By HR Brew Staff
less than 3 min read
Definition:
Human capital management (HCM) platforms offer an array of solutions for processes along the employee lifecycle, from hiring to offboarding. They may include features such as payroll, performance management, and learning, among many others.
Why have an HCM?
HCM platforms largely replaced the infamous personnel file and, with it, HR’s filing cabinet. They help HR teams manage their organization’s people data, records, organization structure, and more, and they come equipped with other HR-related management systems that support work in recruiting, onboarding, pay, learning and development, and retention. HCMs’ utility lies in their ability to bring core HR functions like recordkeeping, benefits administration and onboarding into one platform. These platforms also help drive people analytics with workforce tools and reports. HCM platforms help HR teams not only execute HR company policy and employee programs, but are valuable talent strategy tools.
Too many HR and workflow platforms can contribute to a “toggle tax.” That said, HCMs sometimes face criticism for their clunky interfaces, and sometimes, being a Jack-of-all-trades can actually mean being a master-of-none. Many major HCM platforms address these concerns with smooth integrations featuring purpose-built tools (that may, conversely, boast major HCM integration partnerships). But sometimes these integrations have accompanying headaches, and orchestrating an integration takes time, effort, and Red Bull.
Interestingly, the term “HCM” can also be used as a technology category, as other platforms that help manage people—payroll, ATS, etc.—can sometimes be considered HCMs. It can also refer to a broad set of technology solutions, business strategies, and best practices that involve the management and leveraging an organization’s human capital, so context matters.
What’s the difference between an HCM and HRIS?
“HCM” often can refer to the same set of platforms sometimes called “HRIS.” In many ways, HCMs are simply the evolutionary descendent of the basic HRIS—reflecting HR’s more strategic people expertise and broadening portfolio beyond the traditional transactional HR tasks. If you’re in a meeting and you’re thinking “HCM,” but your colleague says “HRIS,” chances are good you’re still on the same page.
Can you put HCM into context?
“Then there are HR tech systems, such as Workday’s new AI agent system of record, which recognize this shift and are building governance tools inside their HCMs,” HR Brew previously reported.
