developing human capital

"The most valuable of all capital is that invested in human beings."
Alfred Marshall, Principles of Economic

There are many ways a company can invest its capital: land, equipment, research, development and more. Your organization can go the “cause route” by investing in charitable efforts to promote your social consciousness. Yet one investment is more foundational than all of these, which is the investment in developing the people in your organization. While this investment may seem to be a given, recent trends have resulted in many organizations reducing their human capital investment percentages, trading them for perks and bonuses to the employee. While these are not bad, when they take away from an organization’s ability to increase the potential of its employees, these perks (like a new office chair, expanded food services, and other short-term investments) are actually robbing the individual and the organization.

Investment in the growth of the individual does not expire, unlike the office chairs, which will go out of style or trends in office design (remember cubicles or even themed breakout areas, anyone?). When you build the person, they carry that investment with them the rest of their lives.

One national training organization writes:

Providing opportunities for growth and advancement to associates through education and improvement programs. Investing in human capital is investing in the skills and capabilities of your human assets - whether that consists of front-line staff, sales representatives, managers, supervisors or any associate; organization-wide.

Studies also show that investing in human capital creates employees who not only provide higher productivity outputs but also remain more loyal to the company. This takes the concept of job satisfaction to the next level. Employee engagement has a much more profound impact on employee loyalty to the organization.

Institute of Employment Studies gives a clear insight that employee engagement is the result of a two-way relationship between employer and employee pointing out that there are things to be done by both sides. Furthermore, Fernandez (2007) shows the distinction between job satisfaction, the well-known construct in management, and engagement contending that employee satisfaction is not the same as employee engagement, and since managers can not rely on employee satisfaction to help retain the best and the brightest, employee engagement becomes a critical concept. Other researchers take job satisfaction as a part of engagement, but it can merely reflect a superficial, transactional relationship that is only as good as the organization’s last round of perks and bonuses. Engagement is about passion and commitment - the willingness to invest oneself and expand one’s discretionary effort to help the employer succeed, which is beyond simple satisfaction with the employment arrangement or basic loyalty to the employer (BlessingWhite, 2008; Erickson, 2005; Macey and Schnieder, 2008). Therefore, the full engagement equation is obtained by aligning maximum job satisfaction and maximum job contribution. Stephen Young, the executive director of Towers Perrin, also distinguishes between job satisfaction and engagement contending that only engagement (not satisfaction) is the strongest predictor of organizational performance (Human Resources, 2007).

Investments in human capital build engagement, bringing out the most committed, talented people within the organization. It is these team members who will bring an organization to its fullest potential.

As a long-term strategy, every organization should actually be looking to increase this investment in training and development. These increases should be seen practically in HR budgets and on employees’ calendars.

Here are a few examples of companies making the commitment to invest and develop their human capital – talent and influence:

  • Intuit - a Fortune 1000 Company and a 100 Best Company - to become more globalized, training efforts concentrated on teaching employees best practices for managing workers on a global scale.
  • Hyatt - a Fortune 100 Best Places to Work and top 1000 Company - empathic listening is at the heart of the learning culture.  Hyatt created the “Changing the Conversation” training initiative to offer every day opportunities for professional growth. Hyatt’s average tenure of hotels housekeepers is more than 12 years compared to the national average of 3.8 years for all workers in the accommodations industry.
  • Whole Foods - a Fortune 100 Best Places to Work and top 1000 Company - puts its development dollars into building their leadership pipeline. Their Academy for Conscious Leadership is a four-day immersion course offering interactive presentations by both internal and external thought leaders. The aim is to challenge the perspectives of leaders, creating a new breed of intentional leaders.
  • Grant Thornton - an international audit, tax and advisory firm. Its partners go through a leadership program that focuses on soft skills of problem-solving, relationship-building and strategic communications, among others. As Grant Thornton’s Chief Learning Officer Mark Stutman explained in an interview with Training Magazine, "Developing and learning doesn’t stop simply because you’ve gotten to the partner level."

One such HR investment is in increasing each employee’s ability to influence others. Influence is the foundational leadership trait. Without influence, your organization will not be able to achieve its vision or accomplish its cause. Why? Because an organization’s ability to influence is a composite that directly correlates to how well its individual members are able to influence others. 

We developed the Keller Influence Indicator® as a human capital investment tool, allowing organizations to grow each individual’s influence potential as they work with them to develop their Seven Influence Traits®. This, in turn, increases the organizational ability to influence. This tool was pioneered with the Clemson University’s Graduate School of Business, and it is the first of its kind, a research-based assessment centered on influence.  We are currently seeing businesses investing in their employees by utilizing the KII® as an ongoing, objective, dynamic measurement of how well their training and development programs are performing. This allows organizations to determine the ROI of the personal growth their programs achieve in the lives of the individual.


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From regional manager to international executive with quadruple the pay, Karen Keller’s unique blueprint carefully outlined the step-by-step process for creating high-impact influence and let me know when I was being influenced in a way that didn’t serve me.
Lloyd Moore
Global Director Supplier Quality & Development - Lear Corporation – South Carolina