Are we looking at business backward? Success is driven and measured in financial terms, but people are the heart of business. People matter most, and paradigms are changing to reflect that. New business traditions are emerging that value human factors side-by-side with financial ones. Employee satisfaction is as important as profitability.
How can success be viewed in terms of human capital rather than financial capital? Harvard Business Review poses some intriguing questions, and offers illuminating insight, in a new article on talent management.
The Cost of Money, the Cost of People
The real cost of money is near zero in today’s business climate, according to HBR. Interest rates and inflation are in balance. Capital is plentiful and cheap, comparatively speaking.
Talent, by contrast, has a very different cost basis. This is not meant in financial terms like salary or recruiting costs, but in terms of human value. It can be understood by looking at what a person is worth to your organization, what the impact might be if you lost half of your best people, and what the impact might be if you could swap out some of your sluggish performers and replace them with star talent.
“The business press refers to a ‘war’ for talent,” HBR says. Human capital is precious. Cultivating, attracting and retaining good people means more than quantifying the value of employees; it means building relationships and putting people first.
For business leadership, the questions are changing. Placing greater value on human capital is directly related to business growth, customer satisfaction and financial performance. Here are some questions that are popping up:
Are our employees inspired?
Who are our difference makers?
What sets them apart in our organization?
How can we empower others to become difference makers, and to be inspired?
Inspired employees and difference makers comprise only a small part of the average company – 12 to 15%. Other companies, however – those that make employee satisfaction a priority – have a lot more of those inspired difference makers that move business forward.