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Human capital management (HCM)

What is human capital management (HCM)?

Main HR glossary Human capital management (HCM)

Human capital management (HCM) is an approach to workforce management that views employees as a company’s most valuable asset. It focuses on attracting, developing, motivating, and retaining top talent while maximizing their potential to achieve strategic business goals.

Key aspects of HCM:

  • Talent acquisition: building an effective hiring process to attract highly skilled professionals who align with company needs.
  • Training and development: providing programs for skill enhancement and adapting employees to new challenges.
  • Performance evaluation: regularly assessing employee performance to identify strengths and areas for improvement.
  • Motivation and rewards: designing incentive systems that recognize achievements and ensure fair compensation.
  • Career development: helping employees build career paths and offering opportunities for internal growth.

Companies that effectively manage human capital gain a competitive advantage. They not only attract and retain top talent but also foster a work environment that drives productivity, innovation, and long-term business growth.

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