Tips on how to make use of ‘human capital’

Several reports have recently suggested that business confidence is continuing to remain high heading into 2013, but how can you turn that into increased profits?

HR Magazine reports that the Chartered Management Institute (CMI) and the Conference Board have together researched what firms need to do to improve their bottom line over the next 12 months, counting on the expertise of chief executive officers, chairmen and presidents of businesses in a series of questions.

And the CEO Challenge 2013 report shows that human capital provides the greatest leverage for companies looking to push on this year. But how can that affect your business?

Engagement

It’s become a bit of a buzzword in recent years, but engagement is one of the best ways to ensure workers and businesses are moving in the same direction. If a team does not “buy-in” to what you are doing, then it is more difficult for methods to be a success.

One way of getting a high level of engagement is to give people responsibility. If the onus is on members of staff to do certain tasks, they are more likely to get involved with problem solving. Furthermore, asking them for their opinions on certain subjects is also another method used to encourage further commitment to the job.

Incentives

Money talks – and it is no different when it comes to getting the most from your workers. That does not mean raising everyone’s basic salary, but when it comes to encouraging people to help deliver profit increases there is no better way than incentivising people financially. A small bonus scheme on a particular project could deliver stronger results.

Failing this, extra holiday days or a physical prize (a bottle of champagne, dinner for two) could also help you get the most out of the human resources you already have working for your firm.

Training

Other difficulties CEOs and other senior members of staff listed in the CEO Challenge 2013 study include nurturing and developing talent from within – and training is one method of improving this in your business. If you invest time in staff, they are likelier to invest more time in the company. In addition, it is much easier to develop somebody who has a strong knowledge of a business and how it works instead of recruiting from the outside.

HR Magazine also cites the report as showing that improving leadership should not be a top priority, with the focus to be placed on those in the production line.

Speaking about the findings, Petra Wilson, director of strategy and external affairs at CMI, told the news provider: “Faced by tough market conditions, it is encouraging to see employers focusing more on building their human capital. They are also right to seek to grow the talents of their employees at all levels in the organisation. However, the view of CEO’s that leadership development is a lower priority is of significant concern.

“There is a real risk that business leaders overlook one of the most critical aspects of the strategies they are trying to implement, which is the role of their managers. For example, the line manager relationship has been identified as the single most important factor in determining levels of employee engagement.”

Recruiting

If it becomes clear that more resources are needed, it would not be a bad time to turn to the jobs market. According to recruitment agency Reed, confidence is continuing to return to the market with 39 per cent of workers looking for a change of role over the next 12 months.

Indeed, the Reed 2013 Salary and Market Insight report showed that there has been a ten per cent increase in the number of job opportunities becoming available, compared to the same time last year.

Significantly, though, 61 per cent of firms said that they are worried about their better workers moving to another firm for a bigger opportunity in the future.

Because of this, now is the time to act on incentivising, training and engaging workers to ensure not only do they remain at your business, but they make it a success as well.