The right human capital management (HCM) solution can help your business get the most out of its employees. It’s more than just payroll and benefits: it’s a set of tools that helps you manage the full employee lifecycle, including recruitment, performance coaching, training, and more. However, selecting the right HCM solution for your organization isn’t easy.
There are many different types of HCM software available on the market today — and each one has strengths and weaknesses. But, most importantly, not all of them will be the right fit for your specific business needs.
Here are some practical tips to help you choose the right human capital management solution for your organization.
1. Start with a clear definition of your goals
Before you begin your search, you should define what you want to accomplish with the HCM software. It’s important to understand that not all goals are created equal and that it’s possible to be too ambitious with some of them.
With this in mind, here are some guidelines for setting appropriate goals:
- Be specific: Vague goals are difficult to measure and, as a result, difficult to achieve. Therefore, when setting goals, be as specific as possible. For instance, rather than saying you want to “improve employee productivity,” set a goal of “increasing employee productivity by 10% within six months.”
- Be realistic: Don’t set goals that are impossible to achieve. For example, if your company has never done performance reviews before, it’s probably not realistic to set a goal of conducting quarterly performance reviews for all employees within the next month.
- Be achievable: In addition to being realistic, your goals should also be achievable. That is, they should be something that your team can actually accomplish with the resources you have available.
Once you’ve set your goals, you can begin evaluating different HCM solutions to see which ones are right for your organization.
2. Consider your company’s size and structure
The next step is to consider your company’s size and organizational structure. These factors will help you determine which features and functionality are most important to your business — and which ones you can live without.
For instance, if you have a large workforce, you’ll need an HCM solution that can handle a lot of data.
On the other hand, if your company is small and relatively flat in terms of hierarchy, you might not need all the bells and whistles that come with more complex HCM software.
Here are some general guidelines to keep in mind:
- Small companies (<50 employees): For small businesses, the most important thing is to find an HCM solution that’s easy to use and doesn’t require a lot of training. Additionally, you’ll want to make sure the software integrates well with any existing business applications you’re using.
- Medium-sized companies (50-1,000 employees): Medium-sized businesses have a few more options when it comes to HCM software. In addition to the factors listed above, you’ll also want to consider solutions that offer advanced features such as talent management and succession planning.
- Large companies (>1,000 employees): If you have a large workforce, you’ll need an HCM solution that can handle a lot of data. Additionally, you’ll want to look for a solution that offers powerful tools for managing employee performance and development.
3. Define your budget
While more expensive HCM solutions do offer more features, it doesn’t necessarily mean you need those features. In fact, many small and medium-sized businesses find that they’re perfectly happy with a less expensive solution.
Some of the best HCM solutions also offer tiered pricing, which means you only pay for the features you need. This can be a great way to get started with HR software without breaking the bank. It also means you can scale up your investment as your business grows.
To help you define your budget, sit down with your team and discuss the following questions:
- How much can you afford to spend on HR software?
- What features and functionality are most important to your business?
- How long do you plan on using the software?
Once you’ve answered these questions, you’ll have a better idea of how much you’re willing to spend on human resources and human capital management software. From there, you can start evaluating different solutions to see which ones fit within your budget.
4. Look for some essential features while HCM shopping
While every business is different, there are some essential features that every human capital management solution should offer. Below are five of the most important ones to look for that will help you streamline HR processes:
- Employee Self-Service: Employee self-service is a must-have for any HCM solution. This feature allows employees to view and update their own information — including contact details, job titles, and compensation — without having to go through HR.
- Performance Management: Performance management tools are essential for helping you manage employee performance and development. Look for a solution that offers goal setting, feedback tracking, and 360-degree reviews.
- Talent Management: Talent management features help you identify, attract, and retain the best talent. Narrow down your options based on tools for recruiting, performance management, and succession planning.
- Compensation Management: Compensation management tools help you manage employee salaries and bonuses — shortlist HCM solutions with salary benchmarking, salary history tracking, and compensation planning.
- Benefits Administration: Benefits administration tools help you manage employee benefits. Features like online enrollment, benefits tracking, and eligibility verification are great for streamlining the benefits process.
Final Thoughts
We understand that choosing an HCM system is both important to your business and incredibly challenging. This is why business and technology services providers like Argano partner with companies to build digital foundations that help their businesses run better.
Their first step is always diving deep to understand your specific business needs. From there, you can work towards identifying a solution that’s tailored to your budget and requirements.
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