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Why do you need a human capital value analysis in your business?

Today, we're 'under siege' in the proverbial 'talent war' that McKinsey famously defined in their research in the last 90s. Our valuable talent and skills are getting harder to find as these are tempted by the increased benefits offered by other companies. You can't do much to influence their decisions but what you can do is understand your organisation's existing talent to see if you've overlooked some of the skills you need that other staff members might possess. What is the best way to do this?

Speaking at the 3rd Annual Progression and TDCI Disability Equity Conference, Julia Wood - organisational development manager at Progression – said that the way you can uncover the skills in your organisation is through a human capital value analysis.

The first step in this process is to gain a detailed understanding of what type of talent you have in your business through a human capital audit. As a financial audit gives you a clear picture of the assets in your business, a human capital audit does the same in terms of your employees. Dennis C Carey and Marc A Feigen, in their article The human capital audit: The missing element of merger strategy, state that a human capital audit will give "a clear picture of the leadership and key employees in place, and their strengths and weaknesses relative to the industry and the market as a whole. It helps identify potential value to be developed and possible liabilities to be dealt with."

How do you carry out a human capital audit?

A human capital audit is conducted by interviewing one's staff members to find out if they'll be able to help you carry out the goals you've set for your organisation.

Wood suggests asking the following questions in your interviews:

  • What motivates you?
  • What do you understand about your role?
  • What are your future aspirations?

Implement an action plan

The next step in understanding the value that your human capital brings, and could potentially bring, to your business, is to determine how you're going to use the information you've gathered from them to execute an action plan that will assist you in achieving your business goals.

"In South Africa," says Wood, "there are many areas of compliance that organisations need to consider when, among others, crafting action plans and strategies."

These compliance areas are:

  • Employment equity, in which demographic profiling, recruitment and disability integration are included,
  • .National Skills Development, which encompasses PIVOTAL programmes and reporting, and
  • Broad-Based Black Economic Empowerment, which looks at partnerships, on-boarding and re-boarding, succession planning and career-pathing.

Under the Employment Equity Act (EEA), disabled persons are classified as a designated group, which means that they're among a population of people that you – as an employer – need to hire if you want to comply with the EEA.

Although compliance requirements are attached to disabled persons, if you feel that you want to employ a disabled person in your organisation, part of your recruitment strategy must be about concentrating on their abilities rather than their disabilities.

In addition, if one of your existing employees discloses that they have a disability, they're entitled to 'reasonable accommodation'. "'Reasonable accommodation' is any change in the workplace that will enable the person with the disability – who is qualified for a particular job – to enjoy equal employment opportunity," says Wood. For example, if you hire a physically disabled person to perform a desk job – and he or she has proved that they are fully capable of carrying out that job – you must make modifications to your building to make it easier for him or her to function.

You shouldn't employ people with disabilities merely as a 'tick-box' exercise to ensure your company is compliant with the EEA. If you happen to employ someone with a disability – or consciously decide to recruit someone who happens to suffer from a disability – your aim should always be to create a well-functioning and cohesive workforce.

As Wood so elegantly puts it, your goal should be to create "a diverse and inclusive environment that recognises individuals' uniqueness and differences."



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