Why HR should replace HCM with ‘talent expansion’

Talent management

SumTotal System’s David Borkin explains why it’s time for HR to move away from human capital management and start focusing on talent expansion.

In the past, HCM as a strategy has provided a way of creating business value out of an organisation’s employees. But, as technology has developed, HCM has not. HCM records what has already happened, and as such is always looking backwards. The data collected on people is often not used to predict or plan for the future, help develop staff or increase effectiveness of workers. Increasingly, businesses are waking up to the fact that if they are able to capture and analyse the right sort of data, they can use their workforce in a more productive way.

There are major changes currently facing HR, including: an increasingly older workforce that will be in employment for longer; the "millennial" generation joining the job market; and ageing IT systems that are no longer fit for purpose. Old systems such as HCM simply are not capable of meeting these challenges.

The industry will move on from HCM to a system where employees are empowered in their roles, where what workers are doing is more visible to managers and where HR supports the needs of the wider business. Employers need their employees’ work to align with their company’s strategy and support business growth. "Talent expansion" is a new way of working that supports this.

As the working environment has changed, the way HR teams manage workers must also change. Talent expansion places employees at the core of a business. It helps boost employee satisfaction and company productivity by providing real-time information on an employee’s activity and progression.

Rise of the mobile employee

With businesses expanding across the globe, changing technology and the rise of remote working, static desk-based jobs have become less common. HR departments must be able to deliver real-time access to business-critical documents regardless of where people are working.

This benefits employees such as: shift workers, who need to complete training but who have unconventional work patterns; remote workers, who require access to the same information and training that on-site employees have; and temporary staff, who need to be trained quickly and have different requirements from permanent staff in terms of wages and contracts.

As employees change the way they work, a traditional HCM system is no longer effective and HR managers need a system that will support the different working environments of their employees.

Communication is key

Many organisations have one system for learning, one for talent management and another for workforce planning or scheduling. This is a time-consuming and cumbersome way of handling employee data, and does not always guarantee accuracy. It also does not reflect the reality of business processes that cross these siloed systems.

The ideal is for these systems to communicate with one another, allowing managers to merge, blend and modify information. There needs to be one record of each employee that integrates information on their history, past training, present location, skills and working schedule, as well as their future needs, in an easy-to-view system. Unfortunately, this is rarely the case with HCM, and the disparate systems do not communicate with each other.

By creating one record of employee information, HR leaders will have everything they need to manage day-to-day operations as well as to support the strategic direction and growth of an organisation. For example, learning needs will be flagged before they become time critical, training will take place quickly in any location on any device and team leaders will be updated as soon as courses have been completed. This type of system also allows employees to flag their own training and development needs, enabling two-way communication.

Workplace of the future

Talent expansion ensures long-term engagement, making individual recommendations for employees based on their history and aligning them with their employer’s strategy. HR can encourage an employee’s personal growth, give greater visibility to important employee data and communicate across all platforms. Ultimately, this will create a more aligned HR department.

The HR profession needs to move away from the term HCM. Describing the workforce as capital does not boost productivity any more than calling them a resource does. It will not get the desired results, and it is not motivating.

Attracting, engaging and retaining top talent is crucial in today’s economic landscape. As the UK emerges from recession and businesses fight to keep their most talented employees, staff need to be nurtured and their development monitored and encouraged. By expanding the way talent is discussed and recorded, HR teams will gain increased visibility of all employee data, gaining business value out of it and in turn boosting company productivity.

As more and more HR leaders come to recognise that a manual approach to talent management is outdated and inefficient, they will begin to see the real value in integrated talent management. Can you really afford to still say you manage human capital?


About David Borkin

David Borkin is solutions architect at SumTotal Systems. 
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