6 benefits of investing in human capital
Whether you want to call it human resource, human capital, talent acquisition, or something else; there is no denying that investing in human capital and building the people that work with you in the company plays a significant role in the growth of an organization.
This makes managing and maintaining your human capital resources to the optimum levels an important task so that they are actually assets that grow your business rather than become liabilities that pull it down.
Managing human capital comes with certain costs such as their salaries and other expenses they might have to incur for daily operations. A huge portion of human capital management deals with allotting, controlling, and tracking these funds.
This is where employee expense management systems come into play. These modern tech software systems are made to ensure smooth fund flow and management so that your employees don’t face any hindrances when it comes to performing their tasks, while still maintaining complete control over your finances.
Human capital in simple words refers to all your employees. In not so simple words, human capital is also the work experience your employees have, the personality traits that they carry, their intelligence and emotional intelligence, their hard and soft skills, the education and training they’ve had to perform specific tasks for your organization, and a lot of other things that make up your human capital.
Every business owner knows that an investment in human capital is important to scale. They must not only hire talented people but also support their individual growth which will ultimately lead to business success.
A business expense system is one that allows finance teams to keep track of funds and how they’re being utilized in the organization. It gives visibility to the financial controllers and helps them control the outflow of cash. Different expenditures are made on a day-to-day basis and keeping track of all of them with an expense system software is very difficult.
The expense system functions in such a way that all employee expenses are automatically recorded as and when they happen. They are integrated with corporate credit cards that are assigned to each employee and hence each transaction can be tracked and controlled through a single dashboard.
Streamlining your expense reporting process with the help of an expense management system gives you complete visibility and control over how your funds are being spent. You get granular data such as who is spending the money, what they are spending it on, and from which budget is the expense being made.
Doing all of this without a cohesive expense system is possible, but takes way too much time. Plus, the entire manual process is bound to suffer from tons of errors making it inefficient.
The biggest hindrance for employees to carry out their business expenses is usually the long approval process. Before they can make a purchase, they must seek and get approval for the funds from their managers and the finance team. This can usually take anywhere from a day to a week depending on the situation and ends up costing the employee’s productivity.
To counter this issue, expense systems work in such a way that budgets are allocated to specific departments and individuals, and rules are set in such a way that particular expenses below a certain value do not need to be approved. This gives the employee instant access and power to carry out the business expense.
The expense system software is made in such a way that each organization gets to implement its own financial policies within the platform. What this means is that the financial controller can set rules and guidelines for employees to follow which will be enforced automatically.
So for example, a rule can be set for each employee or department that transactions above $500 must go through an approval process before being executed. You can also set who the approvers will be.
So every time a transaction above $500 has to be made, a notification is directly sent to the dashboard of the approvers to either approve or reject the purchase. This way, your employees can quickly carry out expenses from wherever they are while you still maintain control over the funds.
Benefits of investing in human capital is unparalleled. At the end of the day, your team is what builds the products and defines the services that your business provides. So when your business takes care of the people that work for it, the people will take care of the business for you. Here are just a few reasons why you should invest in human capital development:
When you make the right kind of investment in your human resources, you will clearly see the people who make extra efforts. They go beyond what is expected of them and drive business results by doing extraordinary work, supporting team members, and solving problems from a futuristic point of view. Investing in people will help you spot the leaders who will ultimately grow your business.
When your business takes care of the people, the people will take care of your business. Making sure that employees are seen and heard for their issues and recommendations in an organization is very important. It makes them feel like they belong somewhere and their perspectives are valued rather than them being just another cog in the machine.
A by-product of focusing efforts towards growing your human capital is enhanced communication. This partially stems from hiring the right kind of people who enable a flow of information within the company in such a manner that everyone is on the same page regarding where the business is headed and what they want to achieve. When people work together with the same goal in mind, nothing is impossible.
Keeping your existing employees happy attracts new people. The more you grow your company with newer employees, the more diverse your workforce will be. Each employee comes with their own set of diverse life experiences. A diverse workforce allows different ideas to flourish and creativity to solve problems. Having different individuals from various walks of life also improves cultural awareness and promotes an overall healthy work environment.
Investment in human capital can be of many forms. A warm welcome to new hires, systematic orientations, training and development, opportunities to work on different projects, appraisals, incentives, and much more! All of this adds to the experience of an employee and makes for a positive work environment.
If your business has a lot of client-facing work involved where employees have to constantly coordinate with them, clients will be able to tell if your employees are unhappy or something is wrong. This can negatively affect the retention rate of your clients. So creating a work environment that supports your employees in every way possible will ensure that your team stays happy and so do your clients.
The first step in improving human capital resources is strategic hiring. The answer to your business problems from a team standpoint is usually not more people, but rather the right ones.
Individuals who showcase certain qualities that innately support the function of a business you are looking to hire for. That position could be anything from leadership, management, or a very specific skill role. Hiring can make or break the future profitability of your business. So hire strategically.
Of course, when you hire someone, you hire them for the skills they have and the work they have showcased. But this does not mean that they will not require your support.
Each company has different sets of work systems and a way of functioning. So human capital training is a must to ensure that the employee is able to gel into the system and carry out their tasks without any hiccups.
Further down the line, the company should also help employees by investing in human capital development. A person might be doing their job perfectly, but they might want to improve, do better, and explore more avenues to help. An organization in this case should invest in their learning and development as this will ultimately help the business.
Technology is a revolution that is here to stay. People can either crib that it is taking away their jobs, or they can embrace it and use it in a way that helps them do their jobs better. Business expense systems for example aren’t here to replace finance teams, they’re here to make their jobs easier and more efficient.
Finally, incentivizing employees in the form of added bonuses based on their performance or other metrics can move the needle for your business in the direction that you want.
An expense management system allows your finance team to create and enforce financial policies on the software system. This lets admins set limits to how much each individual is allowed to spend on a monthly basis. This way, even with faster collaboration, you will always stay in control of all employee expenditures.
Business decisions are made by looking at past data and using them to recognize patterns that might occur in the future again based on the nature of your business. Forecasting budget requirements becomes a crucial element in operations.
An employee expense management system gives you literally all the data you need within a single dashboard. From department-wise spending all the way to specific employee purchases, you can see all the expenses and make informed financial business decisions for the coming years.
Before tech systems, human resources were used to manually manage expenses. This was a very time-consuming and labor-intensive task for the administration. Piles of paperwork that needed to be collected, organized, used for accounting purposes, and then safely stored. Expense management software removes all the heavy lifting. It makes the finance and administrative team’s job much simpler.
The traditional way employees reported their expenses involved collecting all their expense receipts and holding on to them till the end of the month and submitting them along with the expense reports.
Not only was this difficult for the employees as there was always the risk of losing the small paper receipt, but it was also a hectic task for HR managers to remind everyone to create their expense reports and submit them.
Using an expense system eliminates all these tedious tasks and instead streamlines the whole expense reporting and reimbursement process on a single platform. This increases the productivity of the HR managers as well as all the other employees.
Rather than submitting an expense report at the end of each month, employees can simply use the mobile apps of the expense system your organization uses, and add the picture of the receipt to the relevant expense.
Once an employee does this, they can immediately submit their expense claims. The admins will get a notification and can instantly approve it after verifying the expense. Employees will no longer have to wait weeks and months to get their reimbursements.
A major benefit of using an expense system is that it lets admins see how much every employee is spending. Being able to see this data is crucial for the business owners and financial controllers as they’ll be able to look back and see whether what they had forecasted in terms of budget requirements matches up with all the actual expenses or not.
The sales team of any company most commonly has to utilize business funds for expenses. Be it traveling to meet a client or other expenses that the sales team might have to make as per client needs when you enforce a simple to use tech expense software throughout the organization, it gives your employees the flexibility and agility to make quick decisions.
There will be positions and roles in a company, such as advertisers or marketers that are highly dependent on company budgets to execute their campaigns. A smooth flow of cash and easy access to it will make sure that no work of your employee is affected because of slow budget approvals.
Without a human capital management system in place recruitment can be a big hassle. Organizing and going through hundreds of job applications and processing them will become a daymare. Tech HRM systems are built in a way that allows people managers to streamline the interview and recruitment process.
Human capital software is not just an expense that you incur every month, but rather an asset that aids in creating and deploying training and development modules for all your employees.
HR software is a great way to keep track of employee attendance, leaves, paid holidays, etc. It gives a systematic view of every individual and their behavior.
One single platform such as an HRMS is a great way to calculate and distribute monthly employee salaries. Rather than HR employees manually calculating leaves and other factors that affect salary, the system will quickly generate reports.
Rather than making reimbursements a separate task, human resource software acts as a great avenue to reimburse employee expenses along with their monthly salaries.
Since you can track major employee success metrics on an HCM software like their individual KPIs, you can analyze their performance, conduct reviews, and carry out appraisals in a smooth manner.
Volopay is an expense management system that acts as a central platform for all of your account's payables. You can easily carry out employee salaries and use the system for instant expense reimbursements.
But an even better solution we provide is physical and virtual corporate credit cards for all your employees which completely negates the need to reimburse expenses.
Another great benefit of using Volopay is that it can be integrated and synced with cloud HR software. Doing this can help you easily invite employees to the expense platform and disburse payments in a much more seamless manner.