ROLE OF TECHNOLOGY IN HCM
Technology and data analytics significantly change Human Capital Management (HCM) by
simplifying procedures, improving decision-making, and optimizing workforce management.
Organizations today use modern technologies like artificial intelligence (AI)-based software,
HR analytics, and performance management platforms to handle complex issues and
capitalize on possibilities in human resource management (Yadav et al., 2023). These
advancements enable firms to thoroughly analyse employee data, identify trends, and make
educated decisions, all of which lead to a more dynamic and efficient workforce.
HR analytics have become an essential component of modern HCM initiatives. Predictive
analytics may help companies anticipate possible turnover concerns, enhance retention
rates, and find high-potential individuals. Such solutions enable proactive decision-making
by providing real-time information regarding staff performance and engagement, allowing HR
managers to design interventions based on unique requirements. For example, AI-powered
systems may automate performance evaluations and give actionable feedback, decreasing
bias and increasing overall openness in decision-making (Yadav et al., 2023).
AI has also transformed the adoption of human capital management systems, particularly in
areas such as finance and technology, where efficiency and security are critical. AI-enabled
technologies have helped banks automate operations like recruiting, onboarding, and
performance tracking. These solutions ensure efficient processes while giving employees
hyper-personalized experiences, resulting in increased satisfaction and retention rates
(Yadav et al., 2023). Furthermore, AI-powered technologies assist firms in managing
sensitive employee data with strong security measures, promoting trust and confidence
among their workforce.
In industries where innovation drives competitiveness, technology plays an important role in
developing human capital. Collaborative digital platforms provide seamless information
exchange, promote innovation, and facilitate strategic alliances. Banerjee's proposed
lifecycle model for sustainable human capital includes digital tools at various phases of
employee involvement, including mentorship, training, and succession planning (Banerjee,
2013). This approach emphasizes how technology enables the production of relational
wealth, which benefits both people and businesses by encouraging a culture of continual
learning and growth.
Digital knowledge competence is also a critical component for developing entrepreneurial
ecosystems, particularly in startup situations. Startups use digital training tools to upskill
people and drive creativity, ensuring they can compete in the face of new challenges like
technology disruption. These technologies promote continuous learning, allowing individuals
to adapt to constantly changing industry needs while also adding to the organization's overall
resilience and innovation potential (Chaudhuri et al., 2022).
To successfully integrate technology into human capital management, essential variables
such as corporate culture, technical compatibility, and employee competency must be
addressed. TOEEH frameworks highlight the necessity of harmonizing technical,
organizational, economic, and human components to obtain optimal results. For example,
building a supportive culture and investing in employee development is critical for the
effective deployment of AI-driven HCM solutions (Yadav et al., 2023). According to research,
firms that focus on five crucial success elements are better positioned to fulfil the full
potential of digital transformation in human capital management.
Organizations may transform their approach to human capital management by implementing
cutting-edge technology. AI-enabled software and HR analytics boost operational efficiency
while also encouraging innovation and sustainability. These technologies enable businesses
to establish a resilient and high-performing workforce, assuring their continued
competitiveness in an increasingly digital environment.
REFERENCES
1. Banerjee, P. M. (2013). Sustainable human capital: product innovation and employee
partnerships in technology firms. Cross Cultural Management an International Journal, 20(2),
216–234. https://doi.org/10.1108/13527601311313481
2. Chaudhuri, R., Chatterjee, S., Vrontis, D., & Vicentini, F. (2022). Effects of human capital
on entrepreneurial ecosystems in the emerging economy: the mediating role of digital
knowledge and innovative capability from India perspective. Journal of Intellectual Capital,
24(1), 283–305. https://doi.org/10.1108/jic-07-2021-0177
3. Yadav, R. S., Kaya, S. K., Pant, A., & Tiwari, A. (2023). AI-enabled human capital
management (HCM) software adoption using full consistency method (FUCOM): evidence
from banking industry. Global Knowledge Memory and Communication.
https://doi.org/10.1108/gkmc-04-2023-0128
APPENDIX
