Human capital is possibly the most vital, yet overlooked, means of establishing competitive advantage for companies today, and the need for better ways to encourage innovation.

Our means of measuring the management of talent and, more importantly, empirically demonstrating its impact continue tend to lag behind.

This report provides powerful insight into the current use of human capital measures (HCMs), and highlights case.

The value of human capital is gaining greater attention and that the management of talent is becoming more aligned with the operation of businesses.

But this research by The Conference Board also reveals some continuing challenges.

While more than half of the participants used HCMs to evaluate and reward their managers, fewer than 20 percent of them actually provided these measures to managers at all levels of the organisation. This raises the question o whether managers can—or should be—held accountable for targets that have little or no visibility.

While it is encouraging to see that HCMs are being used in establishing performance goals for companies, it isn’t clear whether these are linked to meaningful financial or operational performance goals of the company or are simply being used to evaluate how efficiently the human resources function is managing itself. Since more than half of the respondents indicated that their human resources department played “no role at all” in developing their company’s strategies, it stands to reason that these advances in the use of HCMs are less focused on business strategies and more on department efficiencies.

This study represents a turning point for the human resources function in demonstrating the importance of human capital and its recommendations for human resources practitioners to:

  • move beyond the efficient use of human capital and begin to demonstrate how it empirically drives organisational performance;
  • prepare both themselves as human resources practitioners and the human resources field in general to move beyond understanding the importance of “being at the table” and begin developing the tools and competencies that will help lead the conversation once human resources “gets its seat”; and
  • set the groundwork for moving the management of human capital beyond being “aligned” with a company’s strategies and to begin to learn (and then teach) how human capital can be powerfully “integrated” into those strategies.

 

Download: Strategic Human Capital Measures