Human Capital Measurement and Management

"At the end of the day we bet on people, not strategies . strategies are easily copied . people are our only renewable resource . our real source of competitive advantage"

 -Larry Bossidy, CEO, Allied-Signal

For most companies, the workforce represents a large and visible expense. The workforce, however, is at the same time a substantial intangible asset and major source of value creation. Unfortunately, this asset - "Human Capital" - is poorly understood and not measured in most organizations.

Employees invest their time and energy, talent and know-how, creativity and productivity, and commitment and engagement to build their companies' Human Capital. In fact, many CEOs have concluded that "People are our most important asset and our most important investor". Management's fundamental challenge is to understand how to pull this Human Capital lever and to predict what happens when they do. To meet this challenge, companies need an integrated suite of credible, practical and dynamic measurement and diagnostic tools.

Human Capital Measurement provides the tools, including the required information and a decision-support framework, to answer key value optimization questions:

  • What Human Capital activities are important to the operating and financial performance of our business?
  • What is the value that specific investments in Human Capital programs and activities contribute to bottom-line results? For example, in areas such as rewards and recognition, benefits, training and development, and recruiting and staffing.
  • How can investments in Human Capital programs and activities be optimized to deliver a higher level of business performance?

We work with clients to assess their current organization capability for effective Human Capital Measurement and to chart a course for implementing a practical solution that will support better informed decisions regarding Human Capital programs and activities. Typically we:

  • Compare available data, system and process support, management process integration, and other requirements for migrating from the current situation to an appropriate Human Capital Measurement scheme.
  • Recommend a solution and implementation plan that identifies the costs and near- and long-term benefits for successfully designing, implementing, testing, and applying an appropriate toolkit.
  • Work with the client on change management issues that must be addressed for line managers and their HR partners to apply Human Capital Measurement tools and practices successfully.