What is Human Capital?
Human capital can be defined as the combination of all the knowledge, characteristics, creativity, abilities, habits, and attributes that employees possess within the company. Human capital is what helps the business to remain economically viable. It is not only one thing – it is like an engine and consists of many different aspects and components. One of the most important aspects of human capital is intellectual property. This does not only mean the patents, training manuals, and other pieces of information that are contained in the filing systems of the company, but also the abstract knowledge of the employees within the organisation.
Why is Human Capital Important?
Think about it like this: ALL the information about your business that makes it work are usually either created by the employees, and only about 50% of this is usually documented on your system. Business owners tend to think that by documenting procedures and processes, they manage to capture how the system should work, but there are a lot of shortcuts, difficulties and alterations that are applied every day by employees. This is your human capital and intellectual property.
Business owners need to learn how to tap into the way people work and how they perform their jobs on a constant basis in order to keep that knowledge inside of the company. In addition to this, they need to know how to document this knowledge, how to apply it, and how to update it as time goes by. Every time an employee leaves your company, they take a whole lot of knowledge with them, and proper human capital utilisation allows the business owner to hold on to concepts and ideas that could create a completely new take on how a particular job is done. At the end of the day, employees are there to create an economically viable value to the business, and that has to be tapped as far as possible.
Business managers tend to have the perception that as long as enough training manuals and induction processes are put into place everything is okay, but this could not be farther from the truth. For instance, one of your employees may have received the training, read the training manual, and then found another way to do their jobs more effectively in a lot less time. If this is not communicated to the managers, that knowledge is lost. Employees have to be encouraged to contribute at all times when it comes to the knowledge and skills they develop while working at the company.
How FWA Organisational Development Can Help
If you are struggling to pinpoint where your human capital benefits your business and how to ensure that you retain and use as much of this as possible, you need the help of an expert. The truth is that most small- or medium-sized companies do not take note of their employees’ intellectual property that can benefit the company in the long run. Being able to do this may require the assistance of an external expert, and at FWA Organisational Development we have the right experts to help you make the most of your human capital. We are good at many things, including training and development programmes for your employees, the processes and procedures that govern the effective management of your business, and the experience to ensure that allows you to you tap into your company’s human capital.
At FWA Organisational Development, we see it as our business to look after your business, and we help you to ensure that your organisational development, people training, and human capital abilities are taken care of. We thrive on the success of our clients and we always provide clear, practical, and applicable solutions.
Give us a call today to find out more about how we can help you make the most of your human capital!