Transformation from Personnel to Human Capital

 Over the years, the terms used to describe staff and employees in businesses have changed. We have moved from "personnel" to "human resources" (HR) and now "human capital”. Other phrases, such as "talent management" have also emerged. These terms can appear to be dehumanizing. That is why some HR manager titles include the word "people" in preference to "human resources".

The important point is the mindset behind the organization’s operation. If people are valued, and all management and leadership actions demonstrate that, then the terminology is not so important. People are still the most important asset. The importance of people in organizations and discusses some issues relating to the achievement of high levels of performance for human resources.

Are managers mean?

Many employees seem to think that they are. In training sessions over the last twenty years, in both the public and private sectors alike and received some comments criticizing managers for being uncaring, inconsiderate and bombastic or the like.

Comments on participant training evaluation forms have included comments like "this training should be compulsory for all managers". Such comments show that employees believe that managers need to develop their interpersonal and leadership skills. They also indicate concerns about the way employees feel they are managed. When such concerns are discussed with participants, a better picture emerges. Often some clarification is required. Sometimes misunderstandings have occurred.

Unfortunately, this does not negate the impact of negative feelings in the first place. Perception is different to reality, but it is perception that guides feelings. If employees have a perception which is negative, then morale and performance will suffer.

So what can managers do?

The first thing is to be very conscious of how statements and actions may be perceived. Managerial actions must match the rhetoric. Employees look for the behaviour that supports the words. Many people can quote examples of managers talking about the importance of customer service whilst simultaneously slashing operating budgets. This mismatch between the rhetoric and actions constantly undermines the attempts made by organisations to bring about cultural change.

Secondly, any consultant will tell you that the most frequently mentioned problem in most organizations is communication. Communication flow throughout the organisation is essential. Communication channels need to be adjusted for the more fluid organizational structures and the new technologies.

Thirdly, managers need to pay constant attention to the people issues, particularly in environments of change. Most people do not like change being forced on them. Some are used to change. Some welcome it, particularly if they play a role in determining and implementing it. The emphasis nowadays on increased participation in the workplace is partly a reflection of the environment of constant change. We need participation to reduce the stress change causes.

Many organizations are experiencing relatively high employee turnover, but managers are saying they do not have the time to investigate the reasons. These warning signs may require investigation, particularly remembering the old adage that symptoms may mask the real problem. One of my favourite stories as a trainer concerns the maintenance manager who was constantly asked to check the air conditioning in certain sections of a large office building. Sometimes he was asked back regularly because employees were constantly complaining about being too hot or too cold. His equipment consistently found the temperature to be correct. Later he realized that the temperature complaints were symptoms of a problem, the real problem being with the workgroup itself. There were real problems with their morale and the organisation culture was not right. The problem manifested itself indirectly.

One of the key issues now is increased workload across all organizational levels. Increased workload has arisen because of restructuring, downsizing, increased responsibilities etc.

A real difficulty is determining whether a person has too much work, or alternatively, is inefficient or ineffective. People can innocently confuse "busyness" with efficiency or effectiveness. It is important to review activities and processes to assess their importance and contribution. Morale and organisation culture may also be a factor.

One important factor is workload associated with the planning and implementation of change. Often change activities have to be run in parallel with existing systems. For example, the old payroll system still needs to be run whilst the planning, development, testing and implementation of a new computer payroll system over a six month period is carried out. The need to develop a new payroll system is not a good enough reason to stop paying people for six months! This change will place a heavy responsibility and workload on the payroll officer. Additional staff support may be required or maybe it is possible to carry the additional workload for six months. However, if the new system took two years, would the additional load be reasonable?

The additional work generated by change is often the key factor in workload discussions. Workload increases caused by change activities can be justified in the short term, particularly if the change brings better processes and increased efficiency. Incremental change is particularly stress free i.e. make a change, reap the benefits and increased productivity, which then frees time for more change activity, which when implemented, then frees more time for change, etc. This approach keeps the workload at a very manageable level.

If however, the changes come frequently and constantly, with little respite from normal day to day requirements, then workload can become unmanageable. If this continues, both the employee and the organisation suffer. These matters require constant attention, as the damage may be hidden. For example, if customer service levels deteriorate, it may be some time before impacts start to manifest themselves in performance indicators.

In summary, people should be treated as an asset rather than an expense item. Every effort should be taken, whether formally or informally, to develop skills and abilities and to provide opportunities for people to maximize their contribution.

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Human capital with reference to economy

A measure of the economic value of an employee's skill set. This measure builds on the basic production input of labour measure where all labour is thought to be equal. The concept of human capital recognizes that not all labour is equal and that the quality of employees can be improved by investing in them. The education, experience and abilities of an employee have an economic value for employers and for the economy as a whole.

            Economist Theodore Schultz coined the term in the 1960s to reflect the value of our human capacities. He believed human capital was like any other type of capital; it could be invested in through education, training and enhanced benefits that will lead to an improvement in the quality and level of production.

            The value of human resources contribution for any productive work depends on the deployable skills and competencies for creating wealth for the organization in terms of sell able products and services. The skills and competencies of any person are developed and accumulated as capital over a period of time by means of education, training, development and employment in the specified work.

The research has clearly shown that the productivity and performance of human resources will increase with increase in human capital, so the growth in the employability, remuneration and employment rate in the country. Human capital management is a strategic activity for the well being of any organization and the society at large, and is the fulfilling reason for setting up an organization in the name "Human Capital" for its systematic development and management.

Companies can invest in intellectual capital, just as countries invest in human capital, through training programs and hiring practices. Human resources departments can develop a long-term strategy to maximize human capital. Social investment in human capital is a matter of public policy. Examples of policies that tend to increase a country's stock of human capital include using the human capital of women, investing in higher education, supporting dropout prevention programs, and encouraging highly skilled immigrants to enter the workforce.

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Current trends of Human capital

Today’s workforce is no longer a set of employees who come into the office or factory each morning or shift and go home each night. More and more of the workforce is composed of contingent employees working variable, often part-time hours or schedules, compensated hourly, operating remotely, or actually working for an external firm.

Think again about diversity

The power of diversity goes far beyond talent supply; it’s becoming widely accepted, for example, that an organisation is more likely to predict consumer preferences if it has a workforce that mirrors its customer base. And there’s evidence that workforce diversity brings greater innovation and creativity, a reduction in ‘group think’ and improved governance. But it’s important to understand that diversity comes in many forms. A recent report from the Center for Talent Innovation in New York identified ‘two-dimensional diversity’ – this distinguishes inherent or surface-level diversity (gender, race, age, religious background, socioeconomic background, sexual orientation, disability, nationality) from acquired diversity (cultural fluency, generational savvy, gender smarts, social media skills, cross-functional knowledge, work experience, a global mindset). Acquired diversity means, in essence, a proliferation of perspectives. Our work with Professor Roger Steare, Corporate Philosopher in Residence at Cass Business School, into the role of ethics in leadership and management has shown how differences – especially gender, age, religion and politics – influence ethical perspectives when making decisions. Organizations need to work with inherent diversity as they adapt their talent strategy in response to unprecedented demographic change, but they must cultivate acquired diversity if they are to realize the greatest value.

Culture and Engagement

Employees are now like customers; companies have to consider them volunteers, not just workers:

As the job market has heated up and new technologies have exploded, power has shifted from the employer to the employee. Websites like Glassdoor, LinkedIn, Facebook, and others not only increase transparency about a company’s workplace; they make it far easier for employees to learn about new job opportunities and gain intelligence about company cultures.

•    Leaders lack an understanding of and models for culture:

Culture is driven from the top down. Yet most executives cannot even define their organization’s culture, much less figure out how to disseminate it through the company.

·   The new world of work changes the way we engage people:

The world of work is very different from and more complex than it was only a few years ago. Employees today work more hours and are nearly continuously connected to their jobs by pervasive mobile technologies. They work on demanding cross-functional teams that often bring new people together at a rapid rate. Flexibility, empowerment, development, and mobility all now play a big role in defining a company’s culture.

• Employees’ motivations have changed

Today’s workers have a new focus on purpose, mission, and work-life integration. Research shows that a variety of complex factors contribute to strong employee engagement, including job design, management, work environment, development, and leadership. Today, more than twice as many employees are motivated by work passion than career ambition (12 percent vs. 5 percent), indicating a need for leadership to focus on making the work environment compelling and enjoyable for everyone.

Google, a highly rated “best place to work” in many studies, focuses heavily on culture. The company regularly measures dozens of factors to understand what makes people productive and happy. This research has shaped Google’s workplace culture in myriad ways— from the company’s open workplace design and unlimited vacation policy to the provision of free gourmet food and on-site laundry services for employees.

Although culture and engagement play such a critical role in business performance, most organizations do a poor job of measuring their achievements or shortcomings. Historically, companies have relied on annual engagement surveys, often costing hundreds of thousands of dollars and taking months to deploy. And very few companies have a process or tools to measure culture and learn where it is strong, weak, or inconsistent. At a time when corporate cultures are being continuously debated, shaped, and redefined on social networks, the once-a-year survey is perilously obsolete.

Fortunately, new tools are emerging to provide organizations with real-time sentiment and employee feedback. A new breed of vendors offers pulse survey tools, employee sentiment management tools, culture assessment tools, and real-time employee monitoring tools to help leaders and supervisors rapidly assess when engagement is high and when problems are arising. These new tools make it possible for organizations to monitor employee sentiment with the same level of rigor and speed as they measure customer sentiment.

Predictive analytics is here and now

 If HR is to prove itself as a strategic partner, it must make use of the tools at its disposal. The best HR functions are already showing that they can provide genuine insight that helps businesses make better decisions, through their use of predictive analytics. But this must be analytics to support the business, and not just data for data’s sake. Too many organizations are limiting their use of HR data to describe what has already happened (points 2 and 3 on the curve), rather than using analytics to predict what might happen and find ways to address the problem. The excuses often put forward by HR professionals who have moved slowly on analytics – such that HR is not mature enough for predictive analytics, or doesn’t capture enough data to do predictive modeling – no longer apply. Predictive modeling is about testing hypotheses with relevant historic data, and is about the quality of that data rather than its quantity. HR is relatively new to data analytics; as a function it lacks statisticians, analysts and data visualization experts. HR analytics is about telling the story, rather than focusing on the numbers – business leaders aren’t looking for a statement of fact, they need the ‘so what?’ We’ve warned repeatedly that HR needs to act if it is to become a true strategic partner – the window of opportunity for HR professionals is closing

A Makeover is Necessary

Several factors are converging that should make reinventing HR a critical priority for companies around the world.

• CEOs and other senior executives are more worried about talent than ever before. Eighty-seven percent of our respondents are deeply concerned about culture and employee engagement, 86 percent about their leadership pipeline, and 80 percent about workforce capabilities. At the same time, 80 percent of survey respondents believe their company’s HR skills—or lack of skills—are a significant issue.

• Many organizations are moving to a global business services model, and back-office functions and systems are transitioning to cloud technology. HR is often at the fore- front of this transition. As a result, the HR function has an opportunity to play a leading role in defining the scope of retained functional roles such as business partners and centers of excellence.

• The newer HR technology platforms now offer integrated systems and more access to data, including analytics and assessment science. Employee self-service is now a reality, all but eliminating the need for HR generalists. Yet HR continues to struggle to optimize analytics.

• A highly competitive global talent market has shifted power into the hands of employees, forcing HR to redesign programs in the face of a much more demanding workforce.

• Traditional HR practices such as performance management and leader-
ship and development are undergoing radical change, forcing HR to throw away the old playbook and deliver more innovative solutions.

It all starts with the Senior HR Leader

In this era of rapid business change, the role of the CHRO becomes radically different and more demanding than ever. Today’s CHRO must be innovative and business-savvy and be able to stand toe to toe with the CEO. At the same time, a CHRO must know how to bring the HR team together and help it evolve into a more distributed, business-integrated function. CHROs must also be comfortable adopting and embracing technology and analytics, which are integral to HR’s future success.

One sign that many organizations are expecting something fundamentally different from HR is that they are bringing in a fundamentally different kind of executive as CHRO. Research shows that nearly 40 percent of new CHROs now come from the business, not from HR. At Liberty Mutual, for instance, the chief talent and enterprise services officer, Melanie Foley, previously served as executive vice president of distribution at Liberty Personal Markets.

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E-commerce firms eye big hiring in 2015

Several players look at more-than-doubling employee base; majority of hiring focused on tech, marketing roles

Despite being more technology-driven and less labour-intensive, the Indian e-commerce sector remains bullish on hiring and might continue with its fast pace of bringing more people on board through 2015.

Backed by robust growth, the leading 10 companies in the sector are themselves looking to absorb at least 15,000 professionals by December.

A major chunk of the hiring, which will include more of college graduates and less of laterals, will be in areas relating to technology, sales and marketing.

The top three are set to expand their employee base significantly. Delhi-based Snapdeal looks to double its employee base in 2015 from the current 5,000. Bengaluru-based Flipkart plans to double its technology team from the current 1,000 over the next 12-18 months. Amazon.in expects to continue its pace of 30-35 per cent expansion in employee base this year as well.

“Our current team strength is 33,000 and with the business and e-commerce industry expanding at a rapid rate, the hiring will be aggressive, with a prime focus on technology,” a Flipkart spokesperson said.

According to the sectoral body, Nasscom, the e-commerce sector in India has been growing at a compounded annual rate of 25 per cent since 2010 and has a market size of around $14 billion currently.

Recruitment in big numbers is not limited to large multi-category entities. Several vertical-specific e-tailers are also looking to aggressively ramp up their teams. Fabfurnish plans to expand its employee base by end- 2015 to 4,000 from around 1,000 currently. Others in the same category also plan to do so. Urban Ladder is looking to hire 1,400 employees in 2015, as against a total employee base of 600 now and PepperFry plans to recruit 500 more.

Online jewelry retailer Bluestone is looking to expand its employee base by 600 persons in 2015, from around 250 currently.

While tier-I colleges like the Indian Institutes of Technology (IITs) and Indian Institutes of Management (IIM) remain a preference for hiring senior leaders, most e-tailers have also tapped into tier-II engineering and management institutes.

According to human resource leaders at several e-commerce companies, students from tier-I colleges are being hired for “complex and challenging roles”, while those from other colleges will be for positions relating to “general business activities”.

Fabfurnish said 10 per cent of its senior level hiring will be from IITs and IIMs.

Beside expansion of senior leadership, which most e-commerce companies are looking at, a large part of recruitment is focused around bringing on board employees in smaller cities and towns, to expand seller and buyer footprint. Large entities, especially, are eyeing regional hiring in a big way, to ensure deeper penetration into untapped towns and cities.

Snapdeal, in the process of setting up regional teams to bring local sellers to its platform, is looking to hire aggressively for these teams. Additionally, Snapdeal will be hiring for its new Bengaluru center.

“Snapdeal is growing at a rapid pace and, needless to say, we are expanding our team as well. We are looking at doubling our team strength in the coming year,” said Saurabh Nigam, vice-president for human resources.

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TIPS TO IMPROVE YOUR LINKEDIN PROFILE

·         Upload a decent profile photo: Your LinkedIn profile photo sets the tone for everything else a viewer will experience on your page. Your picture should be recent, professional and recognizable. Avoid selfies.

·         Your headline = You, Not your job: The headline of your LinkedIn profile is highly searchable. No one on LinkedIn (or Google for that matter) is looking for “founder of ________.” So list something more search-friendly that speaks of what you do on a daily basis and for which people may want to hire you. E.g.: “Social media consultant specializing in analysis, strategy, and instruction. Author | Speaker | Educator”

·         Make you summary shine: Don’t let the positions in the “Experience” section do all the talking about your professional abilities. Many recruiters and potential clients won’t take the time to scroll that far without incentive. How have you excelled at your job? Why do you often get promotions? Why did that last person tap you on the back (or send you an email) with “NICE JOB!”? Find common traits and spell it out in the summary, preferably with numbers or percentages

·         Update you most recent information [Job/Education/Certification]: Do you have a new title? New responsibilities? A recent accomplishment that speaks of your professional prowess? Be sure to list those here.

·         Join more groups: At times LinkedIn might not seem like it, but it is considered by many to be a social network. Demonstrate your ability to network with like-minded professionals by joining LinkedIn groups. Look at your co-workers’ and competitors’ profiles to see which groups they’ve joined — pick the best of the bunch you find there.

·         Follow some influencers: By following LinkedIn “influencers,” you give viewers a sense of which thought leaders you respect — whether it is President of the World Bank Jim Kim, industrial psychologist Dr. Marla Gottschalk, or Nancy Lublin of DoSomething.org (or all three). Influencers regularly post to LinkedIn, so you’ll also be able to comment on and share articles that are meaningful to you.

·         Select skills and expertise that you want to be endorsed for: There is a ton of controversy over the value of LinkedIn endorsements. But you know what? They’re here to stay, at least for the foreseeable future. So use them to your advantage. Make sure that you list only the skills for which you want to receive thumbs up. Hide skills that will not speak well to the place you are now and the path you wish to follow in your career.

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