Hire to retire
Cradle to grave
Outreach to offboard
Attraction to separation
Call it what you like, the employee life cycle is a common buzz phrase in human resources. Best communicated as end-to-end talent management, these stages describe an employee’s time within a particular company, and the role HR and management plays at each stage.
The employee life cycle begins with the job search and ends when an employee leaves the organization. Gallup cites seven stages in all—attract, hire, onboard, engage, perform, develop, and depart. How organizations address these stages is what is known as Human Capital Management.
What is Human Capital Management?
Human Capital Management (or simply HCM) is a set of practices and processes an organization utilizes to manage the employee life cycle, with the intent to optimize talent (human capital) at every stage.
These actions fall within three categories:
HCM begins long before a new employee reports to work on their first day. Talent acquisition refers to all of the processes that lead to the hire—and those necessary to get the new employee up to speed and productive. It addresses the attract, hire, and onboard stages of the employee life cycle.
Effective HCM factors in the organization’s long-term goals when identifying and vetting candidates. The desired result? To create a process that attracts the right candidates, reduces the time from hire to productivity, and drives future growth.
The day-to-day tasks necessary to manage a workforce is talent management. It picks up where talent acquisition leaves off. It includes all tasks related to the engage, perform, develop, and depart stages of the employee life cycle.
It also encompasses all tasks related to compensation, benefits administration, and tracking employee time and attendance. While many of these are administrative in nature, they are necessary for the organization’s success. The goal of HCM is to streamline these tasks to achieve a favorable employee experience and optimal operational efficiency.
Talent optimization is the strategic side of HCM and involves all stages of the employee life cycle. With talent optimization analytics are used to guide decisions and investments related to managing the workforce.
Data is collected and analyzed to assess the organization’s strengths and weaknesses and the effectiveness of its current policies and initiatives. Talent optimization enables organizations to anticipate future trends. The goal here is to align the business strategy with talent strategy for optimal outcomes.
The Role of Technology
According to a market research report from Market Research Future (MRFR), the global human capital management software market is expected to rise to a value of $24 billion by the year 2023, growing at a CAGR of around 9% over the 2017-2023 forecast period.
The HCM software market is thriving and for good reason…
Technology helps organizations streamline their HCM efforts. Integrated solutions address all stages of the employee life cycle within one platform.
Applicant Tracking Systems (ATS) and onboarding software streamline talent acquisition by automating many processes, enabling hiring managers to be more strategic in their efforts.
Learning Management Systems (LMS) and engagement software help centralize employee development efforts, which helps build a deeply connected workforce. Payroll and time tracking tools eliminate manual data entry, helping organizations accurately compensate their employees while remaining compliant. Human Resources Information Systems (HRIS) remove many of the day-to-day administrative tasks that overwhelm the HR department.
What Every Growing Business Needs to Know
The term human capital management (or HCM) is much more than human resources jargon. It is an essential set of practices and processes organizations utilize to manage the employee life cycle.
Learn how you can use it to help leverage your business with our free resource. Get your free copy here.