Changing HCM to Human Experience Management


Organisations have traditionally leveraged human capital management (HCM) to get the best out of their workforce. Yet, simply supporting HR-driven processes is no longer enough as companies begin delivering the experiences employees need to do their best. The shift from HCM to human experience management (HXM) marks a new approach to life at work.

What is Human Capital Management?

HCM refers to managing an organisation’s workforce to get the best out of it. In other words, it is the actions an organisation takes to ensure employee productivity improves the numbers on graphs and reports. It involves several processes, including the acquisition, recruitment, training, management, and retention of employees.

It is an approach entirely focused on the resource and capital aspects of HR.

What is Human Experience Management?

HXM is an evolution of HCM; it centres employee experience above all else. It is a mindset that examines what employees need so that the business can thrive.

With human experience management, managers focus on finding new ways to engage their employees and provide them with the means to work faster and better. Essentially, the HXM approach helps managers identify what their employees need to have a better working experience.

What is the Difference Between HCM and HXM?

HCM solutions are primarily based on operational data (O-data). This data provides organisations with information on different events that are currently occurring, including the number of new employees, their training progress, and their turnover rate. With O-data, you can keep track of the trends and events that are taking place within your organisation.

Experience data (X-data) addresses the human aspects of the workplace and provides information on why certain things are happening within the organisation. For instance, if workers are leaving, X-data will indicate the beliefs, emotions, and intentions behind it.

With this, we can conclude that O-data informs us of what is happening. On the other hand, X-data lets us know why it is happening. HXM combines both data types to ensure employees have an improved experience within the organisation. Placing an HXM lens on HR processes helps leaders analyse how they can better engage their employees.

Three reasons your organisation should adopt Human Experience Management

While HCM served its purpose and helped organisations increase productivity, it is no longer enough. Human experience management is the future of human resources.

Here are three reasons your organisation might make the shift to HXM:

Increase employee satisfaction

In the past, employees were content with getting good pay and serving under a direct manager. However, this is no longer the case. In this day and age, they want to have a good experience at work; they want to feel like what they do matters.

Traditionally, companies prioritised customer experience and put all their efforts into ensuring their customers had an excellent experience. However, what they failed to understand is that their employees deserve the same treatment. An exceptional employee experience improves engagement, performance, retention, and business progress.

Modern employees expect you to prioritise their experiences and put processes in place to boost them. This attitude is especially true of millennials who have more flexibility in terms of work opportunities.

Compete for talent

These days, technology evolves quickly. There is a need to upskill and reskill your employees frequently. By doing this, you will ensure they develop with their roles and provide value despite technological progress.

However, this will not always be enough. In some instances, you will need to hire employees who have the skills your organisation needs for growth. Seeing as such employees will be in high demand, your company needs to stand out and appeal to them.

A strong focus on HXM is an excellent way to grow your talent pipeline and retain your current talent.

Develop a strong company culture

Another benefit to adopting HXM is that it will help you develop a strong and robust company culture.

Why is this important? Because your company culture dictates many things in your organisation, including employee retention. Furthermore, your employees will feel treasured and motivated to give their best because their voices are reflected in the organisation’s culture. 

Tambla can help you get the most from your SAP solution

Tambla has over a decade of experience delivering payroll and HCM solutions to organisations in Australia. We have a deep understanding of SAP solutions and can assist with planning, provisioning, implementing, hosting, and supporting your SAP solutions.

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