Blog | What Are The Important Factors To Successfully Recruit, Develop And Retain Human Capital?
Recruiting, developing and retaining human capital is top of the priority list for high performing organisations. Essentially all the other ways that you can build a successful business, such as innovation, close customer relationships or operational excellence rely on people, and in particular on your human capital.
Human capital can be defined as the – ‘skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organisation or country’. Therefore how to appreciate and increase the value of employees, while keeping them engaged and happy is an ongoing challenge faced by all organisations. What are the important factors to consider?
1. Simply paying for better people isn’t enough
Today’s jobseekers want more from work than just a salary. They seek a meaningful experience that they enjoy and feel passionate about. This particularly applies to the Millennial generation which by 2025 will comprise 75% of the workforce. Research from Deloitte shows that this group want to be creative and demand accelerated career growth. In the words of one of the managers Deloitte surveyed: "They don’t want a career, they want an experience”. The report notes that both Millennials and those of older generations will look for new jobs if they don’t feel engaged and purposeful in their work.
This means managers must change tack. Old recruitment, leadership and retention strategies frequently do not appeal to employees so a new approach is needed. What does this look like? It starts with feedback. Millennials have grown up in an era of always-on social networking and mobile technology where continuous interaction and feedback are the order of the day. By its very nature, this has broken down formality and increased flexibility. A rising number of all employees want to see this reflected in how they are listened to and managed. The choice is simple: adapt to the new workforce, or face a huge drop in employee engagement and performance —with a matching rise in employee turnover.
2. Adopting a three step process to develop your human capital
Employees have to be nurtured and developed. The level of maturity of their relationship with their employer can be characterised by three steps:
1) Employee satisfaction
At a basic level are they broadly happy with their job and will they remain with the company? This is typically measured through employee surveys, which should be regular and frequent if you are to ensure you have an understanding of staff satisfaction.
2) Employee engagement
Going beyond satisfaction, are employees being inspired and motivated to work in the company’s best interests?
3) Employee mobilisation
Staff feel empowered to quickly respond to opportunities and threats themselves, without waiting for orders from above, using their experience and understanding of the company to deliver on business objectives.
The third phase is obviously the most critical and delivers the greatest return on human capital. However, it is also the most difficult to achieve. To truly mobilise employees, leaders must aim high and be willing to experiment by challenging dogmas, adapting swiftly to change, and exploring fringe ideas.
3. The importance of mature leadership to human capital
In the same way that employees move through different steps in their development, so does an organisation’s leadership model. Mature leadership means analysing the impact from employees and working with individual managers to ensure they assume greater responsibility for employee development and taking staff feedback seriously. This is a continuous process that allows leadership to mature further until it has sufficient insight to align workforce competencies and workgroups with business objectives.
Mature leadership means operating from a perspective of foresight – using quantitative management based on real metrics from the business and employee feedback to ensure the right changes are made to empower employees and integrate human capital into the business. This means that some of the following operational areas will need to be tweaked as needed:
- Human capital management strategy
- Work processes
- Organisational change and competence
- Employee feedback management technology
Adjusting each of these elements in the right order is the key to developing and retaining human capital.
4. Putting it in to place
The first step to better managing your human capital is to see exactly where you are today. How mature is your leadership and how engaged are your employees? This relies on access to good, timely feedback data. By asking if your employees are satisfied, engaged or mobilised, you can set a start point to improve from. Equally, asking tough questions about your leadership may feel difficult, but done properly will provide honest answers that help you to determine which element of your approach can be changed for the greatest positive effect.
By understanding where you are in terms of maturity you can make the right investment decisions. For example, if the majority of your employees are not yet satisfied, there is no point trying to mobilise them – take a considered approach that listens to their feedback and acts on the concerns.
The original definition of human capital talked about two points – on the positive side the value an employee brings, balanced against their cost to the organisation. By listening to staff feedback, understanding the maturity level of your management and then taking steps to improve, you can ensure that value outweighs cost and your human capital contributes to lasting business success.
This blog was first posted on HR Zone on 23rd November, 2016