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Human capital more than just a job
September 27th, 2008
The onset of the new economy has been progressively obliterating the bureaucracy and limitations of traditional jobs. Human capital means talents and abilities, not just someone doing some mindless 9 to 5 job like a robot.
People are hired on a value basis. Just being an administrator or an accountant is no longer any sort of definition of the actual work. Employees are now hired as one of several possible assets:
- Money Maker
- Money Savers
- Good judges with expertise
- Good analysts
This is a long way removed from the old purely cost/job valuation. Employees are now being actively checked for their talents, not just the ability to do a job. It was an inevitable result of the previous labor-intensive approach, which was routinely made hopelessly ineffective by bad job design.
If you’ve been through a few restructures, you’ll know how bad some of those structures were. The theory was that a certain value of business, done at a given cost, created margins. In practice, the cost of doing business blew out regularly, as technology and rising demand increased volumes of work, and the various job designs became obsolete, in some cases before they were even implemented.
Nobody admitted it at the time, but the fact was most administrative systems hit saturation point very quickly, and actually cost money to run. All that downsizing was a reflection, in part, of how hopelessly out of step business administration had become.
Now, having more or less solved the problem of methods, profitable business is being seen as a result of better methods, and above all, better ideas. That lesson took a long time, and a lot of suffering, to learn. The only good thing to be said about it is that it has opened the way for a saner, and far more realistic and efficient, approach to hiring people.
For job seekers, this has had the very major benefit of creating a lot of opportunities. The new approach to hiring makes career paths much more open to development. Instead of a simple progression, it’s now possible for people to truly develop their careers rapidly, and do it in a highly diversified way.
The four categories tell the story:
Money Makers
Some people have real talent as creators of wealth and profits. These are the ideas people, either creating new concepts, or developing them in the market. They’re quite invaluable to employers, for obvious reasons.
They’re also very well placed in the new economy. Commercial ideas are the basis of the entire global economy. It is possible to create a truly brilliant career in any industry. Some of these people are excellent problem solvers, other can produce whole new concepts. In an ultra competitive marketplace, ideas are a commodity in their own right.
Money Savers
Also very much in demand are those with the skills to reduce costs. This is a very demanding art, these days. In the past, slash and burn downsizing saved money, but incurred a terrible cost in loss of skills and experience. It’s only after the carnage of the outsourcing and downsizing excesses around the world that employers have learned what loss of human capital really means. It was an expensive lesson.
Money savers are true economists. They increase efficiency, without losing capacity to produce. They’re one of the forces working to reduce internal business bureaucracy, which is now seen as a true obstacle to modern commerce. They’ve founded a whole new approach to business, using realistic approaches to business needs without sacrificing performance.
Good judges with expertise
Judgment is a gift. The ability to correctly judge a situation is one of the great talents of management. It makes or breaks businesses. There are some people whose personal talents are such that they can be not only experts in their fields, but reliable predictors of scenarios in business.
Any organization, and any business, creates potentially dangerous, costly, situations for itself as it grows. Some businesses take on situations they can’t handle. Some make bad decisions based on faulty data. This is where the good judges come in, and in the extremely complex global market, their role is very much risk assessment.
They know their fields, they know their market, they usually know more about the industry than their employers. Many of them have wide ranging experience across their careers, and are much more familiar with the risks. They can be consultants, they can be project managers, but above all else they’re hired specifically for the human capital value of their personal skills.
Good analysts
The modern business generates and receives so much information that data overload and disinformation are common problems. Somebody has to get into the torrents of news, reports, spreadsheets, and other décor of management, and make sense of it.
Statistics can be useless, information can be highly misleading. In any business context, that’s dangerous. It’s unavoidable that business has to rely on data from its market. That information is critical. If the analysis is incorrect, or reading the signs is done badly, a lot of time and money can be wasted. A project can be an expensive disaster, a new product range or new financial package can be a total failure.
Analysts are really interpreters. They know how to assemble and correlate facts. They can access and verify information. Business analysts are the lucky souls that have to put what may well be a chaotic supply of information into a comprehensible state.
Good analysts are not merely good at their work; they turn the normal scrambled egg of data into meaningful information. This is a talent for bringing order out of chaos in its most literal sense. These people occur at various levels in any organization. They’re the human mainframes who can organize information into a working asset.
As a hiring criteria for human capital, good analysts are always in demand. They’re usually found in situational interviews which are often very much based on how people handle information. Businesses like good analysts, because it can save them a fortune in outsourcing. That lesson, at least, has been learned.
You can see where this approach to hiring is headed. Talent, for once, is getting recognition as a functional asset. It’s taken a long time, but if you’re a talented person, it’s likely to be worth the wait.
For job hunters, this could be the vindication of years of trying to find a job where skills are finally appreciated. Let’s hope so.
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