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Leading a successful business means managing resources beyond money or property. In fact, arguably the most important asset to running a business is the people that keep it running— from your executive leadership to the customer support team.

This is what many refer to as human capital or human resources, although some may contend that these terms are outdated and commodify the value that people bring. Employees aren’t expenses, they’re assets that bring value to the company.

In today’s post, we will cover just how important human capital is, and the many ways you can improve or enhance your company’s human capital.

 

Company Culture

The top companies today are realizing the value of strong, collaborative company cultures. In a study by Randstad USA, 38% of workers want to leave their jobs due to toxic work culture, and 58% have left or are considering leaving because of negative office politics. Millennials and Gen Z workers are increasingly seeking out companies with positive company cultures. The global workforce is shifting towards working for companies that prioritize employee wellness over high pay.

But the effects of company culture go beyond making employees happy. Research from Deloitte shows that 94% of executives and 88% of employees believe distinct culture as important to the business’s success. For further proof, just take a quick look at Great Place to Work’s World Best Workplaces 2020. Each employer demonstrates that culture and productivity go hand in hand, with the best companies investing millions of dollars in engaging employees through strong mission statements and values.

If you seek to make a workplace that values growth, wellness, and collaboration, it has to start with the company culture. Which values are most important to your company? What is the company doing to ensure these values are upheld? How does it practice these values daily? The answer to these questions will only come through deep introspection and conversations with other team members.

 

Employee Engagement and Satisfaction

Keep your employees happy and engaged, and they’ll reward you with their tenacity. This is backed up by a study conducted by Gallup, which found that highly engaged business units result in 21% greater profitability. Engaged employees tend to be more present, make fewer mistakes, and accomplish work more efficiently compared to their counterparts struggling to find meaning in their work.

Speaking of those counterparts, employees that are not engaged are also more likely to leave. The same study found that highly engaged business units resulted in a 24% less turnover and a 41% reduction in absenteeism. Since the employees’ needs and wants are being met, they do not feel the need to search for it through other companies or job opportunities. In turn, this can also drive down numerous turnover expenses, such as hiring and training new employees.

While the elite companies make a habit of creating workspaces with arcades or caterers, it doesn’t take much to get started in engaging employees. Focusing on a clean environment can be one starting point. Reducing light and noise pollution can do wonders for a more productive mindset, as will significant investment in equipment and software.

 

Employee Skills

Each employee must have the necessary skills and experience to perform their work at a reasonably efficient level. For product managers, that may require learning about the various stages of their product development pipeline. For a programmer, that might mean learning multiple programming languages or using different software applications.

Identify the ideal candidates for a position straight from the hiring and recruitment process. Rather than focusing on applicants with a high GPA or several degrees, focus on their skills and experience. What real-life work experience have they been exposed to? What technical skills have they learned, and how? These questions will yield stronger candidates for the position and will avoid the necessity of additional training.

Learning strategy and design consultant Julie Dirksen once said, “Learning experiences are like journeys. The journey starts where the learning is now and ends where the learner is more successful. The end of the journey isn’t knowing more, it’s doing more.”

 

Employee Training

Companies must empower human resources management to train and develop employee skills. Some of these skills must be taught, such as the assembly of a car or the construction of a house. But other skills can only be learned through experience, like the responsibilities of leadership, or the elements of teamwork.

Mentor programs, workshops, paid training programs are just a few examples of skills development initiatives. Better training leads to greater employee efficiency and reduced mistakes in the pipeline. For the writers and designers in a company, training can help breed and inspire creativity.

Consider how Pixar, the animation studio behind Toy Story and The Incredibles, developed its own interactive training program, Pixar University. Each week, there are 14 social and interactive classes that anyone can take, from fine arts to improvisation, or as former Dean Randy Nelson puts it, “whatever it is that helps all of the people at Pixar understand each other better and communicate better.” Employees are even encouraged to skip work to take one of these classes.

Be sure to read our article on Free Online Classes You Should Take in 2020.

While it is important to remember people as assets, it’s even more important to remember them as human beings— with their own daily schedules, families, responsibilities, pain points, and desires. Learning and understanding these qualities can help companies better serve their workforce, and in turn, build a more positive reality around their visions.