Every company is what it is because of its employees. Individuals who make up a company’s workforce are responsible for its success or failure. That’s why it’s worth investing in your people to increase your human capital.
Even if it temporarily decreases your budget, this investment will allow your employees to efficiently produce more revenue and profit for your company in the long run. They’ll also stick around for the long term if they know you care about their development.
The human capital could be defined as the combination of three main capitals:
- The Knowledge capital: this capital refers to the set of attainments your workforce has acquired through their academic background, courses, workshops … It could be reflected as their college degree, hard skills or work experience.
- The Emotional capital: every employee has its own way to impact its company and that what could differentiate it from other competitors; soft skills like problem-solving, creativity, critical thinking or emotional intelligence represent the elements of human capital’s emotional background.
- The Social capital: a company would be useless without having meaningful relationships that links it with its stakeholders and that’s what defines the social capital of a company; it could be described as the entirety of the relationships the company has built to achieve its goals so it could be its professional network or the social status of its employees.
If your organization employs people who have more education, more developed skills, and more work experience, it’ll be able to accomplish much more.
A higher human capital means employees are more capable of doing their job. But it also means they can innovate and find creative ways to solve a crisis.
Furthermore, human capital has a huge impact on the success of not just an individual company, but also the economy and this is way it is important to invest in it. The question is how to do it?
There are a few practices to increase your human capital within your organization:
- Improve your workforce education and provide ongoing coaching
People can always learn more. A company that invests in its employees’ continued learning will keep growing its human capital without having to change anything else. You can provide training related to your industry or organize collective workshops and certifications. These practices will help your workforce gain more decision-making authority skills and that would lead them to accomplish advanced roles within your company. Education doesn’t have to come in the form of traditional training or formal education. You can also coach your workforce to identify their strengths or improve their leadership behaviors.
- Provide a work culture that improves creativity:
Creative thinking can lead people to innovate more. It can also lead to better employee engagement. It is important to set up exchanging sessions in order to give your employees the opportunity to share their thought and bring up their creative ideas.They can think outside the box and have better potential to solve problems in new ways.
- Recognize employee achievement
Another relevant practice is to recognize employee achievements. It can be a ranging from a few words or a day off to prizes and financial incentives. Recognizing employee efforts and the reasons to continue working better, drives the commitment to the organization.
- Nurture your social network within your company
The more people who know you and are familiar with your skills and interest, the more opportunities you will have to seek opportunities. Find ways to expand your network and cultivate your most important contacts. Reach out to those you admire on LinkedIn. Join and participate in forums that allow you to explore your professional and personal passions.
In conclusion without human capital, a company is just objects and bank accounts. The true value of a company stems from its workforce. Investing in your people is your first step to build a better employee branding which could constitutes a major competitive advantage.