Human capital — the currency of talent

Posted: September 30, 2015

Human capitalIntangible, unpredictable and financially enigmatic, the elusive concept of human capital is arguably the most valuable asset in a business. It is the collective value of individuals within an organisation – the intelligence, knowledge, talent, EQ, training, experience – that represents a form of wealth that can be guided to achieve an organisation’s goals and realise its strategy.

The World Economic Forum (WEF) releases an annual report on the topic, rating 124 countries on their ability to maximise human capital (South Africa is in 92nd place). In the preface of the 2015 report, Klaus Schwab, founder and executive chairman of the WEF, says it is “talent, not capital, that will be the key factor linking innovation, competitiveness and growth in the 21st century.” World over, unemployment is at unprecedented highs but employers report that they struggle to find talent. “Yet the world’s pool of latent talent is enormous,” says Schwab. “To unlock it, governments, business leaders, educational institutions and individuals must each understand better the global talent value chain. Business, in particular, must re-think its role as a consumer of ‘ready-made’ human capital to proactively seek out, engage and develop people’s potential. Better data and metrics are critical to this undertaking.”

Eleanor Potter, Consumer Executive at Autopage, is passionate about this subject and agrees that business must change how it views its people. It is ultimately, she believes, the difference between what makes a business good and what makes a business great. “If we want to change business and make it more fair and equitable, and quite frankly, sustainable in the long term, it is how we manage people and their participation and productivity in the office, that has to change,” she says. “And it’s not about clocking in and out at certain times. The difference between success and failure, simply is: your people. Their value lies in how you allow them to participate in the organisation that they are part of.”

Potter is currently facilitating a leadership programme at Autopage – Vital Leadership – which aims to transform the Autopage business through investment in its people. Much of how human capital is developed comes down to an organisation’s management, says Potter. “Very few people are motivated by money. Research has shown that. They’re motivated by recognition, by empowerment and by a greater sense of purpose.”

It is through empowerment that people can develop their potential and their talent. “If you’re not doing that, allowing your people to participate in a collaborative way, then you shouldn’t be in a management position,” she says. “It’s about EQ, not intelligence as such, but about how you engage with people. If, as a manager, I’m facilitating a process for you to understand your wealth of knowledge and to empower you to make a decision and implement and share it, then I’ve done my job. That’s all my job is actually, and it sounds very simple.”

In Potter’s experience of running this programme at various corporate organisations, she talks about the positive impact, not just from a social and human perspective, but from a business angle. Things like sick leave decreases, productivity increases as staff is allowed more freedom to be creative. “If people are in a good frame of mind, they’re more productive and this of course rubs off on the customer experience. These are things we can measure.”