As companies get leaner in this tough economy, managing human capital based on the company’s core competency helps businesses prosper and avoid costly mistakes. Already companies are narrowing in on their strengths and spinning off tangential divisions.
When human resources identify the knowledge and talent base essential to support and grow the core competencies, they add value to the company and ensure the most important people are nurtured and groomed. Managing human capital is best served by first understanding the skills and knowledge needed for each job and how that job promotes the core competencies of the business. It is immediately followed by a strong set of employee retention tactics to assure that employees are in the right job at the right time with the right skills.
It may involve creating a standard language for the skills, keeping skill information up to date, and creating a system for workers to document and upgrade their skills.
However that effort rewards HR with great benefits as they manage their human capital. When core competencies are the focus of all personnel management, businesses have a better understanding of the value each employee brings.
- Benefit #1. HR can find the best place for the worker and his or her knowledge. They can strategically place each employee into a position that will strengthen the company’s core products.
- Benefit #2. HR can better train from within. They see the needs of the business with more clarity and so can find workers that could fit into a position with just a little more training. This saves them the time and effort of recruiting human capital from outside and having the new employee adjust to the company.
- Benefit #3. Managing human capital better. When cutbacks come, the company can manage their human capital more effectively, eliminating only those jobs that will not impact the core products.
- Benefit #4. As HR designs their training programs, they already have an understanding of their employee skills and the skills necessary to grow their core business. So they know exactly the kind of training they must create to close the skill gaps.
- Benefit #5. HR can also increase their success in hiring new people when they better understand the skills and knowledge gaps in reference to the core competencies. Then they know specifically what they need in their new hires.
- Benefit #6. Work performance appraisals can be adjusted with core competencies in mind. Then both worker and boss understand where workers need to grow and improve so they can be vital employees. >
- Benefit #7. Retaining valuable talent. Many employees leave companies because they feel underutilized. HR can better manage their human capital when they know the worker’s job skills and fully utilize them. Employees feel more fulfilled and stay with the company.
- Benefit #8. Workers can plan their careers more effectively when they have correct performance appraisals and accurate understanding of needed skills and knowledge. They know what they need to learn, and how that will help the company prosper. They feel more in control of their career path.
- Benefit #9. Create accurate pay incentives. With an alignment between core competencies and human capital management, businesses have a better understanding of which jobs to value – and thus pay—more highly. They can create a pay for skills salary system.
When both businesses and employees see workers as “a package of skills,” both of them can more easily recognize the value they offer their company. In the future, the best human capital management will help employees align their skills with the core competence of the company to gain long-term upward growth for both employees and the company.
Copyright ©2005-2017 Joel Garfinkle, All Rights Reserved.
Joel Garfinkle is recognized as one of the top 50 coaches in the U.S., and the author of 7 books, including Getting Ahead: Three Steps to Take Your Career to the Next Level. He has worked with many of the world's leading companies, including Google, Deloitte, Amazon, Ritz-Carlton, Gap, Cisco, Oracle, and many more. Visit Joel online at Garfinkle Executive Coaching. Subscribe to his Fulfillment@Work Newsletter and receive the FREE e-book, 40 Proven Strategies to Get Promoted Now!
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