Many
public companies are struggling with plummeting
stock prices, diminished sales and employee layoffs.
And a number of these businesses are feeling the
painful repercussions of decisions made during
the economic boom, when they exercised less than
stellar hiring practices to fill desperately needed
positions. As a result, hundreds of positions
and individuals are now considered expendable.
Consequently, these organizations are now altering
their view of their future strategic human capital
management plans.
According to a recent report published in March
2001 from the Boston-based Aberdeen Group, a leading
market analysis firm, the emerging human capital
management (HCM) market will grow from $120 million
in 2001 to reach $10 billion by 2004. The emerging
HCM marketplace includes services and technology
offerings in employment-related functions such
as strategic recruiting, deployment, compensation,
training, development and retention.
Why this predicted growth? While most businesses
plan for sales, marketing and overall expansion,
many typically fail to include a critical element
in their strategic plan-human capital management.
Human capital is the wealth of talent within the
workforce of an organization: past, present and
future. Effective HCM strategies focus on the
employee as a valuable asset to the organization.
Companies must understand the need to make sure
their employees feel valued and are challenged
on the job, while also recognising the value they
add to the bottom line. To be successful, businesses
must master every aspect of managing human capital.
According to Merrill Lynch, effective HCM will
be the single-most important point of differentiation
for businesses in the 21st century. In fact, more
than 70 percent of Fortune 100 CEOs now view human
capital as a strategic part of their businesses.
Without the right people to execute the business
plan, a company is heading for eventual failure.
One function of the company that has been underrepresented
in the executive suite is human resources. Today,
HR is considered merely a cost center--the party
planners and paper pushers of an organization.
But in the future, HR will be viewed as having
a significant role to play in boosting the bottom
line.
Is it time for the Chief Human Capital Officer
(CHCO)?
HR officers, in addition to their traditional
responsibilities, will find themselves concerned
with growing market share, improving customer
service and enhancing company image. Understanding
financial and business strategy issues, and forging
strong relationships with other senior executives,
will be essential to succeed in this elevated
role.
In 2002 we will see the start of many different
services and solutions offered by recruitment
and staffing firms, including smaller firms building
networks that will go on to win large outsourcing
contracts. This will allow more HR officers to
focus on strategic recruitment and human capital
management. It's an exciting time to be pioneering
new approaches and partnering with others.
Reg Athwal, Founder & Executive Director, HCM World, more of his work can be seen at www.ehcm.com and www.hcmindustry.com.
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