Today’s Business Investment in Human Capital. We all know companies need to hire people to keep moving forward. How extensive is that investment in human capital? Quite extensive, as it turns out. Companies in the manufacturing sector can expect their hiring to account for 20% of operating costs. In health care and education, that investment in human capital can be 50% of costs. Yet that investment can be precarious and expensive. Machinery or vehicles don’t decide to walk out one day for another company… but employees do. The cost to replace an employee may be 150% of their salary, all in, when you consider productivity loss, severance payouts and retraining replacements. We can say “good riddance” over and over again or we can put our egos in check and look at the root cause of keeping those employees as the high-performing assets we need them to be.
People: Our Most Important Asset? Companies like to say this, but do they mean it? Why is average turnover of employees around 15%? Why do organizations let such “important assets” just walk out the door… or be shown the door? We all know good people who we wish were performing better. Whether employees, family members, teammates or neighbors, we coach them, give them training, incent them and more. But sometimes performance doesn’t get any better.
The E-T Model for Human Performance. This book introduces a model that any manager, coach or even parent can follow to measurably improve the output of human enterprise. It espouses an adult covenant between the organization and the worker, one that sees a performer as neither a mere replaceable cog in the machine nor someone who’s every working minute needs to be filled with bliss and fulfillment. We need to strike a balance: workers seen as an investment with a return we can realize by understanding what they need in order to perform optimally… by understanding why doers do.