Human Capital, Defined
In the business world, human capital is the economic value of an employee’s set of skills. For policy makers, human capital is the capacity of the population to drive economic growth.
Until recently, human capital has been viewed as a function of education as well as experience—which includes both training and learning by doing. But in today’s business landscape, health (physical, cognitive and mental) has come to be included as a critical component of human capital. Additionally, the value of human capital is determined by the physical, social and economic context of a society, so that context can help shape how a worker’s attributes can be rewarded.
Taking all this together, human capital breaks out into four main pillars: three core determinants of human capital (education, health and employment) plus a fourth group of factors allowing these three core determinants to translate into greater returns.
How Do We Measure It?
To try to measure human capital, human resource professionals do annual employee engagement surveys, onboarding surveys, exit interviews, 360’s, custom rubrics, pre-employment screening and a host of other things trying to figure out how we get the most out of our employees. And why? Because let’s face it: we all want to be happy at work, and we fundamentally need to keep productivity high to make a profit. Competition in business is fierce. So, we need to find a way to get that extra 1% wherever we can.
What Goes into That 1%
What’s the best recipe for that extra special something? There really isn’t one magic mix. Every company culture has a unique set of ingredients fitting the needs and preferences of its unique population. Those ingredients may be industry-specific, and they can include politics, geography, social climate, compensation, belief in senior leadership, growth opportunities and a host of other things.
Let’s consider engagement, too. In recent years, the Human Resources profession has gotten very good at measuring the correlation between engagement and performance. Now, good onboarding and retention can be tied directly to cost savings through longer employment, as can employees’ faith in senior leadership, the mission and the potential to grow within the organization. It’s also well established that workers crave rewards and recognition. With the right technology, HR can connect the dots so a clear picture can emerge about where employment costs can give way to savings that make a difference.
So, where does learning fit in all of this? Employees who participate in learning will have a better career path, be more engaged, high potential, high performing employees who provide discretionary effort on behalf of the organization. This leads to more efficiency, higher customer satisfaction and ultimately, more profit.
How Technology Helps
Today, technology is allowing us to provide educational content the way your employees want it. Long training seminars, boring LMS’s and expensive consultants are becoming a thing of the past. Your own employees—at any level—already have the knowledge needed to provide others knowledge that’s just in time, just enough, and just for me. All they need is the right technology to create their own trainings for top-down or bottom-up knowledge sharing. StepItUp provides that technology toolkit. With a social sharing platform that looks and feels like social media, engagement rates go up. As rewards and recognition flow on the platform, costs related to engagement, performance, retention and even succession planning go down.
Make StepItUp a part of your human capital measurement strategy, and discover what you can accomplish with some simple tools. Let us show you how. We would love to invite you to the conversation. Let’s talk firstname.lastname@example.org