As the company grows, new workforce or employees are hired. To make the business successful it is important to know how to manage human capital. Employees are generally termed as the lifeline of an organization, and no organization will be able to survive if there are no employees.

Human capital has a major impact on the organization’s productivity and output.

What is Human Capital Management (HCM)?

Human Capital Management system describes the process of managing employees working in an organization that will result in significant productivity. In simple terms, managing the workforce in an organization is termed as human capital management.

The process includes budget planning, training employees, managing and retaining them, and performance management etc. Training the employees is important, upgrading the existing skills of an employee and making the best benefit of it refers to human capital management. This has more to do with how organizations treat their fellow subordinates. The organization needs to ensure that every individual gets trained timely, this becomes an important resource for both the individual and for the organization. In human capital management, the employees are treated as important resources that later plays an important role in the organization.

What is Human Resources Management (HRM)?

 Human Resources Management system plays a vital role in an organization, in short, it is a process where people and the organization are brought together to meet certain goals. The human resources management helps improve the employees, who are considered as valuable assets to an organization. The role of the HRM includes career planning, compensation, benefits, record keeping, staffing, employee development, and maintenance etc.

The challenge of every HR manager today is to find the right talent, nurture them to achieve significant productivity gain over a period.

 The differences between Human Capital Management and Human Resources Management

 Both these terms are responsible for certain functions related to individuals working in a group. Employees working for organizations are considered as valuable assets to the organization, hence these two terms should be framed by the HR department. To be more specific, HCM is a software program that provides a response with elements such as HRM, organization management and, personal management etc.


  • This is related to issues like employment, utilization, development and employees’ issues.
  • Evaluation techniques are used which are complicated.
  • Executes the interaction of human capital management.
  • Can be driven under the special case of organization performance.
  • Minor instances delivery.


  • Whereas the HRM functions based on the law and company directives.
  • Simple techniques used.
  • Exposes only the integration of HRM.
  • Driven by HR.
  • Major solution delivery.

These are the different functions between both human capital management and human resources management. However, if an organization is looking to maximize the human capital growth it is important that the right HCM strategy is implemented. This is the key to an organization’s success.

Around 85% of organizations have stated that having an integrated HCM system has led to ease the access of employee data and have had 75% accuracy of the data.


Please enter your comment!
Please enter your name here