6 Tips for Better Human Capital Management

Human Capital Management is essential to any organization's success. Here are some simple and measurable tips to optimize it!

Human capital

Catherine Dulude

Corporate Coach and Business Happiness Consultant

Tuesday, January 06, 2015


The notion of human capital, as well as measuring it, is becoming more and more popular.

According to Maslow’s theory and his hierarchy of needs, we can only aspire to fully reach self-actualization if certain needs are met beforehand:

  • The need for esteem (self-esteem and self-respect, recognition and appreciation from others)
  • The need for belonging (team and common goals)
  • The need for safety

These needs also apply to your human management strategy! Here are a few useful tips to help you achieve better human capital management.

First of all, a few definitions…

What is human capital?

Human capital is the entirety of talents, qualifications, skills, and accumulated experience that partly determine a person’s ability to work or produce something for themselves or others. In other words, human capital refers to economic activity.

The notion of capital, and hence of human capital, opens the door to other concepts such as measuring human capital, return on investment, and the development of capital.

Whether we are for or against the idea of capitalizing on employees, let’s adopt a positive outlook by telling ourselves that it’s about time we focus on our employees when talking about company performance!

What about human capital management?

It is traditionally known as human resources managements – or HRM – which consists of the grouping of the different strategies needed to properly develop your personnel and understand their worth. To put it simply, it’s using all the means at your disposal to get the most out of your employees.

A few tips for better human capital management

1- The right person in the right place!

There is no such thing as a good or bad employee, but there is such a thing as a right employee, for the right position, in the right organization.

You found that one-in-a-million? Congratulations!

However if that “one” is not in the right position, the whole concept of a one-in-a-million employee is pointless.

Employees can only render successful job performance if they have the skills and the motivation needed to fulfill all their functions.

Therefore, using a tool to assess motivation and innate skills is a good starting point in ensuring that the right candidate is in the right position.

Is measuring important to you? Then use a reference model which will provide you with an individual’s success indicator for a specific position in YOUR organization.

2- People leave bosses, not their employers!

Not only have you found that one-in-a-million, but you also found the perfect position for that person? Once again, congratulations! Unfortunately, there is now another big thing you need to consider: their boss!

Employees don’t leave their employer simply because they are offered better working conditions elsewhere; they usually leave their manager.

According to Roger Hermen, the “Father of Employee Retention”, 75% of people who willingly quit their jobs aren’t really quitting their jobs; they’re quitting their bosses.

So you have two options:

3- Coaching, Coaching, Coaching

The learning process has no end, and there is always room for improvement!

Train your managers to become better coaches so that they can help their employees discover and develop their full potential, and to be able to give clear instructions, encourage good behaviour, share their knowledge, give constructive feedback, focus on solutions instead of problems, develop trust, etc.

4- The team’s place in human capital management?

A recap: the right person, in the right position, and the right manager.

But there is still one important aspect that’s missing: the team!

An employee’s fit with the team is just as important because it’s through teamwork that we maximize performance.  And we all know that human capital management is ensuring the use of every possible mean to get the best out of employees, as well as considering an individual’s fit with his/her team.

By fit, we aren’t trying to imply that all individuals within a team must resemble one another. Quite the contrary: you need to embrace complementarity rather than similarity.

Managing a team is mostly the responsibility of its manager. That being said, if human resources wish to maximize their company’s human capital and be sure to recruit and develop the right people for the right positions, they have a vested interest in helping managers learn how to better manage their teams.

How? Through training, coaching, and skill development.

But you can also help your managers to:

  1. Better understand their teams and build upon its members’ strengths.
  2. Unite the members of a team and motivate them to achieve common goals.

5- I trust you, and you trust me!

How can we expect to get the most out of our employees and ensure optimal human capital management without mutual trust and transparency? It’s simply impossible! Those who sow trust and transparency reap it in return. You can’t trust your employees? Then don’t expect them to trust you!

You want to get the most out of your employees? Well, you need to understand that they will only show their true colours once they feel safe, and know that they will be accepted for who they really are.

We all spend a considerable amount of energy trying to present ourselves at our best and trying to hide what we believe are our faults. All that wasted energy is not only counter-productive, but it also hinders individuals from giving their best.

You want to get the most out of your employees: give them the chance, through trust and safety, to be themselves and to reach their full potential!

6- All that for what purpose?

“Sure, I want to give my best, but it is completely pointless if I don’t know what is expected of me.”

Unclear objectives render unclear results! All managers need to clearly express their expectations to employees so that employees know what is expected of them.

A company as a whole also needs to have a clear goal and vision. We all want to give our best towards achieving something bigger than us, and we all want to feel involved in our company’s mission.

Therefore, involve your employees in the achievement of this bigger “something”, encourage them to participate in important decisions, and celebrate victories with them. Only then will you reap the benefits of better human capital management!

So, to ensure better human capital management, and to get the best out of our employees, we need to make sure we have the right person in the right position. We also need to ensure the compatibility of employees with their managers and with their teams (need for belonging), to train managers to become better coaches, develop trust and transparency so we can offer employees the safety they need to be themselves (need for esteem and safety), and to present a global goal to motivate people to surpass themselves in order to achieve objectives (need for esteem).

Are you ready to optimize your human capital management?

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