There are seemingly endless options for Human Capital Management (HCM) software on the market. But how do you know which one is right for your business? And what factors should you consider during your search? Depending on your approach, implementing a new HCM can provide tremendous value by automating and strategically managing your entire employee lifecycle, or it can be an expensive headache for your HR team with little value added.
There are seemingly endless options for Human Capital Management (HCM) software on the market. But how do you know which one is right for your organization? And what factors should you consider during your search? Depending on your approach, implementing a new HCM can provide tremendous value by automating and strategically managing your entire employee lifecycle, or it can be an expensive headache for your HR team with little value added. In this article, the experts at ERP Advisors Group dive deep into the world of HCM and how to set yourself up for success with your new software.
HCM stands for Human Capital Management and is a type of software designed to manage Human Resources within an organization. These applications encompass the HR and payroll needs of an organization to varying degrees depending on the “tier” and focus of the solution.
HCM, HRIS, and HRMS are all examples of solutions that handle human resources activities that some may use interchangeably. However, they are different solutions that fulfill different needs.
Beyond the three types above, there are also many “best-of-breed” human resources tools that are available for specific functionality needs. Point solutions can fill gaps that an organization’s existing human resources software either does not include or does not meet requirements for. These include Applicant Tracking Systems (ATS), Payroll systems, Learning Management Systems (LMS), Benefits Administration Software, and many more.
In order for your organization to grow, it will need software in place to manage employees and their needs. Organizations with a high growth trajectory may be able to get away with the basic functionality offered in their existing system while they are still smaller, but as they expand and hire new people, a more robust solution will be required to handle the evolving needs of their employees. Processes such as application tracking, hiring, onboarding, and performance management can be managed in the system, optimizing your organization’s human resources and increasing efficiency across the board.
It is important to understand if your organization is ready for and truly NEEDS an HCM solution rather than relying on a network of point solutions. Many smaller businesses with fewer employees require a solution to handle processes like payroll but do not need a full-blown HR software platform strategy.
To determine if your organization is ready and needs to implement an HCM, consider some of the following factors:
Overall, it all comes down to the unique needs that define how your organization operates. Some organizations may need an HCM, while others may not. Define your specific requirements in the human resources department before ever speaking to vendors.
Once you have determined that your organization is ready for and needs an HCM, next consider key factors in your business requirements. While the user experience, cultural fit, and personal preferences may play into the selection of your HCM, it is important to stay rooted in what the system MUST be able to do.
Document your requirements thoroughly before holding product demonstrations with software vendors, so you have a basis by which to evaluate each vendor and know exactly what you need the vendor to show you.
Finding the right HCM vendor for your organizational needs is typically the biggest challenge in the selection process. Software vendors have very strong sales teams, who will do whatever it takes to “woo” you into selecting their product. In order to successfully select an HCM for your team, you must navigate the fluff that is often found in software sales pitches. Ask the vendors you are speaking with the hard questions that are relevant to your business model.
Do you have specific time clock requirements or payment-compensation models? Are there industry specific needs, such as those seen in the construction industry? By asking about specific functionality, you can expose where certain vendors’ products are weak and where they are strong, ultimately trimming your list before doing demonstrations with them.
When evaluating HCM for your business, there are some key requirements to consider that will apply to most organizations, regardless of industry or size:
Specific functionality requirements for HCM solutions varies between different organizations and their structure. Some common HCM functionality requirements include:
These are often essential capabilities for any business seeking an HR software strategy for the long-term.
When considering different HCM vendors and solutions for your organization, utilizing the following key tips will help guide your decision:
While not all organizations need a full-blown HCM, if you determine that yours does, it is critical to understand how to navigate the selection process. By following best practices and pushing through the “woo” of vendor sales pitches, your organization can find the right software for your industry and employees. If you are currently looking for human resources software, we can help! Schedule a free consultation with our team today to discuss your selection process further!