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Talent acquisition, transformation, and management are critical anchors for the growth of the (IT) industry," Infosys co-chairman, Nandan Nilekani, said last year. His statement rings true not just for the booming IT industry, but also for all major industry segments in India. With the countrys economy growing at a steady 8% annual rate, India is now poised to become the worlds third-largest economy (behind China and the US) within two or three decades, if economists are to be believed.

Over the last few years, India has been reaping the rewards of its advantageous demographic dividend, and many companies are looking at ways to have a steady stream of quality talent and, more importantly, ensure retention and satisfaction of employees. The dizzying pace of talent acquisition creates a challenge for smoother assimilation and cultural binding of new recruits into the organizations fold. At no other point in Indias history did Human Capital Management (HCM) assume so much importance as it does now.

So, what does HCM really mean? The Chartered Institute for Personnel and Development (CIPD) describes human capital management as the "skill, experience, and capacity to innovate that is owned by individuals." This is a basic definition, and a more specific one is provided by the International School of Human Capital Management (ISHCM); HCM is an organizations multi-disciplined, integrated approach to optimize the capabilities and performance of its management and employees.

The New HR Mantra
While the realm of human resources refers to people as resources, the term human capital reflects employees as assets. HR issues are now business issues, and those who tackle human capital issues are prized. Human resources management is now more of a technical and proactive approach that blends traditional HR disciplines with technical measurement and performance, and financial and economic disciplines.

A recent cover story article on India in the US-based HR magazine noted: "The human capital challenges facing some of Indias hottest sectors are similar to the skills shortages that some employers in the United States face todayand that more may encounter in the future as vast numbers of baby boomers retire, legal immigrant laborers grow scarcer and Americas educational system continues to struggle to produce qualified new workers."

It goes on to state that while similar challenges face both nations, the stakes are higher in India. "For many companies in highly competitive sectors, a lack of talented workers constitutes a make-or-break HR issue, which makes the value of good HR management readily apparent to top executives."

HCM is becoming core to any enterprise simply because the employees are the companys primary assets. An increasingly globalized workforce throws yet another challenge for companies managing teams across geographies and cultures.

With Information Technology simplifying business processes and day-to-day functions across companies, can HR be far behind?

According to Oracle, globalization would force large enterprises to reevaluate the importance of running a standardized HR system as a single instance, and take into account localized features that are more suitable for their far-flung operations.

Businesses have access to technology infrastructure, cutting-edge communication systems, information enriched processes, and deep pockets. However, their key challenge lies in aligning their human capital to their business goals and in measuring their performance in the business. Nagaraj Bhargava, VP, Marketing and Sales Operation, SAP India, opines that adoption of an HCM system is becoming a long-term solution for organizations to address perennial staffing and productivity problems, while providing a stable and proven platform to better handle growth, change, and future market demands.

Vijay Dewan, MD, the Park Hotels, which recently went live on SAPs HCM software says, "We wanted Park Hotels to be a world-class organization both in terms of employee engagements and customer engagements. We believe that highly engaged employees lead to highly engaged customers. So, we decided to implement this HR system." Park is the only hospitality group in India to have implemented such a comprehensive system.

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