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What is HCM Outsourcing?

Human capital management (HCM) is more than just software and processes – it's about unlocking the potential of your people. By hiring the right talent and investing in their development, you create a culture of growth – for your employees and your business. HCM tools and strategies can help you streamline this journey, maximizing your team's productivity and value to your organization.

An effective HCM strategy manages the entire employee lifecycle and can improve business processes and HR efficiency. In this article, we’ll explore how small and mid-sized businesses can outsource HCM, its meaning in HR, and the role of human capital management as a type of HR outsourcing.

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What is HCM outsourcing and how does it work?

Imagine having a dedicated team of HR experts handling everything from payroll and benefits to compliance and employee development. That's the value of HCM outsourcing, also known as human capital management outsourcing.

So, how does it work? HCM outsourcing engages a third-party vendor that gives you access to a human capital management system and experienced professionals who can handle all your HR needs, freeing you up to focus on running your business.

Think of it this way: HCM outsourcing is like hiring a superstar HR team, but without the hassle of recruitment, onboarding, and ongoing management. It gives you access to expertise you might not have in-house, while saving you valuable time and resources.

What are the 5 functions of human capital management?

Have you noticed that certain companies have a knack for attracting and retaining top talent? More than likely, the role of human capital management (HCM) plays a significant part in their success. But what exactly does HCM involve, and how does it contribute to a thriving workforce?

HCM goes beyond simply handling administrative tasks. It's a comprehensive strategy focused on keeping your team happy, productive, and growing alongside your business. This is achieved through five key functions:

  • Finding the right talent: HCM helps you attract top talent who fit your company culture and possess the competencies and skillsets your company needs.
  • Developing your people: HCM provides training and opportunities to help your employees excel in their roles.
  • Providing competitive compensation and benefits: Paying your team fairly and attracting them with perks keeps your employees motivated and engaged.
  • Navigating HR compliance: An effective HCM solution helps you stay compliant with labor laws and regulations, so you can avoid risk and fines related to noncompliance.
  • Maintaining a positive work environment: Fostering good relationships, open communication, and a sense of well-being for your employees helps create an environment in which your team feels supported and can perform their best.

What is the difference between HRM and HCM?

If you’re looking into effective employee management approaches, you might be coming across terms like HRM and HCM. While both involve taking care of your employees, understanding the difference between human capital management vs. human resources management can help you decide which approach is best for your growing business, especially if you're strapped for time and resources.

Human resources management (HRM) is the handling of day-to-day human resources, like managing payroll and benefits administration, and keeping track of employee records.

Human capital management (HCM) takes a broader view. It goes beyond the daily administrative tasks and focuses on maximizing the value of your employees, while utilizing integrated software systems to manage the employee lifecycle more efficiently. HCM encompasses strategies for training, performance management, and creating a positive work environment – all aimed at empowering your team to reach their full potential and contribute meaningfully to the company's success.

Both HRM and HCM are important, but they serve different purposes. If you're a small or mid-sized business owner with limited resources, focusing on core business functions might leave you with little time to handle all the intricacies of HR.

HCM through a full-service HR outsourcing provider such as G&A Partners can be a game-changer. It allows you to access the strategic benefits of HCM and the essential tasks of HR from a team of dedicated experts. This frees you up to focus on running and growing your business. For more information on outsourcing HCM through G&A Partners, contact us.

What is the difference between HCM and HRIS?

A human resource information system (HRIS) is a digital filing cabinet for all your employee data. It can:

  • Streamline tasks like payroll processing and benefits administration
  • Store employee information
  • Provide a secure and centralized system for everything from onboarding documents to vacation requests
  • Save time and reduce errors – allowing you to focus on more strategic initiatives

When you compare HCM vs. HRIS, you’ll see that HCM focuses on a more strategic approach to managing your workforce. It’s not just about handling administrative tasks or streamlining HR processes, rather HCM focuses on empowering your employees to become valuable contributors to the overall success of the company.

How Can G&A Help?

At G&A Partners, we’re committed to taking the burden of HR management off your shoulders, so your employees and your business can thrive. Our expert advisors offer a strategic approach to HCM and empower your company to achieve a new level of success.