Thinking that human capital is about HRM is insufficient. It is about the whole organisation’s connections with other people. Claus Møller’s definition of human capital is about employees’ emotional capital, intellectual capital, customers’ loyalty and brand, the organisational capital of processes and structure, and the organisation’s emotional intelligence.
But the HR department should be 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 reward and compensation systems. Unfortunately, originally the performance systems were designed to sustain compensation schemes. A recent HBR article depicts how performance measurement could be related to frontline performance. You may find some good ideas that business leaders can use here as well.
Setting 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.
Reassessment of the organisation’s working culture, its business role and strategic implications. Their culture is the way people do business, collaborate, set goals, make decisions to solve problems and communicate. It has a lot to do with an individual’s commitment and the bottom-line results.
Get onboarding right or farewell the employer brand. With talent being more difficult to attract, organisations have no second chance to correct the first-time impression. It’s better to invest in employee retention and rethink the improvements of the onboarding process.
Well-being is more than just training options. Well-being is about allowing people to match their aspirations, taking responsibility, and the organisation’s needs. Workforce health is at the top but dwells on trust, a feeling of inclusiveness and speak-up culture.
Eliminate the gap between HR and L&D functions to achieve more results with fewer resources. These two functions should act as one. Instead, they are too often separated physically as well as mentally. You may 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 with administrative and process-related issues more than their success. 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 would help companies overcome tough times?
In times of crisis, an organisation should aim for the greatest flexibility. Behind the processes, business transformation, and technology are the employees and, of course, the managers.
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. The ability of managers and staff to collaborate depends on how they plan and prioritise their work.
- 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. 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 change the business for the next era and answer three “global trends”: macro challenges, expensive talent, and supply chain constraints.
It’s everyone’s job to think about our implications on human capital. Do we know enough about it, and did we prepare a plan?
We need to consider how innovation and knowledge management can be used best to improve human capital.
Another task is to address the business strategy issues and give answers to questions like How to compete? How to transform for business excellence in the market? What is the customer value? What is our employer brand value?
By doing that, the HR function can be addressed to add to operational productivity, customer centricity and leadership excellence. However, the right time is now.