The game has changed.
I’ve been a business leader for well over 20 years now. In that time, we’ve seen a lot of changes in the market and the business environment.
Effective leaders and companies adapt. Unfortunately, I’ve noticed a trend where some companies aren’t adapting fast enough to a key change. I’m talking about the emphasis on financial capital over people capital.
What Used to Be Easy is Now Hard – and Vice Versa
When I started Qualigence in 1999, it was extremely hard to raise financial capital. Businesses had to go to great lengths to obtain financing through loans, investors, and so forth. It was our most precious resource, and we led businesses accordingly.
Nowadays, it’s incredibly easy to raise capital. Financial capital is cheap and abundant.
But we’re in the opposite situation with human capital!
It used to be incredibly easy to hire the people we needed to excel and retain them for years. In 2022, that’s one of the biggest challenges businesses face – in virtually every industry.
Most business leaders today cut their teeth when financial capital was cheap and people were easy to hire. Regrettably, many of these leaders haven’t adjusted their mindset and strategy accordingly.
Companies Need to Raise Money AND People
The reality is that companies need to put the same emphasis on people as money.
In 2022, finding and retaining top talent is just as much a competitive advantage as funding – if not moreso.
Most leaders know this – but they’re still using the same recruiting, retention and engagement strategies from the 1990s!
Companies wonder why no one is applying for their positions – yet they still write mind-numbingly boring lists of responsibilities for their job descriptions.
They wonder why everyone is leaving their organization, even though they’re offering higher compensation – when we’ve known for years that money is rarely the #1 factor why people accept or leave a job.
If you look at how most organizations are responding the Great Resignation, they’re just throwing money at the problem. Very few companies are spending the time and resources to create real solutions to raise real PEOPLE capital.
How Businesses Can Better Raise People Capital
When we think about improving our ability to raise people capital, the first thing you think of may be improving recruiting.
Recruiting is important – but if you’re like most organizations and you’re struggling with turnover, that’s a challenge that needs to be addressed first. If you recruit more effectively but lose your people to turnover, you’re back to square one. That’s not building real people capital!
One of the most effective things businesses can do to boost retention is by working to understand what matters to their teams.
We’re all wired differently. We all want different things in the workplace. It’s a leaders responsibility to learn what makes each of their team members “tick.” They need to learn what their people LOVE about their jobs, what they can’t stand about them, and everything in between!
Leveraging One-on-One Conversations
It sounds simple, but at the end of the day this happens through one-on-ones between leaders and their teams.
Leaders can make a tremendous impact in terms of retention by learning what matters to their people – and adjusting how they lead accordingly.
One team member might want a different work-life blend and stay at your firm longer if you let them use flex time. Another team member might prefer working long hours and earning a promotion. But if you never had a conversation to find out which is which, you’d never know how to best lead each one!
This needs to be a collaboration between HR and leaders. Leaders must be the ones to hold the one-on-one conversations. However, HR must educate leaders on the benefits of holding these conversations, how to hold them effectively, and how to act on what they’ve learned.
Your People Are the Foundation of Your Success
At the end of the day, your success or failure comes down to your people capital. Great organizations win because they have the right people in the right roles at the right times. They’re effective because they’ve worked very intentionally to build winning teams…which never happens by accident!
If you’re in HR or leadership and want to guide your business to success, ask yourself: how can you build your people capital this year?