Why Companies Can't Leverage Human Capital ?

Updated: Apr 11, 2019


With all the process improvements and Lean initiatives that companies have deployed over the last 20 years, the HR department has changed very little other than some new technology.  The processes associated with acquiring, managing, and reallocating human assets is still relatively unchanged over the last 40-50 years.  Using a resume to assess human potential is little better than reviewing one's grades and/or school to assess human intelligence.  The problem of unemployment has become an issue only in the last 18 months.  But, the problem of underemployment has been an issue almost since the start of the industrial age (where most of our management practices were born and are still deeply rooted).  It's curious why companies have invested so much money in finance and 3rd party assistance when planning and managing investments with money, but only relegate a bare minimum of talent to plan & manage investments in human capital.  (Cash & investment articles have never provided a greater return than human capital - try getting a financial instrument to produce an innovation).   We hear (all too often these days) about people getting rejected before they have even spoken with another person or worse when an under-qualified individual is making a decision based on their own perceived understanding of what outcomes the hiring manager is trying to achieve.


The entire process needs to be re-thought  if companies are going to get the most out of their human capital investments.  Perhaps if senior managers were held more accountable for the waste of human resources, the practice of hiring, managing, and "retiring" resources might change.   If senior management really believes that people are their most valuable assets, then why wouldn't they put the best talent they can find around the acquisition & retention of these assets ?  We're looking at the market recovery over the last few months and the economists are all saying that the recovery is underway.  Yet, consumer buying is still trending flat other than housing (which was picked up by gov't incentives for first time home buyers) and automobiles (which was also picked up by the gov't incentives).  Most of the "profits" and stock recovery was based on the release valve associated with staff reductions.   If we take away this "financial option" for senior management, we might see a very different approach for human capital management in the future.

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