people asset

Are People Really Your Most Important Asset?

Every time I ask this question, without fail, everyone puts up their hand.

But when I then ask whether they hold their HR teams and people managers as accountable for their people capital as they hold your sales teams accountable for revenue and their production teams accountable for production, all of a sudden there are less than 5% of hands remaining up.

When I then ask, do you have monthly people capital KPIs that you regard as just as important as your revenue, GP and profits numbers, we are down to less than 1%

“You can’t say that your people are your most important asset if you do not believe it,

if you do not hold everyone accountable”

The issue at hand is purely a matter of FOCUS.

As People Capital cannot be found on the Balance Sheet or P&L, both Boards and management teams are, simply, not held to account. I find it ludicrous that if someone takes an organisation’s boardroom table the Balance Sheet value of that organisation drops because the table is on the Asset Register, and yet if your best employee leaves the value of the organisation, on paper, does not even blip. Which of these two scenarios will have the greatest effect on organisational profitability? Certainly not losing a table!!

I ask the question again:

“Are People Really Your Most Important Asset?”

“And, Are You Really Walking Your Talk?”

So, what metrics can be used to hold your HR and operational managers accountable for maximising the impact of your People Capital? For focusing on increasing employee engagement levels?

Firstly, one that should not be used but is a real favourite is Employee Turnover. The reason why this is one of the worst measures is because you are incentivizing your management team to not challenge poor performance and not exiting employees who don’t achieve minimum expectations.

I am a big believer in creating KPIs that hold people accountable for activities, because if you have identified the right activities and then achieved these goals the financial results will be realised. Here are a few to consider:

The outcomes that are delivered by increasing Employee Engagement are:

  • + Increased Productivity
  • + Increased Customer Service Levels
  • + Increased Profitability

There are three main opportunities that will increase employee engagement levels:

  • + Recruiting & retaining top performing talent
    (by using high performance role benchmarks)
  • + Placing employees into roles they will be successful in
    (by not promoting people to incompetence, ensure they have “fit”)
  • + Developing a high level of leadership capability at all levels
    (not just at the executive level, most employees report to supervisors & mid-managers)

The End Game?

“Great Employees in the Right Roles,

being lead by

Effective & Confident Leaders”

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Written by Mark Purbrick

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