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Human capital management (HCM)

14 June 2007 17:03

Human capital management (HCM) has sometimes been described simply as the new name for human resource management. However those active in HCM say this interpretation misses the point.

This page provides links to a broad range of resources relating to human capital management from Personnel Today, including our blog and a podcast. But we also aim to present here a wealth of other information about human capital management from throughout the internet.

'	Human capital management - what's it all about? A Personnel Today podcast in association with Northgate HR
Karen Dempsey interviews Northgate HR's Steve Foster (pictured), who gives an accessible account of what human capital is and how you can embrace it in your organisation.

'
Human capital management - what's it all about? A Personnel Today podcast in association with Northgate HR

Karen Dempsey interviews Northgate HR's Steve Foster (pictured), who gives an accessible account of what human capital is and how you can embrace it in your organisation.

What is human capital management?

The Chartered Institute for Personnel and Development (CIPD) has described human capital management as the “skill, experience and capacity to innovate, that is owned by individuals”, a sub-category, alongside social and organisational capital, of intellectual capital.

In June 2007, Wikipedia described human capital as “the stock of productive skills and technical knowledge embodied in labour”. It then goes on to look at how the term was used by economist Adam Smith in the 18th century before being used by 1950s economists such as AW Lewis and Arthur Cecil Pigou.

Meanwhile the International School of Human Capital Management (ISHCM) describes HCM as the term which is used to describe an organisation’s multi-disciplined, integrated approach to optimising the capabilities and performance of its management and employees.”

The term 'human capital' reflects people as assets – as opposed to resources which is implied by the term 'human resources'. In essence people, from an organisational perspective, can be viewed as part-asset, part-resource and part-liability dependent upon their role.


HC Global is PersonnelToday.com's second blog. Dedicated to the world of human capital management, Nicholas Higgins provides daily comment on the world of employment from a human capital perspective

The ISHCM’s Nicholas Higgins, who writes PersonnelToday.com's HC Global blog, says “HCM is about the management of human capital which is a more technical and proactive approach that derives from the organisation performance perspective. It marries traditional HR disciplines with measurement/performance and financial/economic/risk disciplines, among others. ‘Technical’, ‘integration’ and ‘measurement’ are key terms but people are still the core focus.

“In the marketplace, this is manifesting in new concepts like employee engagement, talent management, workforce intelligence, human capital reporting, organisation architecture etc. For some, it may be a particular case of different terminology, for many it’s the change in mindset that is new,” he says.

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