The Rise of Human Capital: How to Refocus on Your Organization’s Biggest Assets

Written by Michael Riall

November 2, 2021

With the rise of technology organizations have been replacing, refining, and improving operational processes for decades now. Businesses have evolved and adapted at a somewhat steady pace until the past few years—where crisis has provoked a rapid acceleration in the pace of change.

Most organizations, regardless of their size, are now facing increased difficulty in filling roles. Why?

Somewhere along the way a lot of them missed the small print. Organizations that want to stay competitive, or even operational, not only need to focus on staying technologically relevant—but the people with the skills to make their business sustainable and successful as well.

Physical Capital vs. Human Capital

The slow and steady shift by organizations from physical assets to technology isn’t new. Covid took this to another level:

  • The sudden rise in remote work has had a wide-reaching and long-lasting impact on the real estate market.
  • Companies have leaned into the push to do more with less by replacing equipment, updating processes, and consolidating positions out of necessity.
  • Widespread automation and AI have ushered in a new era of consumer self-reliance.

Therefore, businesses are now heavily dependent on technological resources, and by association, human capital.

The Problem

The issue we’re seeing here is that many organizations have yet to catch up with what this shift has meant for their employees.

While employees themselves have had to deal with a change in work and life demands due to heavier reliance on technology, as well as societal changes impacting their work-life, organizations have lagged behind—despite personally experiencing these changes as well.

Large scale change is difficult, but the old school idea that most workers are replaceable and faith should be placed solely into traditional areas of investment has led to things such as:

  • Mass unemployment issues.
  • A struggle to fill skill gaps and competition for resources—which has resulted in increased labor costs.
  • Difficulty finding sustainable business and growth models.
  • Unprecedented strain on employees, including a rise in mental health issues.

Crisis has amplified this. While employees now more than ever have redefined life priorities, seeking jobs that work around their life, organizations are facing the need to ask employees to do even more with less.

Areas of Alignment

Both parties are seeking change, and technology can help with that. For years the trend and desires of the millennial workforce have been reported on, with flexible work schedules, learning on the job, and mentorship consistently ranking high on the list.

  • Whether it’s via part-time or temporary technologically skilled workers; or offering employees the chance to learn the skills they want to learn and your organization needs.
    • Filling skill gaps can be done in a way that makes economic sense and fosters employee wellness and retention.
  • Remote work is easier than ever, which has made flexible scheduling easier as well;
    • And if remote work isn’t possible for your business, opening the door for suggestions can ensure you’re getting better productivity instead of a set number of hours.
  • Skill transfer, better communication and insight into your business, as well as increased collaboration are all benefits related to mentorship that help all parties involved.

Where Else to Focus

  • Focus on making changes in the right way.
  • Focus on learning what’s changed and what successful organizations are doing right.
  • Focus on setting up your leadership, teams, and employees for long term success—in a way that is sustainable, and in a way that works for them.
  • Focus on getting your organizational culture right and growing from there.
  • Focus on your people; making sure the right people are in the right roles, and doing the right things for your business.

If your organization is dealing with change, needs help finding the right resources, or could use advice on how to refocus on your people—contact us.