What does human capital strategy mean?
The answer seems to differ, depending on who you ask. Ask local elected officials, and the answer will likely involve their plans for K-12 schools or community colleges. Ask economic development leaders, and they might discuss their strategy to attract more jobs to their region. Ask an employer, and the answer is probably focused on delivering strong business performance.
At first glance, these responses may seem like different strategies. In truth, they are all different prongs of the same strategy. All are ultimately about building strong, healthy, and resilient communities. After all, businesses need a strong community – and a healthy society – to thrive.
I spend most of my days translating between the vocabulary of the business community and that of social impact or mission-driven organizations. People often ask me the question “what do businesses want?” The answer can be found through no longer thinking of businesses as homogeneous entities that want things, but as a collection of individuals working to accomplish a shared goal. When the question is framed this way, the answer is simple: businesses want simplicity. Businesses need talent to grow, and people need meaningful work. Straightforward solutions that meet both needs are a win for everyone. The long-term economic objectives of businesses and the long-term social needs of employment, education, and training should be designed around the same goals.
Productive, engaged employees working in roles in which their skills are best being used is what everyone is aiming for. Developing those in-demand skills is key for both companies and communities. But the current system makes it far too difficult for employers, even with the best of intentions, to meaningfully engage as strategic partners on regional human capital strategies. This only grows all the more troubling as the world of work continues to rapidly change. The future of work is now.
The half-life of skills is shrinking, with many technical skills losing their usefulness just five years after they were first obtained. Employers are having trouble filling open positions, saying they simply can’t find workers with the right qualifications. At the same time, there is great demand among workers for better education and training. According to the Pew Research Center, more than half of all working adults now believe they must receive continuous training throughout their careers in order to succeed. Learning and development rank as the most popular workplace benefits among millennials.
Last month, Walmart released a public report on how automation is poised to radically reshape the next generation of work in America. Now more than ever, businesses must lean into community-based regional workforce planning. Employers must view human capital not simply as those who are employed versus those who are unemployed, but rather as a complex web of talent that spreads across an entire community. Employers must coordinate and collaborate across the entire education system to create on-ramps and off-ramps to continuously improve the skill sets of employees, the region, and the local economic market.
Importantly, this development must be directly aligned with the jobs that need filling. Skill-building initiatives only have value if a community has jobs where a worker can make use of those new skills. While employers in Austin are looking for workers with business management and leadership skills, for example, employers in St. Louis are having trouble finding employees with experience in public policy. Employees in some cities like Detroit or Minneapolis might benefit most from developing web development skills, while workers in rural areas may benefit more from focusing on welding and other manufacturing skills.
Walmart is currently investing in an example of this kind of partnership in South Bend, Indiana, working with the Drucker Institute at Claremont Graduate University, the South Joseph County Public Library, and Mayor Pete Buttigieg to develop lifelong learning for the city. The initiative brings together employers, educational institutions, local government, nonprofit training organizations, and community groups to transform South Bend into a lifelong learning city.
The driving question behind these efforts cannot simply be “what do businesses want?” Instead, we should ask, “how we work together to build strong and healthy regional economies?” Businesses have a role to play, but so, too, do robust educational systems and motivated individuals who value learning. Is it possible for businesses and the communities in which they operate to work together to create outcomes that benefit both businesses and people? If the answer is “yes,” then we will have the power to move entire communities forward.