Human Capital Management — The Key to Corporate Success

By Inga Wennik, Wennik & Motta

While news about "venture capital" may be grabbing today’s business page headlines, "human capital" — the knowledge, expertise, talent, and intelligence that employees bring to the job - remains a company's greatest asset. Likewise, "human capital management" has now become one of the foremost concerns of a company's overall operation, demanding a profound understanding of the changes taking place in the workplace.

Those companies who ably practice human capital management are doing more with fewer people. Increasingly, they are applying the "project team" approach, in which important tasks are handed to teams comprised of specialists. By assembling and assigning teams of experts, rather than going through the structured departments of yesterday, companies are finding that tasks are accomplished more quickly, and results are more advantageous.

If specialists — those with the experience and necessary skill sets for the specific job — are not available within the company, they are often recruited from outside. Placement agencies are hearing many more requests for interim, senior-level project specialists, and the better of those agencies are transforming themselves into "human capital management" companies.

Sometimes, employees or outsourced specialists may find themselves on several project-based teams at the same time. For instance, a marketing manager may find himself leading a product launch team consisting of communications, promotions and creative professionals while, simultaneously, he or she is playing a contributing role on a team conducting a customer satisfaction study. When the job is finished, the employees go back to their regular stations or are assembled into new teams to perform different tasks that can use their talent. The interim, contracted specialists go on to other projects at other companies, working as modern-day knights errant, ever-ready for new adventures and challenge.

The deployment or employment of human capital where it is most needed and most expedient at any given moment requires companies to think differently than they had in the past.

Fast-moving, task-oriented functional teams have in many cases replaced the slow process of departmental scheduling in the corporate world. Often being discarded are well-defined hierarchies and highly organized departmental structures where employees were rewarded not only for contribution but also — despite the best interests of the company - for time served.

All this has changed the culture of the workplace. Before, the employee guarded knowledge carefully from internal and external competitors and dispensed it only as it benefited his/her goals or that of his/her department. He/she concentrated on the present and trusted that his/her future would be taken care of by the company as long as he/she served the company well and played by the rules.

In today's workplace, where time-to-market has taken on dizzying speeds and where the ability to adjust to changing market conditions is paramount, companies no longer have the luxury of hierarchical structures. Instead, they must often deploy human capital where it is most needed and most expedient at any given moment. They find it more efficient to organize fast-moving, task-oriented functional teams as opposed to working through the slow process of departmental scheduling.

The contemporary employee understands this way of working and has made some fundamental adjustments. The new employee mindset is that of a free agent whose value is based on knowledge and the ability to provide leadership or contribute to a team. If this sounds to you like the qualities of a consultant, you’ve got the idea. Employees increasingly see themselves as consultants, and in this view, they can easily move from team to team or even from full-time employee to outside contractor.

Instead of being company focused, the contemporary employee is and must be job focused. The employee’s first concern is the successful and timely conclusion of the current project. As an expert member of the project team, the employee/consultant’s value to the company will be judged on how successfully the project is completed.

He or she knows that his/her value rests more than ever on the quality, consistency and visibility of performance. Thus, the contemporary employee strives to deepen his/her expertise and constantly seeks ways in which to distinguish himself/herself, embracing information exchanges and other opportunities for partnering and always striving to be at the forefront of new developments in his/her field.

The employee/consultant is now valuable "human capital," and it behooves the employer to manage that capital efficiently, and with foresight and discretion.

In order to secure the most value from the contemporary employee, it is imperative that the manager of this human capital be fully aware of the changes in the workplace and about conditions that truly matter to the contemporary employee. Management must be prepared to understand the employee's free-agent status and offer competitive compensation. Management must respect the fact that the employee's time is precious and adhere to dates and deadlines. It must set clear goals and standards and communicate the status and satisfaction level of the job at arranged checkpoints. And, the manager must understand and support the employee's need for constant improvement, freely offering mentoring, training, and advancement possibilities, as those are the factors that motivate the contemporary employee above all.

Today, competition for the best in human capital is fierce, and it is not likely to abate soon. Increasingly, traditional workers will adopt contemporary working conditions and practices and join the ranks of the employee/consultant. They will handle their careers and offerings in much more entrepreneurial ways, and companies will have to be resourceful in order to retain their services over periods of time.

Reputable placement agencies will emerge as "human capital consultants" to aid in the search for and management of external consultants and interim managers. Outsourcing of human capital will increase during the next decades, and with that will come a stabilization of the high salaries and fees we see now. Agencies will become even more valuable resources. They will build or gain access to vast, global, Internet-based databases of available talent and have instant access to talent information. They will develop universal standardized testing and evaluation tools, conduct background checks, collect financial and performance data, and create interactive, accurate and quick communications channels.

Human capital management is already becoming the business of business. As surely as venture capital makes a difference in the creation of companies today, human capital and human capital management, whether outsourced or handled in-house, will often be the big difference as to which companies develop to their full potential tomorrow.

Inga Wennik was the co-founder of Wennik & Motta, a placement agency that specializes in providing interim, senior – level project specialists and full-time professional candidates in advertising, marketing, marketing communications, graphics, and public relations.