Human Capital Management has been in the spotlight quite a bit recently as companies realize the increasing value of their employees and the true cost of replacing them. This trend is predicted to continue to increase in the future as the workforce continues to grow more educated and demanding. In addition, companies have realized the value of a strong team culture, and that no technology can replace that.
So what is human capital?
“Human capital is the stock of competencies, knowledge, social and personality attributes, including creativity, cognitive abilities, embodied in the ability to perform labor so as to produce economic value. It is an aggregate economic view of the human being acting within economies, which is an attempt to capture the social, biological, cultural and psychological complexity as they interact in explicit and/or economic transactions. Many theories explicitly connect investment in human capital development to education, and the role of human capital in economic development, productivity growth, and innovation has frequently been cited as a justification for government subsidies for education and job skills training.” Wikipedia
A company that does not invest in their human capital will realize a very rapid decline in morale, quality and ability to compete. Every company should have an internal core goal of training its employees so that they become optimal resources for years to come. Companies should view their employees as important resources that play instrumental roles in the overall productivity of the organization. The development and management of individuals within their areas of expertise not only makes them indispensable resources in the future but also encourages their full effort and participation.
To focus on improving your organization’s human capital management, see where you stand based on these seven trends identified by Deloitte Consulting, LLP in 2013.
- Thinking like an economist. HR and talent leaders should adopt an economist’s mindset and expand their use of economic data to make fact-based decisions, which not only increases their alignment with the other business leaders in their organization, but also helps put people in the right positions to unlock their most valuable talents.
- The open talent economy. An organization that embraces the emerging concept of the open talent economy—a collaborative, technology-driven, rapid-cycle way of doing business—can be poised to exploit its opportunities and immerse itself more effectively in the global talent market.
- Innovating the talent brand. In order to effectively retain and attract the best talent, companies should focus on their talent brand by building leading talent practices and communicating them in innovative ways.
- Creating an elastic workplace. Leading organizations are taking a fresh look at workplace flexibility through the lens of business strategy as the issue evolves into an opportunity that impacts all employees.
- Finding the silver lining in the talent gap. The nature of retirement along with the changing ability of a generation to retire early is shifting the demographics of the workforce again. In fact, Deloitte found in a previous study that 34 percent of U.S. employees plan on delaying their retirement age. The combination of an aging workforce remaining actively employed, even when facing retirement age to a influx of talent from Generation Y, means that organizations need to determine the best way to continue to get value from older workers without holding younger workers back.
- Debunking the Superman myth. Given the ever-changing pressures on businesses today, including adopting new technologies, entering an emerging market country or adapting to new regulatory environments, companies need a bench of leaders who can operate across different environments and adapt to the unexpected.
- The performance management puzzle. To effectively motivate employees, some leading organizations are considering new performance management tools with social media characteristics that incorporate peer, customer, and other stakeholder feedback.
Click here to download Deloitte’s Human Capital Trends Report.