What is Human Capital Management (HCM)?

What is Human Capital Management (HCM)?-feature image
February 2, 2023 Reviewed By : Megha Sharma .4 Min read

Human capital management encompasses effective employee management to maximise their performance. In the era of technology, IT plays a key role in improving HR functions in an organization. A lot of organizations have already implemented HR management software, moving their data from physical records to HRMS powered spreadsheets.

An HRMS will provide the best value to your organization and empower you with the flexibility to deal with ever-changing business needs. To get the most out of a Human capital Management Software, we have listed down eight must-have functions that an employee management software should be able to perform.

Functions of HCM Software

Centralised Employee Data and Records

Any HRMS should be capable of maintaining a repository of employee data and company records. This data should be accessible to HR from a centralised platform, for convenience. This feature lets HR retrieve data of employees at a moment’s glance. Additionally, you can manage documents related to employees like offer letters, appointment letters, ID, Aadhar information, PAN card details, and more.

The best HRMS solution that can help you centralise your records and make them more accessible is Pocket HRMS. Its intuitive interface ensures that you can access your records easily and don’t spend too much time finding relevant documents. Pocket HRMS not only performs core HR functions but also performs biometric attendance management, MIS reporting, expense management, and more.


Having good employees can take your company to great heights. As a result, your recruitment operations need to be managed effectively, for best results. A sound HR solution will offer various features to help your HR department manage every step of the recruitment process with ease.

Employee management software will help in organizing recruitment activities effectively. This includes resume management, categorisation, processing applications, consolidating and communicating interview results and many other activities performed during the recruitment process.


A Human capital Management Software should help you with accurate calculation & distribution of payroll by considering attendance, leaves, holidays, overtime, deductions, reimbursements, taxes etc. An HR system will help in recording employee attendance and generating payroll as per the data obtained. It can create payroll reports and export data to Microsoft Excel as well as PDF for your convenience.

Appraisals and Performance Management

HCM software helps organizations in tracking and reporting employees’ performance. With an HRMS, performance review takes place on a recurring basis. HRMS contains modules that help in improving employee performance and engagement.

You will be able to look at employees’ past year’s performance, using an HRMS. Additionally, HRMS can be used to assess if employees met their deadlines and completed their KRAs.

Suggested Read: 7 Steps of Human Resource Planning

Training & Learning

A robust HRMS helps in organising employee training & learning sessions. Additionally, it also maintains records of the training provided and seminars conducted. HRMS’s training management module can be used to schedule venues, communicate training-related information to employees and share relevant resources and study material. HCM software also allows outlining training courses and materials available to develop skills.

Attendance Management and Human Capital Management Software

HRMS helps in maintaining the attendance of the employees, including managing leaves: paid, unpaid, and holiday granted. In many organizations, there are biometric systems that register attendance with a card swipe or a fingerprint reader. An HR system will integrate with any biometric device and have the ability to read various input formats. This reduces errors while eliminating manual interventions, ensuring proper recording of employees’ attendance.

Reporting and Analytics

An HRMS should have the facility to display various types of reports and export them to excel sheets and PDFs. It should graphically represent various reports including attendance, payroll, appraisals, leaves, turnover, etc. This allows you to get employee information in the blink of an eye. Good analytics will ensure informed decision-making that benefits the organization and its employees.

Employee Self-Service

Employee self-service gives on-demand access to employees for accessing their personal information from anywhere. An HCM software that includes self-service will allow employees to manage their own records including attendance, applying for leaves, viewing organization information, etc. Supervisors can approve leaves and allocate work through the self-service portal. HRMS thus reduces the work of the HR department and saves them time.


Now that you know the features that an employee management software should have, how about checking out some fantastic Human Capital Management Software solutions like Pocket HRMS?

Written by Kalpana Arya

Kalpana’s tech writing journey began in 2017 with Techjockey, and she truly belongs here! If she was not a technical content writer, she would have been a coder. Technical writing, especially for business software, is her passion, and she enjoys every bit of it. From addressing the pain... Read more

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