Unlocking the Power of Human Capital: Strategies for Harnessing the Potential of Your Team

by Fransic verso
Power of Human Capital

An organization is often only as good as the people in it. That’s why human capital management (HCM) is so important. It’s the department responsible for workforce acquisition, management, and optimization.

The notion of human capital as a source of competitive advantage is central to strategy and HRM literature. However, generating a competitive advantage from human capital resources takes time and effort.


The value of physical assets can be easily viewed on a balance sheet, but the value of an employee’s education, creativity, leadership skills, and experience are more challenging to quantify. These intangible qualities comprise a company’s human capital, and companies must focus on recruiting people with those abilities.

Recruiting the right people for your company can be challenging, especially when filling a position quickly. Finding and hiring candidates may take even longer when there’s a skills shortage.

This is why it’s essential to take the time to do your research and select applicants who will have the best chance of success in their new role. Consider implementing employee referral programs and conducting career fairs to attract quality candidates.

You’ll also want to ensure that your employees’ skills align with your business’s needs. It’s not uncommon for workers to be promoted or hired into roles that don’t align with their skills, leading to frustration, lack of productivity, and turnover.

To avoid this, you can implement training programs that allow your employees to grow with the company by learning new skills and gaining additional certifications. This helps ensure that your team is equipped to handle unforeseen challenges and future changes in the industry.


In the work context, human potential refers to the skills and abilities people bring to their jobs. This includes technical knowledge, problem-solving abilities, communication skills, and more.

It’s important to remember that this is not limited to formal education; instead, it entails the entirety of the individual’s life experience and unique perspectives.

One of the ways to maximize human potential is to promote and provide opportunities for professional development. This can be done by establishing an environment where open communication is the norm through team meetings, brainstorming sessions, and collaborative tools.

Another way is to offer short- and long-term career plans so employees can choose the path that best suits their interests and talents.

Training is efficient when it’s targeted to an organization’s specific needs. Some ways to do this are leveraging technology, redefining roles, and focusing on soft skills.

For example, many companies use new platforms like artificial intelligence to automate finding candidates for vacant positions. This helps to eliminate biases and focuses on assessing a candidate’s potential based on their competencies and strengths.

Unfortunately, human capital can depreciate over time. This can happen due to unemployment, mental decline, and inability to keep up with innovation. For this reason, it’s crucial to keep your company up-to-date on the latest technologies and trends.

Performance Management

Typically, when we think of capital in the business, it refers to monetary value, but human capital goes beyond that. It combines a worker’s skills, knowledge, and expertise.

It also includes their potential and innate abilities. This is why valuing your team and investing in their development is crucial for unlocking the power of your people.

A key is ensuring you provide ongoing constructive feedback to your employees. This allows you to manage performance effectively and to catch underperforming employees early on before their skills degrade.

Moreover, when you manage the performance of your people in an open, honest, and collaborative manner, your team will be more engaged in their work and more likely to succeed together.

Use training resources to foster a positive learning environment to facilitate employee development. This can include everything from formal courses and mentoring programs to self-directed learning tools and resources.

It’s also essential to provide your teams with short–, medium—, and long-term career plans to keep them motivated and focused on their goals.

Having managers who serve as front-line promoters of these resources and regularly schedule one-on-one meetings to curate their development plan can be very beneficial.

To maximize the power of your people, adopt a human capital management solution that enables you to streamline HR processes, align goals, and empower continuous learning.

For example, SAP SuccessFactors offers tools to cultivate high-performing individuals by boosting engagement and productivity.


When you think of capital, your mind may wander to the numbers easily computed for finance or accounting. However, it takes more work to determine the value of leadership skills, education, and past work experience. Yet, it’s also clear that these intangible qualities are critical to a company.

One reason is that they help create a positive culture of collaboration and innovation. Often, employees in the best positions can take the lead and initiate new projects to move the business closer to its goals.

Another way that human capital can improve a team’s morale is by encouraging personal and professional growth. 

A company that values its human capital will encourage the development and advancement of its employees, leading to a higher level of productivity, innovation, and performance.

The key is establishing an environment that fosters trust and psychological safety so team members feel comfortable discussing their ideas and providing feedback.

The most effective companies also provide ongoing learning opportunities for their employees through training courses related to the industry, allowing them to pursue side projects or pair them with other workers on project teams.

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