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Professional services | The importance of human capital management

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Professional services | The importance of human capital management

In professional services organisations employees drive the success of the business. Studies show that replacing a key person (defined here as someone whose departure would disrupt work flow, delay projects, etc.) costs between 70% and 200% of the person’s compensation. As people are at the heart of the business it is vital that HR attract, retain and develop the best talent, ensuring their organisation is as productive as possible.

In this blog we will discuss how HR departments are changing and how technology is increasingly playing a part in successful human capital management.

How is the world of HR changing?

Successful HR departments are shifting from reactive problem-solving to proactive, strategic planning; whilst allowing more self-service style employee development to run in the background. The HR function is required to focus less on personnel administration, policy enforcement and servicing and more focus on employee and organisational development. The article, “Why Top Young Managers Are in a Nonstop Job Hunt” states, “Dissatisfaction with some employee-development efforts appears to fuel many early exits.  We asked young managers what their employers do to help them grow in their jobs and what they’d like their employers to do, and found some large gaps.  Workers reported that companies generally satisfy their needs for on-the-job development and that they value these opportunities… But they’re not getting much in the way of formal development, such as training, mentoring and coaching – things they also value highly.”

The millennial workforce, which by 2020 will form 50% of the workforce , expects to be connected at all times, this means new demands are placed on the HR function. There are also different training requirements, this workforce does not want to open a user manual, they want to work with intuitive technologies that match their learning styles and allow them to communicate and collaborate easily with fellow employees.

Technology supporting human capital management

Business management tools such as Microsoft Dynamics ERP provides role-based intuitive tools, KPI’s and personalised dashboards allowing employees easy access to the information they need wherever they are. Human Resource Management in Microsoft Dynamics AX (Dynamics 365 for Operations) provides both individual employee and organisation wide insight, with strategic tools to develop your HR function, features and benefits include:

  • Organisational charts for full, matrix, and project overviews allow professional services organisations to monitor changes in organisational structure, with an overview of current resources
  • Job profiles help HR departments specify the scope of your employees’ positions with standard job descriptions, areas of responsibility, work tasks and accomplishments to assign the correct employee to a specific job
  • Professional service organisations can control the recruitment process from application receipt, ongoing correspondence and interviews, through to employment or rejection. Insight from previous recruitment campaigns can identify the most effective media and methods
  • Users can create a competence framework and a dynamic development process to streamline talent management including personal interviews, training curricula, and events to support each employee
  • The employee database can be used as a central repository to store personal data such as contact information for employees and their dependants, equipment loans, contract, and payroll information
  • HR can retain employment histories, including injuries and illnesses, drug and medical tests, education, skills, certificates, courses taken, absences, work experience and equipment on loan. This allows professional services organisations to monitor employee welfare
  • Employee training can be determined through skill gap analysis whilst assessing current performance levels. Identify competencies, strengths and weaknesses, and outline improvement initiatives to retain staff
  • Training admin is reduced, by specifying target groups, course identification, location, instructor and participants, and the issue of course certificates
  • Employee productivity is improved – users can gain visibility whether employees are on site, on training or in the office with access to calendars

Fixed and variable compensation plans can be easily managed, users can set grade, band and step compensation structures, as well as the ability to adjust pay scales across a group. Pay-for-performance structure can be initiated based on personal and organisational performance goals.

When it comes to the shifting nature of Human Resources function and the challenges of human capital management Microsoft Dynamics AX (Dynamics 365 for Operations) helps transform HR. Microsoft Dynamics supports professional services in two ways – reducing HR admin and empowering all employees – driving retention. With its intuitive nature, Microsoft Dynamics AX can help manage people and processes. Contact Prodware today for more information.

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