Published 28 July 2017 Category: Business, Insights, Compass Tips, Workspace, Entrepreneur, Business, Startups

What If Companies Managed People Like Their Money?

Financial capital is abundant but carefully managed; human capital is scarce but not carefully managed.

Why? In part, it’s because we value and reward good management of financial capital. And we measure it.

The average company considers only about 15% of its employees to be difference makers. Finding, developing, and retaining this talent is hard. For most organisations, only one out of eight employees is inspired. So how can we manage human capital better?

To measure human capital, you can deploy metrics which looks at the cost and benefits of effective talent and energy management. You can measure the amount and value of the time that you put against projects or initiatives, and you can measure the return on that time. You can actively measure the amount of difference-making talent that you have in your organisation.

Invest human capital just like you invest financial capital
For human capital, we need to start thinking about the opportunity cost. One way to do this is to measure the cost of meetings. We should think about projects in terms of hours and dollars as well, and before taking on a new meeting or new initiative, include the opportunity cost of time and talent.

Many big data tools, such as Microsoft Workplace Analytics, can provide detailed reviews of how we use time. For talent, we need to know who our difference makers are and whether they are deployed in mission-critical roles and initiatives.

Recognise and reward good management of time, talent, and energy
Historically, successful investment of financial capital can make someone’s career. Even though most companies no longer offer lifetime employment, they should still find a way to create a lifetime of assignments for their difference-making talent and work hard every day to re-recruit them by creating a working environment that is inspiring and results oriented.

These are only some of the ways that we might begin to bring greater discipline to human capital management. There are likely many more creative solutions out there. Time is finite. Talent is scarce and worth fighting for. Energy can be created and destroyed. The sooner we act on these beliefs, the sooner we will get the return on human capital that we deserve.