Human capital may not show up on your company’s balance sheet, but your team is one of your greatest assets. If your business has set its sights on increased growth, decreased employee turnover, and long-term success, then building and managing a highly cohesive team of A-Players is essential.
What is the Condition of Your Human Capital?
Simply put, human capital is “the economic value of a worker’s experience and skills,” according to Investopedia. Multiply that across your entire workforce, and you have the total economic value residing in your team’s capabilities. That asset, though given no dollar sign, is worth protecting, enhancing, and managing well.
One key measure of the health of your team is engagement.
Gallup’s recent “State of the Global Workplace” report observed that only 21% of adults working full time are truly engaged at work. If that statistic holds true for your company, the value of your human capital is dwindling. It’s time to determine where misalignment has occurred: where B- and C-Players are either being under-challenged to engage, or, worse, just taking up space.
To manage your team well, you must begin by accurately assessing the people you’re working with. Informed by such an assessment, your management practices will improve employee engagement and retention rates while equipping your team to accomplish your business objectives—not just this year but also into the future.
Why Robust Team Assessment Matters
To know your team, it’s important to determine how many A-, B-, and C-Players you have onboard. With your A-Players identified, you can praise and possibly promote them as their capabilities and work ethic will further your business objectives. Next, understanding the strengths and weaknesses of your B-Players will allow you to provide them with positive challenges and targeted training to improve their engagement and increase their value to the company. Assessment data will also give you confidence to exit your C-Players—those employees who consistently fail to hit their goals and objectives while exhibiting behaviors opposed to your core values and culture.
Personal experience has taught me the value of robust team assessments. In my car dealership business, I inherited a team of 50 retail sales executives with a turnover rate of 35% per year. Appalling, right? After a thorough team assessment process, we weeded out the C-Players and recruited A-Players to replace them. This resulted in increased sales, significantly higher customer satisfaction, and a turnover rate that plummeted to about 10% annually. As you can imagine, this had a very positive impact on our bottom line.
Like low engagement, turnover is another flashing red warning sign of dwindling human capital. Until you assess the make-up of your team and properly manage the problem areas, high turnover will continue. Departing employees not only drain off everything you invested in them, they also carry away the skills and knowledge they developed on the job. Their absence leaves a vacuum that will only be filled by additional expenditures of time and money for recruitment, training, and so forth.
Turnover is Tied to Team Management
Managing your team well requires addressing the reasons employees are leaving.
Commonly reported causes of turnover include:
- Believing better opportunities for growth, achievement, and security lie elsewhere
- Desiring better compensation and/or benefits
- Seeking a more pleasant work environment (whether physical or cultural)
- Hoping to improve work-life balance
- Aiming for more job satisfaction
- Frustration from working with C-Player colleagues or bosses
Performing a robust assessment of your team, as mentioned above, prepares you to understand your people and strategically enhance their strengths and mitigate their weak areas. You will be able to better manage your people by aligning their needs and desires with your business goals, structure and culture. You will ensure employees feel heard, understood, and appreciated, that their on-the-job needs are met, and that the path to professional growth that dovetails with organizational growth lies clearly marked out for them.
This is where a structured system like Metronomics helps link strategy to execution. The system’s repeatable playbook is part of the reason I became a Metronomics coach; it’s a key tool I use to help my CEO clients get better results.
Strategic efforts to enhance your company’s human capital will help build a solid, loyal team that both re-invests the resources already poured into them and enriches the company’s value and reputation. Higher quality employee prospects will be drawn to a company that boasts strong team loyalty and longevity.
Managing your team well also calls for being forward-thinking. It involves assessing current talent gaps in light of your business strategy. Strategic managers create plans to fill those gaps with talented A-Players. These teammates will be people whose personal capabilities and commitment to the good of the company will make managing the team a pleasure. These are also people who will set you up for strong succession planning. For a refresher on why A-Players are so valuable to the long-term success of your company, read my earlier post here.
At this point, you may be wondering if your own team management could use an upgrade. So let’s get specific about steps you can take to improve your practices.
Invest in your current workforce. With training targeted toward shoring up their unique skill sets, your employees can become your greatest competitive advantage. According to McKinsey Global Institute, “skills learned on the job contribute 46% of the average person’s lifetime earnings.” Employees whose careers you advance will feel more loyalty, raising your retention rate and strengthening your resiliency during crises, positioning you for more consistent earnings over the long haul.
Walk the floor. Make sure your top leaders spend time “on the floor,” talking with those who truly understand daily operations. This was a lesson I learned while struggling to bring my own family’s business back from the brink of failure. As I wrote in my book, Being Frank:
“It is always preferable to connect in person with your team. Ensure that you walk the floor and speak to your staff on their territory if you want to learn how to improve your business… Learn to ask better questions and listen to what your people are telling you.”
Solicit their feedback. Welcome—maybe even incentivize—bottom-up innovation.
Provide what workers need to work well. Ensure your workforce has up-to-date equipment; don’t make them labor against their tools to get the job done. See that repairs are made in a timely fashion. Furnish them with the necessary supplies to keep processes running smoothly—whether in the sales office, the shop, or the showroom. Pay attention to whether the workspaces work for your people. Where are employee strain or injury most commonly reported? Eliminate the causes. Are quiet areas available for phone transactions? And what about technology? Is your business software regularly updated, your internet connection reliable, and your computers meeting above-minimum requirements to run your systems?
Make it personal. Customize your employee development to fit each person’s specific strengths and weaknesses. Help them grow into a role you need and which they show signs of being well-suited to perform. This creates a win-win situation for both employee and employer. Employees experience more job fulfillment when they work in positions where they get to use their strengths. And the employer benefits from having loyal, well-equipped people doing the work necessary for the company’s success.
Talk to your people. Improve communication with employees. Help them understand that your human capital management processes drive their success as well as the company’s. This leads to more engagement at work, which Gallup cites as the precursor to “lower absenteeism, higher productivity, lower turnover, and fewer quality incidents.” At the same time, you benefit from hearing directly from the people who know your operations best. According to the McKinsey report, “The workplace should work for employees, with coaching to help them develop, structures for support, and workflows that remove frustrations. Employees know what works on the front lines, and their voices and viewpoints should inform any redesign.”
Don’t consign team management to HR. Let someone in senior leadership—your CEO or COO, for example—drive team management initiatives. Pick a person with a grasp of the company’s business strategy coupled with a commitment to establishing a culture that seeks to understand, equip, and empower individuals in the workforce to achieve organizational goals. A caring, strategic thinker is what you need; someone who wants to build people up for their own good as well as that of the company, with the authority to make decisions.
What Team Management Like This Can Do for You
To sum up, the best team management brings business strategy and objectives to bear on the way you build up your team—enriching what you have now and intentionally hiring A-Players you can invest in for the future. With a strong team management strategy in place, you will likely experience improved financial returns as well as more consistency and resilience during downturns, talent retention and loyalty, and a solid reputation as a company headed for long-term success.
If long-term business growth seems out of reach for you at the moment, let’s talk. I have a proven process to put all the pieces in place for you to achieve your goals. Book a free business growth assessment today.
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