What’s Your Human Capital Strategy?
The accelerated rate of change occurring across most industries today makes strategic planning especially challenging for business executives. It has become increasingly difficult to maintain a competitive edge in an era of low barriers to entry, increased competitor activity, rapidly changing customer needs, quickly evolving technology, and economic and legal trends. As the workplace continues to evolve, it will become ever more important to integrate your business planning with your talent-development strategy.
“Companies need to become more nimble and flexible with respect to how they manage human capital if they want to stay ahead of constantly changing demands,” says Tom Schoenfelder, Ph.D., director of Caliper’s research and development.
Rather than creating job descriptions that are simply lists of qualifications and demanding that applicants have X number of years’ experience carrying out specific tasks that were defined as tactically important in the past, business leaders need to step back and ask themselves: Why does this company exist? What are we trying to accomplish? How do we maintain and grow our position in the market? How is all of this going to look in 3 to 5 years?
Only after answering these questions can you see what the evolving functions of critical job roles are likely to be, now and in the future.
In other words, Schoenfelder says, “Once you identify the collection of functions required to support the strategy and reinforce the company’s competitive differentiators, you have a better idea of what is needed from your human capital.” Otherwise, you are following the standard, inefficient hiring model where you keep hiring new people to take on outdated and ineffective tasks that are not necessarily linked to a strategy.
Work context matters as well. Business leaders should seek a deep understanding of the company culture to answer two critical questions: first, does the culture support the strategy? and second, are we hiring and onboarding individuals who are likely to thrive in that culture? For example, does fostering an environment of autonomy and creativity lead to overall performance that supports the competitive differentiators, and are these workplace attributes highly valued by management, or is it more important for employees to follow set systems and integrate with existing processes?
Many managers will offhandedly say that their organization wants creative and independent people, but the practical reality may be that rules-followers perform better. Fortunately for senior leaders, the field of business analytics is becoming more and more sophisticated and science driven, and good analytics can help a company not only map employees to company culture but also evaluate the ROI of recent hires and refine the hiring process.
Dr. Schoenfelder believes work context is not only measurable through analytics but that it “significantly impacts organizational behavior and performance.” That is, failing to properly map people to company culture affects not just a particular function but the entire organization.