Working capital management refers to the strategic allocation and efficient utilization of resources, including personnel and budgetary resources, to ensure the smooth operation of HR functions while optimizing costs and achieving organizational goals. This involves managing HR assets and liabilities in a way that maintains a balance between staffing needs, budget constraints, and the organization's overall human capital objectives.
A company may need to hire additional staff to meet a sudden increase in project demands. In this case, working capital management in HR would entail analyzing the available budget, evaluating the skills required, and making informed decisions on whether to hire new employees or redistribute existing resources, such as reassigning current employees to the project temporarily. This approach ensures that HR functions remain agile and cost-effective, contributing to the company's overall financial health.