You may be wondering, is human capital a resource? What are their key differences? HCM and HRM are two distinct approaches to managing workforces. While both focus on effectively utilizing human resources, they differ in their strategic perspectives and areas of emphasis.
The former takes a more holistic approach by recognizing employees as valuable assets and aligning HR practices with overall business objectives. It goes beyond traditional human resource functions and encompasses talent management, workforce planning, and development. This method places a strong emphasis on identifying the company’s talent needs both in the present and future, considering factors such as skills, competencies, and cultural fit. It takes a strategic outlook to attract, retain, and develop employees, viewing them as critical contributors to long-term success.
On the other hand, HRM is more focused on implementing strategies to meet the talent needs the HR planning process identifies. It primarily concentrates on day-to-day HR functions, such as recruitment, training, performance management, and employee relations. Additionally, this method ensures that the organization has the right people in the right positions by employing effective hiring practices, providing training and development opportunities, and managing employee performance. While strategic management contributes to meeting talent needs, it generally operates within a narrower scope compared to the comprehensive nature of HCM.
