Over recent years, businesses worldwide have increased their interest in the field of Human Capital Management (HCM). As a tool to foster and improve employee engagement, HCM represents an area that extends beyond basic human resources, providing a comprehensive approach to employee management and driving considerable benefits to businesses.
Here are five evidence-backed strategies showing how HCM heightens employee engagement within organizations.
1. Holistic Employee Management:
Human Capital Management incorporates all aspects of human resources, such as recruitment, onboarding, employee record-keeping, performance evaluation, and even retirement preparation. By centralizing and streamlining these processes, HCM promotes efficiency and enhances the employee experience, which, in turn, boosts engagement. A study by Forbes showed that 89% of organizations with strong HCM reported better employee engagement.
2. Personalized Training and Development:
HCM systems have functionalities that can identify skill gaps and provide personalized training based on an employee’s career trajectory. This helps secure employee commitment, as evidenced by a LinkedIn survey stating that 93% of employees would stay longer at a company that invested in their career development.
3. Transparency and Communication:
A key component of HCM is its focus on salient communication and transparency, particularly evident in performance management. Regular feedback via HCM tools keeps employees informed about their performance and provides avenues for continuous improvement. Research from Harvard Business Review indicates that 72% of employees believed they could improve their job performance if their managers provided corrective feedback.
4. Inculcating a Recognition Culture:
Engagement can be substantially amplified when employees feel recognized and appreciated. HCM systems can help establish a robust culture of recognition through features like peer-to-peer accolades or special achievement badges. A Gallup survey indicated that employees who do not feel adequately recognized are twice as likely to say they will quit in the next year.
5. Enhancing Work-Life Balance:
Modern HCM systems offer capabilities like remote work possibilities or flexible scheduling, which can significantly contribute to a healthy work-life balance – a vital contributing factor for engagement. A FlexJobs survey found that 78% of employees confirmed that flexible job opportunities increased their job satisfaction.
As an indicator, the global HCM market–valued at approximately $17.6 billion in 2020–is expected to grow at a CAGR of 9.4% from 2020 to 2027 (Grand View Research). This growth is largely driven by the compelling shift in companies towards remote work, digital transformation, and a rising need for streamlining HR processes.
Gallagher, a global insurance brokerage, risk management, and consulting firm, recently harnessed the power of cloud-based HCM to improve their employee engagement. With over 34,000 employees across 45+ countries, the company transitioned from a legacy HR system to a comprehensive HCM platform. As a result, Gallagher increased data accuracy, administrative productivity, and improved overall company culture – showcasing real-world proof of HCM’s benefits to engagement.
As organizations continue to strive towards a higher level of employee engagement, HCM stands out as a pivotal strategy. Companies now realize that their employees are not just a resource, but also a valuable asset which can be developed and managed to achieve outstanding results and success. Businesses globally are investing in HCM solutions aiming to retain, engage and employ a highly motivated workforce, capable of driving growth and innovation. Utilizing HCM-centric approaches are proving to be more than a trend – they are becoming an essential business directive.
Original Source: https://www.hrmorning.com/articles/how-hcms-boost-employee-engagement/
