Quantifying human capital

"Human capital" should ultimately be reflected on the organisational balance sheet like any other asset. The problem with this concept is the dynamic nature of human capital. It has the ability to increase rapidly, therefore accelerating the organisational competence and value over night. Just as fast, it can leave at a month’s notice to move effortlessly to another organisation – often after the company has spent huge sums on the sourcing, development and maintenance of this human capital.

Often companies train for the sake of training with little or no focus on the objective of such training. Problem based learning suggests that material is developed by a process that starts with identifying frustrations within a department. The frustrations list is no more than a record of skills shortcomings that need to be addressed. The next step is to translate the frustrations into learning outcomes. We achieve this by engaging in a process of writing a learning outcome for every frustration. Every such learning outcome is developed to avoid the frustration in future. Where the learning outcomes and training cannot be developed to solve a frustration, referral should be made to the executive for managerial or strategic remedies.

Training should not only be focused on developing the skills of underperformers. It is equally important to nurture the top performers, because they are generally the organization’s most valuable human capital. Quality skills development that makes a measurable impact on the organization requires proper planning and preparation through a structured process of analysis, design, development, implementation and evaluation of quality and relevance.