Human Capital: 5 Reasons It Should Be Your Focus
For most businesses, one of the biggest financial outlays comes from the staff they employ.
Whether these are the people who man the phones of your helpline, managers who deliver on your plans for expansion or the staff who provide the IT infrastructure that means your office works efficiently, they are all important.
Human capital is the economic value that is assigned to each employee and it’s one area that bosses often fail to maximise or think about strategically.
Investing in your workforce doesn’t just mean paying them a good wage.
It also means helping them to achieve their goals and develop for the future, either by providing them with extra training or allowing them to take on new challenges.
If you an employee and are treading water in your job you are generally less likely to be engaged than if you have clear and interesting opportunities to advance.
Retaining and recruiting staff
Focusing on human capital means that you show you care about your staff as individuals.
This is vital especially when you want to retain high quality or talented employees.
If you don’t get involved in facilitating staff to move forward or achieve their goals, the likelihood is they will start looking further afield and may eventually move on.
“Retention of crucial talent is so key to the continued growth and success of your business that it is well worth investing the time and effort into ensuring these individuals are happy to stay put and develop within the company instead of looking elsewhere for professional opportunities.”
Treat your employees well and give them space to develop and word gets around as well.
That means you’re likely to attract other top talent who have heard what a great place you are to work.
Better employee engagement
When staff feel they are being valued and you have their best interests at heart, you are certain to find engagement improving.
Almost half of employees believe that their professional development is key and an important factor in how satisfied they feel with their current job.
That engagement also promotes more company loyalty which can have a huge range of benefits to the stability of a business.
Boosting return on investment
You invest a lot in your employees, not just in terms of salary but also their workspaces, hardware and the perks you offer.
It makes sense to spend a little more and help develop those individuals rather than settling for the status quo – this person knows your systems, engages with your company and will be able to deliver extra services if you take the time to offer them the CPD they need.
Productivity and profitability
There’s no doubt that employees who feel they are being invested in are likely to be loyal and engage at a deeper level than those who are not.
Investing in human capital makes sense when you see that it makes for a ‘happier’ workforce, where individual employees are being given the tools to progress.
That leads to greater productivity and profitability for your company.
You spend less time replacing valued staff and more time creating growth opportunities for your business.
A sizeable percentage of your workforce are no doubt career-minded and looking to move forward.
Ignoring human capital and failing to put adequate resources into its development is an investment opportunity that is going to waste.
If you want to get the most out of your employees, it might be time to put together a professional development plan that adds value to what you already offer.