HCM as a Systematic Business Process

This article is the fifth and final in a series of articles that covers how human capital management has changed dramatically during the last several years. Each article has highlighted one of five new principles that have characterized the recent transformation of Human Capital Management. The new principles of Human Capital Management already described are: a skilled workforce is a cash multiplier, the ubiquity of skills demand; the automated matching of supply and demand; and the recruiting supply chain. Each principle builds on the next. In this article, we examine the final principle: human capital management as a systematic process. Systematic Business Process Human capital management is a business process in which quality should be a central concern. International standards for management systems, such as the ISO 9000, focus on consistency and repeatability as a means to deliver quality. The same approach may be applied to human capital management. Consistency in the staffing process means that two recruiters will come to the same decision in identical circumstances. Attaining consistency requires that decisions be made on the basis of a systematic and analytical framework. A consistent, enterprise-wide set of criteria for defining success at a job – relied upon to inform the acquisition and deployment of human capital – will result in an increase in the quality of the workforce. Quality has to be achieved not as an accident, but as a matter of design. Putting It All Together The birth of an infosphere called the Internet (explained in an earlier ERE article series) has allowed the second principle, the ubiquity of demand, to become reality. An understanding of the ubiquity of demand makes corporations more aware of the true level of competition. The ubiquity of demand forces employers to become a brand, and to articulate a true value proposition to future employees. The technology within state-of-the-art staffing management systems enables the third and fourth principle, the automated matching of supply and demand and the recruiting supply chain. Automated matching of talent supply and demand provides a fast and high-quality fulfillment of corporate needs, while automation of the recruiting supply chain creates further efficiencies. However, it is only the leaders of organizations that can make human capital management a systematic process. It is the increasing amount of evidence of the first principle – a skilled workforce is a cash multiplier – that is pushing them to act now. The Role of HR Leadership We can now understand how much the job of a VP of HR has changed lately and how much technology has enabled new processes and new thinking. Corporate leaders must think about human resources as a true process, equally capable of being systematized as any other business process. If all business is a combination of science and art, HR has been the area in which the proportion of art has been higher than in other disciplines. New technologies and practices can introduce a more systematic and efficient approach to human capital management. The financial importance of human capital makes the pressure greater than ever to develop human capital management technologies and practices that acquire and optimally deploy top performers. From a clear connection of the financial impact of human capital management to the principle of supply chain management applied to recruiting, we have been through a true evolution. The role of a leader is to inspire the change, and engage a new systematic process by introducing best of breed technologies powered by validated content and process steps. Today, human capital management practices can be a true business differentiator for any successful business. These five principles should form a new framework for understanding how human capital management is changing. The true challenge now is putting it all together as a best of breed human capital management practice. With this focus, I invite you to send me your challenges so we can discuss them in future articles.