What is Human Capital Management?

Human Capital Management (HCM) is a set of practices and standards employed by an organization to guide and manage its employees to increase their value and output towards the organization.

The reasons for the widespread prevailing practices of Human Capital Management globally are that an organization’s workforce is its greatest resource and therefore, investing in the workforce automatically multiplies an organization’s output.

The objective of an effective Human Capital Management initiative is:


  • To hire the right and proper talent
  • To ensure that all essential and required skillsets are available within the organization
  • To ensure effective management of the workforce
  • To increase and ensure high productivity

HCM includes the various practices and norms which are related to the management, development and operations of the various aspects of an organization’s workforce. HCM initiatives are aimed at maximizing the economic values of the human capital leading to a competitive advantage for the organization. Having an effective human capital management initiative ensures that the organization is capable of successfully pursuing workforce initiatives.

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