For 30 years, my clients have been board directors, CEOs and CFOs and I have had plenty of time to observe these smart people ignore the impact of human capital. After many years of conversations, I’ve concluded that there are two fundamental reasons why they ignore human capital:
- HR is “messy” and non-HR professionals don’t want to – and more likely don’t even know how to – deal with the “soft” issues of individuals;
- HR has its own language that is utterly foreign to most financial people
I’ve created HCMoneyball to address these two issues – CFOs can measure and track the impact of human capital on business outcomes – in a language they understand – ratios and factors. By calculating the collective impact of Human Capital, we can see how the system of people contributes to or detracts from operating efficiencies – a departure from having to understand people at the individual level. Our software creates the types of human capital metrics (ROHC, Income Ratio, Revenue Ratio, etc.) that are easy to compare to standard financial measures – ROE, ROS, ROI, Quick Ratio, Inventory Turn Ratio. And more exciting is that they can benchmark their human capital ratios to a set of competitors through HCMoneyball’s benchmarking feature.
By translating Human Capital trends into a financial language, decision-makers can enhance their ability to optimize the return on investment, create economic value for stakeholders, and understand their competitive position against the market.
My aspiration is that information about Human Capital be used consistently as an integral part of the decision-making matrix – at the board level, C-suite level and eventually by every manager in the organization.
We look forward to showing you how!