August 22, 2011

Prioritizing Human Capital, By James Kim

Prioritizing Human Capital

By James Kim

Despite the importance of the small business employee in a company and the American economy in general, the study and a strategic awareness of human capital has been neglected in many business services. However human capital management (HCM) should be a priority for companies. 


  • Build a presence: Create a website that communicates company goals and ideals and always update your website’s content. The first place a prospective employee is going to look when applying is your website. 
  • Public arenas: Job fairs could be a great place to rally up ambitious prospective employees. Through such venues you can meet these prospective employees in- person, allowing you to better gauge whether a particular individual is a perfect fit for the position.
  • Social media: Social networking sites can be useful if you’re target age is twenties and entering job market. However, again, you need to update your sites frequently, which can be cumbersome.
  • Incentivization: Sign- on bonuses are a popular way to hook an employee. Of course, you need to ensure that this employee stays in your company so a contract outlining the terms of the bonus, such as a requirement to carry on business for a certain amount of time, may be necessary.


  • Make sure to assign employees tasks that they genuinely enjoy
  • Encourage employees to take their vacation time to avoid “burning out”: The average employed American worker received “18 vacation days last year, but only used 14 of those desirable days off,” according to a 2010 survey by Always encourage your employees to take time off so that they can return to work refreshed and relaxed, rather than frustrated and stressed.
  • Bonuses, professional development, salary increases also help keep employees interested (although you should not raise salaries simply because you want to retain people – –  this can result in a discriminatory employment suit – –  U.S. Equal Employment Opportunity Commission for information about the Equal Pay Act of 1963 and the Lilly Ledbetter Fair Pay Act of 2009).

Talent Optimization

Global Novations created a “Four Stagesof Contribution Model,” pioneered by former Harvard Business School professors Gene Dalton and Paul Thompson, that explains the stages of talent optimization:

  1. contributing dependently
  2. contributing independently
  3. contributing through others
  4. contributing strategically


Stage one has the lowest value, while stage four has the highest. In this model the employee works their way into a position of critical contribution, mentoring other employees, leading the team, solving problems, and, eventually, becoming an internal entrepreneur and idea innovator for the company.  You will find that employees feel that they are contributing most when they understand the mission, vision and core values of the company – so makes sure that these are well socialized, encouraged and the appropriate behavior is rewarded.

In every stage of HCM, recruitment, retention, and optimization, the company owner should test the guiding principles of his/her business, especially in the beginning stages of company development. In time, they will find the best way to optimize their human capital in a way that suits their particular business practices and culture. 


About the author:

James Kim is a writer for ChooseWhat is a company that provides product reviews and test data for business services and products.



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