics and performance management.