The acronym HCM stands for Human Capital Management.
The term HCM can refer both to a business strategy and a set of modern IT applications and other technologies that are used to implement that strategy. Though sometimes used interchangeably, the terms related HR, HRMS, and HRIS do have subtle distinctions:
The explosive growth in ecommerce makes it an increasingly valuable, and even essential, tool that enables businesses to:
HR: Refers to a set of traditional employee management functions that includes hiring, job and position management, global HR compliance, and reporting.
HCM: Encompasses the same processes, but also includes workforce rewards and talent and workforce management.
Talent management: Looks at the strategic management of talent throughout the talent lifecycle. It includes sourcing and recruiting candidates, goal and performance management, learning and career development, talent review, and succession management.
Workforce rewards: Refers to all HR functions that manage any monetary or nonmonetary rewards including compensation, benefits, or payroll.
Workforce management: Involves all HR functions that are related to positive and negative time management including time and labor and absence management.
HRMS: Refers to the set of applications and other technologies that support and automate HR processes throughout the employee lifecycle. While the terms HCM and HRMS are often used synonymously, HCM puts particular emphasis on the strategic approach to managing employees.
HRIS: Originally referred to keeping administrative employee records. It has been largely replaced by the term HRMS. In practice, HRMS and HRIS are virtually interchangeable terms.
What Is Human Capital Management?
Human Capital Management (HCM) transforms the traditional administrative functions of human resources (HR) departments—recruiting, training, payroll, compensation, and performance management—into opportunities to drive engagement, productivity, and business value. HCM considers the workforce as more than just a cost of doing business; it is a core business asset whose value can be maximized through strategic investment and management—just like any other asset.