In recent decades, people management has changed, and with it, so have technological tools. Previously, Human Resources software mainly handled administrative aspects related to HR, but the emphasis on Human Capital in organizations has led to a more strategic and integrated approach – which is embodied in HCM software.
In the post-Covid era, people management has become increasingly demanding and complex. With employees taking a central role in the life of companies, it is essential to adopt tools that respond to this new dynamic – and this is where HCM software comes in.
What is HCM Software?
Human Capital Management (HCM) refers to a set of techniques for recruiting, managing, and developing talent within organizations. In turn, HCM software is the application that supports all this management, where tasks are carried out and goals are monitored. Since it deals with all processes related to people management, some refer to HCM software as Human Resources software; this happens because HCM software encompasses all the functionalities of HR software but goes further. Besides typical features, ranging from recruitment, training, payroll, absence management, vacations, and others, HCM solutions have a more strategic approach, focused on the overall development of Human Capital and its alignment with business objectives. An analysis of the main features allows us to better understand the differences between HR software and HCM software:
|
Features |
|
| Human Resources Software | HCM Software |
| Payroll management | Talent management |
| Attendance and time management | HR planning |
| Recruitment and selection | Culture and Employee Engagement |
| Benefits management | Predictive analytics and reporting |
| Training | Career plan management |
| Compliance with current regulations | Integration of operations and legislation in multiple locations |
It is important to note that HCM software performs all the tasks mentioned in the HR software column. The difference lies mainly in the integration of functionalities that allow for more holistic management, greatly enhanced by advances in AI and data analysis, as we will see next.
Main Areas and Features of HCM Software
HR and Payroll Management
Like HR software, an HCM solution supports the most routine tasks of people management – from employee data to payroll, benefits management, vacations, and absences, among others. Currently, HCM software in the cloud simplifies all these processes and provides self-service employee portals (which employees can access, register data, and submit requests). All this with real-time updated information and access control, ensuring data privacy.
Talent Management
Within the area of talent management, recruitment and onboarding of new employees, training, performance management and evaluations, career planning, among others, stand out. Using automation, HCM tools accelerate various aspects, including candidate search through internal and external job postings, simplifying the hiring and onboarding process. It is also possible to set goals per employee, centralize information about training, and continuous feedback tools allow for easier evaluation, promotion, and compensation of high-performing employees.
Employee Experience Management
Also known as Employee Experience, this area aims to assess the level of satisfaction of employees regarding their experiences in the workplace, from the moment they join until they leave the company. It includes tools such as performance evaluation and 360 feedback, surveys, behavioral and sentiment analysis, which, enhanced by AI, help personalize the employee experience, increasing their engagement and productivity.
People Analytics and HR Planning
Increasingly sought after by larger companies, the area of People Analytics refers to data analysis processes related to employee behavior to predict scenarios, plan actions, and avoid risk situations. Based on the software’s data history, it is possible to establish metrics and KPIs, create advanced reports and predictive models that support strategic and operational planning, strengthening the company in the face of constant changes in the HR market.
Advantages of HCM Software
By integrating a set of distinct HR processes, HCM solutions centralize all people management and lead to more informed and faster decision-making. All this while promoting more satisfying employee experiences, automating workflows, and increasing efficiency. Let’s look at the main advantages of HCM software:
Attraction and Retention of Talent
- Faster and higher quality hiring;
- Greater team engagement and motivation thanks to a focus on a good employee experience;
- Greater retention of talent and development of individual skills;
- Easier identification of profiles with career progression potential.
Greater Adaptability to Change
- Alignment of Human Capital strategy with business strategy;
- Ability to anticipate workforce fatigue;
- Faster team adjustments to organizational changes;
- Greater ability to adapt HR processes to meet specific needs.
Optimized HR Processes
- Information centralized on a single platform, with access by permissions;
- Data analysis tools that speed up decision-making;
- Global and local process automation;
- More autonomy for employees in using the platform, streamlining and speeding up processes.
ERP Integration with HCM Software
Many companies that choose to implement HCM software already use other management solutions. ERP is one of the most widely implemented types of software in national companies, as it allows for the management of a set of essential business operations – from invoicing and accounting to purchasing, logistics, and stocks, among others. In fact, one of the advantages of ERP (or management software) is the centralization of information from various areas of the company, enhanced by data cross-referencing that helps manage all processes more efficiently and productively. However, when a new software “comes into play”, this ability to centralize information can be compromised. The solution lies in software integration, which synchronizes different systems and applications to further leverage their data and functionalities. In the case of HCM software integrated with ERP, it is possible to access all information on a single platform, cross-referencing data related to the company’s Human Capital management with business objectives and results (ERP). Imagine cross-referencing data related to sales and supply chain with information on seasonal hiring to optimize recruitment processes. Or improving employee performance analysis thanks to sales records and lead acquisition – data from an ERP. So, if you are looking for HCM software, you should consider whether the solution can be integrated with ERP or other types of software.
The Partnership between PONTUAL and Factorial
Specializing in HCM software, Factorial is currently one of the leading global providers in the Human Resources field. Since the beginning of 2024, PONTUAL and Factorial have joined forces in a partnership where PONTUAL acts as an implementation, resale, and customization partner for Factorial software. PONTUAL also acts as a software and systems integration partner, having developed solutions that allow synchronizing Factorial software with various ERPs, elevating business and HR management to a new level. See the testimony of Sofia Canas, HR Consultant at Factorial, about this partnership:
Looking for a solution that not only allows you to manage more efficiently but also maximize your company’s most valuable capital? Contact us and schedule a free demonstration without obligation to learn more about all the features and advantages of the software that will transform your company’s Human Capital management – Factorial!
