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Human capital management: more than HR with a new name.

Article Excerpt
Businesses are racing to gain and sustain advantage in today's globally competitive business environment. Digital age technology is rapidly shifting where and how business is done. The pressure for profitability, to decrease the cost of production and increase revenues, fuels the need to leverage all of the sources of capital a company can access--including human capital.

HR's response has been to become HR strategic business partners. This is a great and necessary step, but the stakes are high and we need to shift gears faster--and think bigger! Either we move up the business value chain, or we slide down it driven by the twin and intertwined forces of technology and outsourcing that are already reshaping HR.

The term human capital management (HCM) is entering our lexicon of change. Most use the term interchangeably with HR, but HCM can and should be more than HR with a new name. HCM is a C-suite business discipline that develops enterprise human capital strategies and ensures the human capital portfolio is effectively managed. Just as the chief financial officer (CFO) is a full senior partner in identifying and solving business issues from a financial perspective, the chief human capital officer (CHCO) is a full senior partner in identifying and solving business issues from a human capital perspective. As C-suite members, the CFO and CHCO are accountable for overall enterprise performance. Both also have responsibilities for enabling business operations and the performance of their organizations.

HCM provides decision support by combining business and workforce intelligence to the development of enterprise human capital strategies: how to leverage people and their ideas effectively to achieve bottom-line business goals such as growing the business, increasing market share, margins, share price, and decreasing SG&A costs, as well as improving business processes, benefiting from technology investments, and increasing productivity.

The future of HR and the...

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