WHY PROPERLY MANAGING YOUR HUMAN CAPITAL IS ABSOLUTELY NOT AN OPTION

For any business undertaking to succeed, it needs capital. But when we hear the word ‘capital’ our mind often plays a trick on us and we only get to think of capital in form of financial resources. However, every successful business owner knows and understands that capital in a business is not limited to finances but it also includes something that is as important as finances-if not even more important.

As you read this, you may be wondering what could be as important or perhaps more important than money in a business. But before I let the cat out, let me make an assertion-Whether your business is a start-up or has been in existence for many years, it needs capital to grow and thrive. Therefore, having a solid understanding of capital and how it can benefit your business can help you regardless of what stage your business is at.

So, the question is: “What is capital?” Well it is anything that increases your ability to generate value. Now, if you think critically about that definition, you will realise that you need more than finances in order to be able to create value in your business. Apart from finances, you also need humans. This is what we call Human Capital.

There are many arguments for and against whether human capital is as important or more important than financial capital. However, I think this is an old and tired debate which is time consuming and is not a subject of my discussion. Instead, I prefer to look at the two types of resources as being equally important for any business venture to succeed. The two are not mutually exclusive. You need both finances and humans for your business to succeed, period.

Now, the main purpose of my article is to focus on the importance of managing your human capital well in order for your business to thrive and grow, especially amidst the disruption that has been brought about by the Covid-19 pandemic which has left many businesses either shut or stunted. The importance of finances is a discussion for another day. In this article, shall focus on the need to properly manage the human capital aspect for your business to succeed.