7 Ways To Improve Your Small Business’ Human Capital Management

If you own or manage a small business, you know you need to take advantage of every available opportunity to level the playing field with your competition – which is often bigger, more well known, and has deeper pockets. One key way to do this is to streamline the way your business handles its “human capital” so as to boost hiring, employee retention, and productivity.

Human capital management concerns itself with the process of attracting, onboarding, training, retaining, and managing good employees who will make and keep your small business strong.

After all, a loyal, highly skilled workforce will help your company grow and prosper like nothing else will. Here are seven key areas where good or bad human capital management can make or break your small business.

1. Capturing Top-tier Talent Into Your Workforce
Gone are the days when you could just sit back and wait for skilled workers to find you. Today, industry competition is simply too intense. You have to proactively advertise for top-of-industry employees and use every legitimate means to attract them to your job offering instead of that of your competition.

Professional help with your human capital management means, among other things, developing a competitive program for getting the attention of the workers you want and encouraging them to pursue an interview. It also means a well planned out interviewing and onboarding procedure that balances selectivity with keeping good candidates positive about the process.

2. Reducing Employee Turnover Rates
We live in a highly mobile society, and it’s rare for people to work the same job for all or most of their adult life. That said, the business that can be the exception to the trend of high employee turnover stands to gain a great advantage.

Human capital management software, combined with employee feedback venues, can help you track employee satisfaction. It can help you identify simmering problems that might eventually lead to employee loss so you can correct them and retain your valuable talent for many years to come.

3. Good Benefits Management
Employee benefits and “perks” are just as important as the basic salary for many of today’s employees.

Therefore, you need an organized approach to finding out which benefits are most important to your workers and which ones are most practical and cost-effective. Human capital management software and strategies can plug in this gap too to help maintain a happy, long-term, and productive staff.

4. Better Use of Employee Metrics
Having not just data, but useful data and plenty of it – all at your fingertips, is one key to identifying and reacting to trends. The kinds of metrics provided by HCM software also allow you to make projections and undertake proactive changes in a responsible, effective manner.

A great software program will do the work of many HR workers. That means you can avoid doubling the size of the human resources department by choosing the right human resources management partner.

5. Keeping Tabs On Productivity
Ultimately, it doesn’t matter how talented or wonderful your staff looks on paper. Productivity is what is going to count. That includes the efficient production of goods and services and implies that we are talking about high-quality production.

HCM software can allow you to track time and attendance matters, production, and payroll management. It can give you an added tool to compare what you are getting out of your employees with what you are paying for them.

That may sound “brutal,” but it’s not. You are free to interpret the data and put it into the greater context of what you know about your workers. But the point is you want to “know the numbers.” You need to have that kind of data in your toolbox, so to speak.

6. Human Capital Management Aids Training
Employee training and advancement is another key area of running a business that falls within the compass of human capital management. Good HCM practices let you create potential career pathways for employees so they can visually see that they are not “stuck in a dead-end job.”

Step by step training programs that lead all the way from initial orientation to possible upper management positions in the future give your employees hope – and without that, they may not choose to stay with your company for the long haul.

7. Successful Navigation of Business Crises
Finally, in the midst of this Coronavirus pandemic, we should mention that good human capital management is crucial in navigating your way through business crises of all kinds.

Health department rules and other restrictions may greatly complicate logistics and challenge even the most experienced HR staff members. Having top-of-market human resources management tools at your disposal may make the difference between floundering in a crisis versus holding your own and even progressing in spite of it.

To learn more about human capital management and available tools and strategies to improve the way your business handles its human resources, contact the experts at Flagler Financial today for a free initial consultation!