Develop your people or stagnate

How do companies grow and thrive if they don’t develop their most valuable asset – human capital? What is human capital in the first place? It is a collection of skills, experience and expertise of all the people of an organisation. Organisations, in order to have sustained advantage and high returns on investment rely not only on technology, patents or strategic positions but also on how they manage their workforce. 

The rate of change in organisations is dizzying and the management of surprise is the order of the day! One of the main elements of this rapidly accelerating change is that jobs themselves are becoming less clear and less bounded. If the predictions about less hierarchy and more horizontal project based work are at all accurate, managerial, professional and technical employees will find themselves switching roles frequently. 

Organisations have to constantly engage themselves in improving and developing the effectiveness of their people. The development of human capital, by way of training, formal and informal coaching has a direct impact to the bottom line if done correctly. This is one of the prime functions of the HRD department. 

The starting point for this capital development is ‘role analysis’. In managerial jobs, it is vital to be clear about the roles that the job holder must carry. ‘Role’ is explained as a set of specific tasks a person performs because of the position held. Task is nothing but specific activity quite often bound by time.

The Role Analysis Technique called RAT, is used to clarify the role expectations and obligations of the role occupant. By analysing the focal role, its place in the organisation, the rationale for its existence and its place in achieving the overall organisation’s goals, specific duties to be performed are examined. In this exercise, the jobholder or manager is encouraged to produce a list of duties, responsibilities and behaviours that they perceive necessary of the job holder to be effective. 

RAT is the first route and common procedure. The next steps are the concept of KPA (Key Performance Areas) and Competency Mapping which are found to be very useful in developing individuals in the organisation. The KPA represents the functions that are critical and vital for a role and also it distinguishes between an effective and less effective employee. 

Competencies lie at the heart of every successful activity. They define the key behaviours necessary to perform a job successfully. Once the job role is specified in detail, the key functions identified, as well as the key competency behaviours, human capital development can begin! The next step is to identify where improvements are required to be made, by identifying gaps and comparison to the ideal employee in a specific function. 

Therefore, Human Capital Development is a strategic process – understanding every employee’s role in an organisation, their key functions and behaviours at present and comparing it to the ideal behaviours and performance is the start. 

From my experience with some companies, training is a means of motivation, a day out for the team and perhaps some perspective gained – however, the question is, does it impact the bottom line? Formal training for most is a cost, a burden, occupies valuable productive time…why should an employee be in a training room when they can add value to the profit margins, one might say.

It’s those companies that recognise the value of developing human capital that show promise of sustainability and growth in the years to come. Let’s hope that stakeholders and senior management embrace this goal with full force and conviction. Failing this therein lie the demise of those companies simply due to the lack of recognition for the most valuable asset – ‘the people’.