What is human capital management?
Human Capital Management (HCM) is a term for the methods and processes that HR uses to recruit, manage and
develop the employees in an organisation. The concept stems from the idea that employees are the most important
resource the organization has, and that the valuable expertise and experience they possess is crucial for the
organization to achieve its business goals.
The terms Human Capital Management and Human Resource Management (HRM) are often used to describe the same
processes, but originally there were some differences. HCM was a broader term and encompassed more than
just core functions – it could include employee surveys and analytical methods, among other things – whereas HRM was limited to basic HR tasks such as onboarding and offboarding. Today, however, these terms are intertwined more and more and are used interchangeably.
Human Capital Management, if used correctly, can contribute to creating a strong organizational culture
that promotes employee development and well-being. By focusing on the development of the company's own talents
and competences, the individual employee gains greater control over his own career. Which, in most cases, will
positively affect the employees' motivation and belonging to the company, and not least contribute to the
overall results in the organization.