It’s often said that a company is only as good as its people.
All employees that comprise a company’s human capital are critical to its overall success. Human capital can be a company’s greatest asset; it can make or break the business strategy and is a key differentiator. According to a recent article in the Harvard Law School Forum on Corporate Governance, a company’s intangible assets, including human capital and culture, are now estimated to comprise on average 52% of a company’s market value.
The term “human capital” has been around for generations. It’s defined as the economic value of an employee’s overall experience and skills, which includes education, training and other intangibles such as loyalty and work ethic. Managing human capital is also essential in the hiring, retaining and recruitment process.
One way employers can maximize the quality of that capital is by investment —the education, experience and abilities of employees all have economic value for employers and for the economy. The more a company invests in its employees, the more productive and profitable it can be. It’s also a way to increase employee engagement and satisfaction. When employees feel they’re appreciated by management, they’re more likely to stay with the company, which enhances the company’s value even more. Here are a few ways to invest in human capital:
- Assist employees in maintaining/growing skill sets to remain competitive
- Maintain productive workplace environment for static employees
- Encourage HR department to develop new ways to invest in human capital
Embracing Diversity and Inclusion
Top talent are always looking to work in diverse and inclusive environments, but not providing one may result in not securing the ideal candidate for your team. Employees will leave your company if they feel they’re not heard or provided opportunities to advance in the workplace. A diverse and inclusive environment will definitely lead to increased employee engagement, creativity, retention and innovation.
According to a recent study by the McKinsey Global Institute, employee diversity is associated with better business results. In the study, titled “Diversity Matters”, 366 public companies were surveyed from different countries in the Western World. Two key findings resulted from the study:
- Gender-diverse companies are more likely to perform 15% better
- Ethnically-diverse companies are more likely to perform 35% better
Human Capital Opportunities from the COVID-19 Crisis
The COVID-19 pandemic has been a challenging time for employers as they struggle to maintain company stability, preserve human capital value and adjust to a remote workforce. In some cases, the crisis has resulted in opportunities for changes in business models and future innovation. According to a global survey of 514 employers:
- 63% have taken action on, are planning or considering redeploying (and potentially reskilling) workers to support another function
- 57% have taken action on, are planning or considering shifting when and where work gets done
- 48% have taken action on, are planning or considering automating certain aspects of work to streamline and/or increase productivity
In addition, employee health has proved to be a genuine concern for many companies during the COVID-19 crisis. Employees responding to employer-sponsored surveys, noted that “well-being support from the employer in the form of outreach from managers and communication regarding an organization’s health and well-being efforts can serve as a buffer against anxiety.”
As companies continue to adjust to this ‘new normal’, they recognize the need to focus on balancing company and employee well-being, which incorporates financial, social, physical and emotional factors. All of this will result in sustained value for the business and workforce.
Cochran, Cochran and Yale (CCY) has developed talent and trained leaders and managers for 40+ years. We propel business success by aligning human capital with organizational strategy. CCY’s services are custom-fit to any workforce performance need, capable of supporting both large industry and small start-up employers for the entire human capital life cycle. We deliver measurable results through 40+ years in the people industry.
Interested in learning more about our services? Contact us today!