Human Capital Management (HCM) Process Optimization: A Guide

Human capital management (HCM) process optimization is the ongoing process of improving HCM process efficiency, productivity, and outcomes.

As with any business process improvement methodology, HCM process optimization requires an approach that is systematic, data-driven, goal-driven, and continuous.

Below, we’ll learn how to develop an HCM optimization approach that generates measurable, ongoing results.

Human Capital Management (HCM) Process Optimization: A Guide

Let’s look at some of the core elements of developing an HCM optimization process.

Setting the right goals

An HCM optimization process should focus on certain goals.

First and foremost, it is important to understand the purpose and goals of an HCM platform.

To start, understand what the benefits of the HCM platform are and how your organization defines the ROI of that platform.

Typically, all the goals in an organization can be contained within a hierarchy that begins with the organization’s goals. An organization that wants to improve HR agility and cut costs, for instance, may adopt an HCM platform – and in this case, these goals would be the top priorities to measure.

Here is an example of top-level goals that can drive an HCM adoption effort:

• Increased workforce agility
• Boosted organizational agility
• Reduced HR costs
• An improved digital employee experience
• Shortened recruitment and hiring timelines

These examples demonstrate how an HCM platform can generate positive results for the organization itself and how an HCM optimization process should be viewed and measured.

Creating a data-driven optimization process

There are several points to note when developing an optimization process.

• Like any optimization process, an HCM optimization process should be embedded as a permanent part of HCM management
• The goals used above should be used to define KPIs and metrics
• To successfully implement an optimization process, it is necessary to have the right data collection mechanisms in place

Here is an example of what this can look like in the real world:

• HR managers would plan, document, and implement a regular review of HCM processes, key metrics, costs, and performance
• The overarching goals of the HCM platform, such as reduced HR costs and improved recruitment, would be translated into KPIs and metrics, which would then form the basis of the HCM optimization process
• Data collection mechanisms, such as software analytics and employee surveys, would be used to gather and compile data

Next, let’s look at a few useful tools for implementing these steps.

Mapping out business processes

Business process management is one of the most relevant disciplines when discussing any form of business process optimization, including HCM process optimization.

This discipline is dedicated to performing tasks such as:

• Measuring and analyzing business processes
• Identifying and solving inefficiencies and problems
• Optimizing and redesigning business processes

Process mapping is one of the most useful tools from the business process management discipline. 

Process maps use well-known graphical elements, such as flowcharts, to diagram, analyze, and offer insight into business processes. The information gained from these process maps can help a variety of stakeholders understand and participate in the optimization process.

For more on this topic, see our articles on business process mapping (BPM) and business process standardization (BPS).

Use process mining

Process mining refers to the collection of back-end data, often from software logs, to understand how business processes are being carried out. Task mining, likewise, refers to the collection of frontend data, such as software interactions, to analyze and understand how employees are performing job tasks.

As we’ll see below, both are necessary to understanding exactly how HCM platforms are actually being used.

The reason is that, in many cases, processes may be designed one way, but performed another.

Process and task mining offer a window into how processes are actually being performed, which may or may not correspond to the actual process design.

This accomplishes several things:

• Managers can use process mining data to inform training efforts
• Process mining data presents insights into problem areas, inefficiencies, and challenges
• Mined processes can offer ideas and solutions to business process designers

In short, process mining is the process of not only collecting data, but of analyzing and applying that data to deliver alternatives.

Choosing the right tools

The right data collection mechanisms are critical to ensuring the success of your optimization process. Surveys of managers and employees can help, but in today’s digital work environment, it is important to use more modern tools.

Digital adoption platforms (DAPs) are ideal solutions for business process optimization, including HCM process optimization.

These platforms are designed to help businesses achieve several objectives, including:

• Software onboarding
• Employee training
• Workflow automation
• Process mining
• Task mining
• Business process optimization

Among other things, these tools include features designed to map workflows and processes in detail. WalkMe’s software analytics, for instance, can help managers understand exactly how an HCM platform – or any software platform, for that matter – is being used by employees.

Those insights, which are derived directly from employees’ software interactions, can be used to map out, optimize, and redesign any HCM-related workflows.

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