The Importance of Human Capital

The current crisis, both health and economic, highlights the urgent need to adapt and evolve of and in our businesses with agility, speed but also values and meaning.

In this context, digital transformation is an omnipresent theme, an obvious one, in a world that has become digital, which is changing ever more quickly.

To this evidence, however, there is an imperative, that of Human Capital: resource, wealth of the company that gives it its soul, its reason for being; which “makes the difference” and will make it even more so tomorrow. The alignment of teams with values, the DNA of the company, is essential for the development of its performances over the long term.

This Human Capital, strategic for the development of the company, must be at the heart of the manager's concerns and in the central position of “his dashboard” and his decisions; in the same way as the level of the order book, profitability ratios or cash flow.

(cf. our April 2020 article “Cash is king”).

The company must consider the women and men who make up its teams, through a real human project... that must be built, developed, and on which must be invested.

For this, a clear and visible tool: adopt an employer brand strategy.

Just as a company invests in its commercial brand (in the direction of its customers and sales growth), in its corporate brand (institutional and financial credibility), it must invest in its employer brand (which focuses both on the experience of internal employees, and on external visibility for future candidates and the global ecosystem).

A clear and visible human project tool: the “employer brand” strategy

The employer brand should not be a trendy tool, a marketing device that allows you to give yourself a “good conscience” socially.

The employer brand must be a strategic project for the company; an impacting project, capable of attracting and engaging current (and future) team members on the culture and values of the company.

Also, the management of an employer brand project is similar to that of any strategic project: impetus by the manager, ad hoc steering committee, transversality, long-term horizon.

It is based on a 5-step process:

1) Definition of challenges: identification and clarification of priorities and expected impacts. For example:

• Succeed with the recruitment plan (hypergrowing company)
• Retain teams and reduce turnover
• Engaging and aligning teams with the company's values/DNA => all “Ambassadors”
• Consolidate the credibility and visibility of the company in its ecosystem => the famous “Great place to work”

2) Diagnosis of the existing situation, in particular on 3 key aspects:

• Corporate DNA: values/culture/history/mission
• HR policy in place: current practices for employees, interns and candidates
• Employer reputation: internal and external (cf. websites such as Glassdor, Indeed)

3) Recommendations for guidelines and actions, preferably in co-construction/working group mode:

• Brainstorming/ideas/external benchmark => priority actions (e.g. developing co-option)
• Definition of Key Indicators (KPIs) (e.g. number of qualified CVs received by co-optation, collaborators)

4) Decisions, arbitration of proposals:

• Go! given by the manager and the management team on the implementation of the selected actions

5) Management of the execution of the action plan: under the responsibility of the manager and an ad hoc committee

As it is a human project, it will necessarily be punctuated by actions with rapid “victories” and others with effects at more distant dates.

The Employer brand must be established, established, and disseminated, in and outside the company, with consistency, visibility and over time.

Four pragmatic components for the “employer brand”:

In practice, an operational approach for implementing concrete actions in the employer brand project is to follow the 4 phases of the employee's career within the company (see diagram below):

At each of these phases, and in accordance with the priority strategic issues, a concrete action plan and associated measurement indicators are then defined that will record the real achievement of the objectives.

Human capital: a strategic component at the center of a manager's responsibilities

In line with Peter Drucker's powerful analysis: “Culture eats strategy for breakfast! ”, the Human Project is, for the company, an imperative when many other subjects are obvious or urgent (digital transformation, business model pivot, rationalization of the production tool, etc...).

This is a crucial imperative, the foundation of the feeling of belonging and the lasting commitment of teams... determining factors in the development of the company and the increase of its performance over the long term.

The Human Project that promotes the valorization of the company's Human Capital must be one of the major concerns of the manager.

To go further: you can read our article on operational excellence