For large and small businesses and corporations, ensuring you offer reliable human resources and create a safe, happy work environment is essential. One way to view your employees, no matter how big or small your team is, is to view them as assets or human capital. We explain what human capital management is and why it is beneficial in more detail below…
What is human capital management?
When viewing your employees as human capital, you are able to value their worth as an asset and make investments into their future value, e.g. by providing them with training. Human capital management, therefore, is the process of developing, organising and investing in human capital.
Human capital management example
For example, the owner of a call centre may view their employees as human capital. They can value how effective their employees are as assets by analysing how many calls they can make per hour, how many successful sales they make or how high customer feedback is. To develop their workforce, the owner may provide their staff with additional training and teach them how to use online chatbots as well as making calls, for example. Companies will approach the call centre and ask to hire or use the sales team, helping the owner to manage and understand the value of his assets.
How to manage human capital
When managing human capital, whether it is one or multiple employees, it is not simply enough to invest in their value, you must ensure they are happy and feel committed to your company to make the most of your investment and protect it for the long term.
For example, a business owner may wish to provide the following as part of their management services:
• Wage incentives for completing more training
• Health and wellbeing programs (e.g. yoga classes before work)
• Emotional support (access to counselling sessions)
The role of human resources (HR)
Human resource departments for larger companies, or the employee responsible for handling HR services in a smaller company, have become essential to human capital management. HR teams can help make human capital management goals achievable and help to evaluate areas where human assets can improve. They also ensure the wellbeing of the human assets is protected, and analyse all investments to ensure they are beneficial for the employees, for example, to ensure no investment creates EH&S issues or violations.
How software can improve human capital management
Companies may wish to utilise a human resources information management system, such as the software SAP SuccessFactors. SuccessFactors creates human capital management solutions by offering managers and business owners software to analyse the performance of their assets, recruit for new assets and track the success of their investment, among many other features. Using software such as this is extremely time saving and cost-effective as it allows managers and business owners to perform human capital management processes with ease. Larger corporations may even wish to consider outsourcing their human capital management to a third-party, to ensure they get the best management services possible for their team.