Thinking that human capital is purely about HRM is an overly simplistic and insufficient view. Human capital is about the whole organisation’s myriads of connections with other people. Claus Møller’s definition of human capital is about employees’ emotional and intellectual capital; the perception of the brand (goodwill) and customer loyalty; the organisational capital of processes, systems and structure; as well as the organisation’s emotional intelligence.
This immediately touches many different departments and teams, but the HR department should be the one steering and managing the human capital to get ahead in 2023. What’s your strategy? Here are some options to think about:
Performance management should support performance instead of just reward and compensation systems. Unfortunately, originally the performance systems were designed to sustain compensation schemes. A recent Harvard Business Review article depicts how performance measurement could be related to frontline performance. You may find some good ideas that you can use in your organisation.
Settling on flexible working options that work for a majority and allow the minority enough sensible options. Hybrid work and business transformation need to consider employees’ and customers’ needs. Did your organisation develop a clear policy on this as staff started to return to the workplace after Covid-19? Is it working or does it require tweaks?
Reassessment of the organisation’s working culture, its business role and strategic implications. The corporate culture dictates the way people do business, collaborate, set goals, make decisions to solve problems and communicate. It also has a major impact on an individual’s commitment and the bottom-line results of the whole company.
Get onboarding right or risk jeopardising your employer brand. With talent being more difficult to attract, organisations have no second chance to make or correct a first impression. It’s better to invest in employee retention and rethink the improvements of the onboarding process.
Well-being is about more than just training options. Well-being is about allowing people to match their aspirations, and taking responsibility for them, as well as the organisation’s needs for a happy, healthy, present and productive workforce. Workforce health is at the top of the pyramid, but it rests on trust, a feeling of inclusiveness and a culture where staff feel they can speak freely without risk of sanctions.
Eliminate the gap between HR and L&D functions to achieve better results with fewer resources. These two functions should act as one. Instead, they are too often separated physically as well as mentally. You can guess which one usually governs the budget.
The HR function should listen to employees. Many employees say HR is not dealing with their needs, but are too focused (obsessed?) with administrative and process-related issues. We have heard it said more than once that it’s downright detrimental to the success of the individuals and the company as a whole. In this case, HR’s task is to “listen to understand” the organisation – and create an environment in which the employer-employee relationship is inclusive.
Why is it that these suggestions could help companies overcome tough times?
In times of crisis (and, as the world has shown us repeatedly over the last few years, the external factors of change have often led to a full-blown crisis), an organisation should aim for the greatest flexibility to best weather any storms. Behind the processes, business transformation, and technology are the employees and, of course, the managers. Throughout mankind’s history, we have been resistant to change because we are often afraid of the unknown.
There are several business implications we want to address:
- Leadership and management effectiveness. How managers and leaders use their time will define how well a company seize the opportunities for cost reduction and possible innovation, or even industry disruption. The ability of managers and staff to collaborate depends on how they plan and prioritise their work – and necessitates a culture without distrust, i.e. a feeling of “we’re in this together”.
- Employee experience for the greatest engagement and collaboration between teams and various departments. A company can do nothing for customer value without cooperation among teams and individuals in a team – or between two or more teams. These links are an organisation’s tacit human capital, which is often not stressed enough until external challenges catch the organisation unprepared.
- Change management – or, better say, business management. How to respond to change – and how to change the business for the next era and solve issues which affects all of us on a global scale: macro-economic challenges, the rising cost of talent, and supply chain constraints.
It’s everyone’s job in a well-run organisation to think about the implications on human capital. Do we know enough about the implications, and did we prepare a plan? Can we execute on that plan or are we adaptable and able to change it quickly to reflect a new reality?
We also need to consider how innovation and knowledge management can best be used to improve the human capital in our organisation. How can we ensure that we don’t get stuck in a continuous loop of new technology and management fads?
Another task is to address the business strategy issues, defining how we can compete and how we can transform into an organisation delivering business excellence. We also need to look at where the customer value lies and how we build our employer brand value.
By doing that, the HR function can be addressed to add to operational productivity, customer centricity and leadership excellence. There is no time like the present, so contact us to hear more about how we can get you started on your transformational journey now.