Investing in your workers is always cheaper than training their replacement.
John Boitnott, VIP Contributor to Entrepreneur, Journalist, Digital Media Consultant and Investor
"Human capital development" has definitely achieved buzzword status. As a phrase, it’s ubiquitous in the entrepreneurship and business-oriented press. You can even study it through a certification program at an Ivy League university.
But what, exactly, is human capital development? More importantly, why is it so important for business success, and how does a small business owner go about actually investing in it the right way? Sure, it might make sound financial sense -- and constitute a relative drop in the budget bucket -- for a large company. But, does it even make sense for smaller businesses, with smaller budgets that may already be stretched thin?.
Use the following five-step program to create your company’s best human capital development strategy and tactics.
1. Understand what human capital development is all about.
First and foremost, let’s get clear on what human capital development is all about. At its simplest level, human capital is a way to quantify the economic value of a specific employee’s set of skills.
Like all forms of capital, human capital is an essential component of your company’s long-term assets. The collective profile of skills for all your employees ideally meets your company’s needs, but more importantly, it also adds to your company’s intrinsic value.
Developing that capital -- that is, investing in the further enhancement of those skills in a way that adds to that value -- is a smart financial investment in your own company. It’s also a way to increase employee satisfaction and engagement levels. Put simply, when employees feel that management understands and appreciates their value, they’re likelier to stay with the company, further enhancing the company’s value. Read More...