Why invest in human capital management
Human capital management is an integral part of a company’s culture and a responsibility of all leaders within the organization—not only human resources managers—to create, nurture, develop, and consistently convey that culture in day-to-day operations, as a way of working and behaving, using all available tools.
It represents a set of organizational activities that include recruitment, retention, management, development, and employee well-being, with the aim of increasing employee engagement and, consequently, increasing the overall value of the company.
Human capital management goes beyond being just a human resources function. However, the focus here is not on defining the differences, but rather on why we should invest in human capital management and what more can be done in this area.
By investing in the development of human capital, companies can improve their financial performance, increase employee engagement and satisfaction, and achieve lower employee turnover, resulting in a more stable workforce.
Below are some of the key values and benefits companies gain, viewed through the perspective of globally renowned consulting firms.
A McKinsey report showed that companies that prioritize talent management and invest in employee development outperform their competitors in several ways.
They achieve stronger financial performance, measured through total shareholder returns. They also report higher levels of employee satisfaction, which correlates with lower employee turnover rates, thereby reducing recruitment and training costs within the organization.
Employee development also contributes to higher levels of innovation and creativity.
A Deloitte study found that companies emphasizing employee development are twice as likely to be innovative and agile compared to those that do not invest in employee development.
Of particular importance today—and even more so in the future—is positioning and branding the company as an employer of choice, closely linked to the overall employer branding process, viewed through the lens of employee experience.
To summarize the benefits:
- Improved financial performance
- Higher levels of employee engagement
- Reduced employee turnover
- Lower recruitment and training costs
- Increased innovation and creativity
- Enhanced company image as a place to work (Great Place to Work)
These are more than sufficient reasons to invest time and resources in activities related to human capital management within the organization.
It is no coincidence that we are deeply committed to this topic in our daily work. Few may know that the inspiration behind our name, Thrivity, comes from the word thrive—which in English means to grow vigorously, to flourish, to progress toward and achieve one’s goals despite all circumstances.
With this purpose in mind, we have developed a training program consisting of six interactive modules, through which participants will acquire human capital management skills, learn how to apply them in practice, and become advocates and inspirations for human capital management within their organizations.
The program will take place during October–December 2023, and more information is available at the following link.
Let us work together to nurture a culture of human capital management and make our organizations attractive workplaces—places people want to join and choose to stay.
This activity is co-financed by the Swiss Government through the Increasing Market Employability Program (IME) and Thrivity.
