People assets

How often do we hear that an organization’s most valuable asset is its people? It’s no surprise then that “human resources” have become “human capital.” (Have you changed your title yet?) If you believe that human capital is key to your company’s success, what are you doing to improve the return on investment (ROI) of this asset?


Coined by the economist Theodore Schultz in 1960, the term “human capital” refers to the learned human capacities that can be put to good use, such as dealing in abstractions, following rules, and communicating effectively. Like other capital assets – those usually held for a fairly long time and not readily converted into cash – the human serves to make money for the company. This is, after all, the real reason for having employees.

If employees are capital assets, it follows that these assets must be carefully acquired, maintained, and used as company property – at least while they are on the job. HR professionals already know this and continue to search for the most meaningful metrics to demonstrate the value of their company’s human capital and convince the powers-that-be that employees are not just another expense. While this may be a worthwhile (and often daunting) task, data does have its limits. Metrics and analysis  are important in advancing business unfortunately, both people data and financial data are, colloquially speaking, “so five minutes ago.”

Companies that achieve the greatest success in the current environment are those that are able to successfully leverage the talent of their workforce at the time it is needed. Can metrics show how this in real-time? We can measure a lot of things, but not everything. We can use the data to see what happened and to make educated guesses about what may happen. We can hypothesize, theorize, imagine, and make assumptions based on data and metrics, but how do we use them to engage workers in the zeitgeist of today?

The attributes of people that become productive in an economic context are often those derived from education. Whether this education is formal or informal, on or off the job, may be irrelevant, depending on how and when the knowledge is used.

What are the current programs and practices that can help your employees reach their full potential, encourage them to do their best work, and make them proud to be a part of your company? It may sound simplistic, but have you asked them lately? Have you talked with their managers? Finding out what other companies have done may be helpful, but their employees are not yours.

Maybe it’s time to leave that stack of papers on the desk, turn off the computer, and move out among the troops for a bit to see for yourself what’s going on. And listen, really listen, to concerns and ideas that can engage your employees and improve their ROI. Sure, data and metrics are important, but as you can discern a lot of things by just watching.