I can still remember when that term started frequenting our vocabulary a few years ago. As an HR leader, it felt like we’d stumbled onto something that might finally help us earn our legitimate seat at the executive table.
After all, most executives worship capital. Possessing financial capital usually means we are flourishing and able to seize opportunities. Capital is power.
So, finding a way to talk about employees and talent as a form of capital was brilliant. Even the CFO seemed to be on board with acknowledging that there was a real value in the collective knowledge, skills, and abilities of our employees. And, like any asset, if you make continued investment in it over time, the value steadily increases.
As a result of human capital being more widely used and understood, our talent management practices became intensely focused on developing employees’ individual competencies. The more each individual acquired skills and abilities, the more our human capital grew.
This model was highly effective when executed well. Jack Welch became a legend in part because of the training and development efforts he funded at GE. Human capital was seen as a competitive advantage by many.
But, then the game changed. The internet and social technology emerged to connect the world together in a way that had been unthinkable in the past. The days of doing work independently faded rapidly, and it became imperative to work together in collaboration.
Evidence of this shift can be seen everywhere. An online encyclopedia populated exclusively with user-contributed content nearly put traditional encyclopedias out of business. And, the most powerful operating system in the world was created by a community or programmers with no formal organization to manage their work.
The very nature of how we work and create value shifted.
The human capital model of human resources is incomplete, because it doesn’t account for the importance and value that exists through relationships. In today’s world, work is done together. And because of this, a new and highly valuable kind of capital has emerged: social capital.
In order to compete effectively today and in the future, human resources professionals must not only work to build human capital, but also social capital. This will requires taking on new roles and skill sets for our organizations.
If you are are an HR professional or manage HR for your company, please join me on March 9 at the HR Management Conference to explore how HR must embrace our new role as Social Architect.
This is a guest post from Jason Lauritsen who will be speaking at CAI’s upcoming HR Management Conference on March 8 & 9th in Raleigh. Jason has been described as “a corporate executive gone rogue.” For nearly a decade, he spent his days as a corporate HR leader where he developed a reputation for driving results through talent. As Director of Client Success for Quantum Workplace, he leads a team dedicated to helping organizations make work better for employees every day.