Why Great Businesses Get Better Results From Their People


                    Human Capital Strategy:

                  Why Great Businesses Get

             Better Results From Their People

By: Heather Martin



Great vision without great people is irrelevant.”

― Jim Collins, Author of Good to Great


There is a revolution occurring in the accounting field and the business mindset.  Traditionally employees have been viewed and recorded on the books as an Expense or Liability. But there is a new wave in thinking, being driven by industry professionals and articulated throughout business.  What is this revolutionary idea? That people are the largest driver of growth in business, and therefore they should be treated accordingly.


But the question is why should business people care? In their groundbreaking report entitled “Rebooting business: Valuing the human dimension,” the Chartered Global Management Accountant (CGMA) organization1 clearly outlines the critical importance of properly managing the human dimension of business to achieve long term results and success.


In summary, the CGMA study “surveyed 280 CEOs online from over 21 countries across the world to understand how they viewed current global challenges and what they saw as the priorities in leading their way through them. We followed this up with in-depth interviews with 17 CEOs, chairmen and other business leaders who between them are responsible for over 2.1 million jobs and market capitalization of $1trn. Their overwhelming response was that the human dimensions of business – for example, customer and supplier relationships, talent development as well as intellectual capital – will be the focus over the next 18-24 months.”2




The groundbreaking results of their study are that 68% of drivers of business success were non-financial.  That means that businesses are getting more value “from people rather than financial and physical assets. There is a clear need for companies to put more emphasis on demonstrating how the human dimension contributes value, given that the current reporting system doesn’t reflect such intangible assets fully.”3


The bottom line is, great companies get better results from their people because their workforce is more engaged relative to companies that don’t focus on their greatest asset . . . their people. According to a 2009 Gallup Poll “Companies in the top decile for employee engagement boosted earnings per share at nearly four times the rate of companies with lower scores.”4


In another report – the executive summary of the SHRM Winter 2012 Report – they clearly outline that “for the vast majority of companies, the ability to compete and win in the marketplace is contingent on the talent and performance of its workforce.”The report continues with a rebuke that “one of the most common misconceptions about employee recognition is that it’s a “warm and fuzzy” program without proven return on investment (ROI). However, as the survey results demonstrate, this is far from true.”5


A workforce that is not engaged can deplete morale, lower productivity, diminish the customer experience and cost the company a substantial amount of money. Twenty five percent of hiring managers say that the cost of a bad hire is more than $50,000!6 The recruiting time to find the right person, to train them and get them up to speed is alone a challenge.  But these are hard dollar costs that affect the bottom line!


The evidence is clear, metrics from multiple studies indicate that a human capital strategy is a key component of any company looking for long term success and growth.  So what does a human capital strategy entail? It involves a number of components including recruiting the right people from the beginning; incentivizing compensation to reward the behaviors you want to encourage; strategic, consistent performance reviews that focus on real, measured goals; as well as training and performance coaching.  Goals need to be set and clearly measured, and communicated professionally between the manager and the workforce.


Theory alone isn’t enough.  Human capital strategy needs to be rooted in a fundamental philosophy that understands that people drive a business and they must be managed with the same fervor that owners use to plan every other aspect of their business. Long term ROI depends on the ability to nurture the talent in your organization and fully utilize it.  In the process, employees get a more rich and fulfilling work experience that is a win for both employee and employer.


The concept may seem fundamental, but great companies stand out because they behave according to this core belief.  Do you have what it takes to be great?


Heather Martin is a dynamic professional with a passion for helping businesses improve their performance and results. She is also a freelance writer and creator of Crush the Box productions. She has a degree in Economics from CSUN and a Masters in Business Administration from the New Jersey Institute of Technology. She has a passion for writing about the intersection of business, economics and politics.



  1. http://www.cgma.org/Resources/Reports/Pages/rebooting-business.aspx
  2. Page 3 of Report: http://www.cgma.org/Resources/Reports/DownloadableDocuments/CGMA_launch_report.pdf
  3. Page 5 of Report: http://www.cgma.org/Resources/Reports/DownloadableDocuments/CGMA_launch_report.pdf
  4. http://growthforce.com/
  5. http://go.globoforce.com/rs/globoforce/images/SHRMWinter2012Report.PDF
  6. Source: CareerBuilder 2011 Survey of 2,696 hiring managers as referenced on http://growthforce.com/


More articles by Heather Martin:


Leave a Reply

Your email address will not be published. Required fields are marked *