If you’re like me, the term human capital would seem to be defined by some neophyte whose ideal work environment was akin to taking the “people” out of “people management”. Yes, I’m writing directly to you, Mr. or Ms. Manager. You know who you are – the person who just wants to know how many years of “experience” someone has and from where their higher education degree was obtained in order to make a “safe decision”.
And yet, here we are again, discussing “human capital” because – as it turns out – it’s actually really important.
Re-assess how you feel about the term human capital
I know what you’re thinking, “Wow, Julie. You’ve really lost me now. I thought you valued personal contribution and detested the practice of making people feel like a number or a part of some cliche new term.” You’re not wrong, my dear reader. With every fiber of my being, I have devoted my consultancy to redefining what personal value means to the workplace and it’s importance to the greater “why” of the organization. Despite your first impressions on the stodgy term “human capital”, these 2 words can be an immensely impactful contribution to your “why” that modern day leaders such as yourself should be defining, tracking and measuring.
Actually, the idea of turning everyone into a number feels inhumane and terribly boorish, and yet “human capital” actual refers to the practice of assessing a value or cost to the skills, knowledge, and experience possessed by an individual or group of contributors to your organization. Somehow the “what have you done for me lately” has evolved into “what value does your skills and experience contribute to the collective whole. Now that’s not so bad, is it?
Evaluate your own human capital needs
Maybe you’ve heard of – or use – some terms to demonstrate elements of valuing or managing human capital, like “SME’s” or subject matter experts. The modern day leader recognizes the value of human capital, building their thought leadership around the contributions of the people, and their collective “why” reflects this. You can do this, too.
Here are 3 human capital areas you can begin assessing and investing in today:
- Learning management – How do the systems you have in place help you to manage the organizational roles or process design to ensure better outcomes for your learning management?
- Competency development – What types of skills and or management training have you identified as success factors to up-skill your work staff?
- Performance evaluation and goal setting – How can you use performance evaluation tools – including retention and reward management – from permanent workforce, peers and supervisors to core consultants or 3rd party delivery affiliates?
Optimize your success for human capital
Acknowledging the role your “human capital” has in your success, is a great start. Here are 4 common success factors that will help you on your journey:
- Goal setting – Be honest with yourself about where you’re at and what the ideal, yet realistic working environment looks like to your organization. If you’re serious about getting the most out of human capital, you’ll also want to consider the working environment. Identify the gaps or potential roadblocks in your working conditions that could interfere with human capital success.
- Commitment from the top-down – Success and failures rolls down-hill at equal speeds, right? Make sure the leadership team in not only on-board, but also are participating in and held accountable for the human capital program.
- Technology vendor selection – There is no such thing as a one-size-fits all tool for managing human capital. Do your research and perhaps even work with a consultant to help you select the right, cost effective tool for your business.
- Training – Establish a training program to make sure everyone on your team is equally informed and has a chance to ask questions openly about how your human capital program affects – and benefits them.
What’s next?
Depending on where you’re at in your journey, now is the time to consider what you need to do to either establish or refine your Human Capital Practices. My hope for you is that you find ways to assess and consider the value of human capital beyond just a degree or experience. In the meantime, I’ll leave it to you to decide what this means for you and your organization.
Need help figuring out the why/how/what of the principles of human capital and its relation to your business? Or perhaps you’re ready to learn about how to measure intangible assets and how much to invest? When you’re ready to discuss your recent efforts to manage human capital, contact us for a free consultation.
