Human capital is the economic value that an employee or employees bring to an organisation through knowledge, skills, and abilities. It’s thought that total human capital costs are almost 70 percent of a company’s operating expenses. Many companies do not adequately invest in employee training and development. To gain the most benefits from employees, your business should be investing in the entire team. Here’s why you need to invest in human capital development in 2018.
Develop employee engagement
Employees who are engaged are much more productive. Furthermore, they are more loyal to a company. Many surveys have found that employees don’t feel engaged at work. Investing a little time and money in employee development can grow your employee engagement.
Human capital management, done well, allows for an enhanced flow of conversation throughout the organisation. Investing wisely can create better communication by improving the quality of the message. For example, if you invest in a mentorship program, you can create lines of communication between leaders and employees that never would exist without the program.
Increase employee satisfaction
Investing in training and development for your staff will lead to greater job satisfaction. Employees want to know there is a chance to progress, learn and develop. A commitment to professional development shows an employee that you trust, value and appreciate them.
You can opt for internal education or third-party options. Upskilled offer recognised online courses that are flexible. Being satisfied with your job means you are happy and work harder.
Higher retention rates
It’s understandable when workers say their career advancement opportunities are more important than salary when it comes to their job. Workers who are receiving professional education, training and development are less likely to seek a new job. If employees can advance within the company, they don’t need to explore the opportunity from elsewhere. Having people leave your business means you have to spend time and money looking for a new employee.
Reattaining employees is critical in today’s market. Like we mentioned before, keeping your good talent is hard, but finding it is harder. When good talent knows they have to opportunity to develop, learn and progress, they are attracted to a business. Offering development makes you an employer of choice. Having an approved human capital plan already in place can demonstrate your commitment to new staff.
Whether you know it or not, you are already investing in human capital. Staff salary, benefits, perks and more are all investments in human capital. It’s silly for a company to spend all this money and not spend that little extra for additionally employee development. For example, you wouldn’t spend lots of money on a prime-time TV ad slot, then refuse to spend money on creating a decent ad.
Spending that little bit extra will maximise the return on your human capital investment (salaries). Improving your employees will improve your bottom line.
Company Culture is key
Think about how vital company culture is. What if you could improve company culture and develop your staff at the same time. One of the best benefits of investing in human capital is enhancing your organisation culture. Culture depends on aspects of employee’s satisfaction, engagement, and communication. These things are all link to human capital development. A happy culture increases your employee’s productivity, and that improves your bottom line.
Human capital is considered one of the most important aspects of any business. Not investing correctly will hurt your company. Take the time to align your human resources management with the goals and objectives of the business. This will lead to your achieving those goals quicker than you ever imagined.