“When companies truly invest in human capital to the extent that it invokes a sense of loyalty, they now have a serious competitive advantage.” – Hendrith Vanlon Smith Jr, CEO of Mayflower-Plymouth.
All organizations want to be successful and achieve their goals. While these are common characteristics, the definition of success and goals vary greatly from organization to organization. Further, how success and goals are achieved is certainly unique and based on individual organizational strategy and achieving unique organizational goals is certainly accomplished through the actions of employees. Employees, or human capital, are an organization’s greatest asset.
While employees have not always been recognized as the organization’s greatest asset, current national and global events like recessions, technology advancements, a pandemic and a new generation of workers with new ideas about employment, have pushed employers to recognize their employees as essential to organizational success. In fact, with resounding support for the value of employees, contemporary management leaders are recognizing our current time as The “Era of Human Capital,” (McGowan, Shipley & Friedman, 2020). The Era of Human Capital describes that for each company, the single-most important asset for value creation is their employee base, their human capital.
There are many reasons why employees should be acknowledged as the organization’s most valuable asset and these reasons include:
- They represent the organization to the stakeholders.
- They deliver the goods, services, or products to the stakeholders.
- They create innovation.
- Their knowledge is irreplaceable.
- They fill knowledge gaps.
- They help organizations grow and sustain.
Recognizing the unique value that employees bring to each organization is the first step in capturing Human Capital, but the second step may be more challenging. Once Human Capital is recruited within the organization, the organization must retain their talent. Retaining talent in the contemporary work environment requires dynamic understanding of the organization, the industry, and each employee’s needs. Current retention efforts must include many functions that support human capital like:
- Quality onboarding programs.
- Rewards and recognition.
- Opportunities to advance.
- Meaningful work.
- Flexible work that supports work/life balance.
- Wellness offerings.
- Continuous feedback.
- Training and development.
Notably, many of these critical retention efforts are led by the Human Resources Department. While Human Resources has traditionally handled employee recruitment, hiring, training, conflict resolution and benefits, Human Resources is increasingly called upon to engage in Strategic Human Capital efforts like engaging employees, strengthening culture, providing guidance to C-suite and senior leadership, helping individual employees understand their purpose within the organization and managing talent.
So, as we increasingly acknowledge the value of each employee within an organization and we embrace The Era of Human Capital, let’s also recognize that the rise of The Era of Human Capital is also giving rise to a new era of Human Resources. In support of Human Capital, the HR leader is moving to the forefront of organizational strategic planning. While we watch this new era unfold, it is also significant to understand that HR’s role will continue to evolve. In other words, we can expect that HR will evolve with each new working generation striving to support the unique contemporary needs of the worker. With this in mind, I am looking forward to The Rise of The Human Capital Era and The Strategic Human Resources Department and I am certain you can’t have one without the other.
McGowan, H., & Shipley, C. (2020). The Adaptation Advantage. Let Go. Learn Fast and Thrive in the Future of Work. Wiley.