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In today's evolving business landscape, organizations are recognizing that they must balance profitability with the well-being and development of their people. This shift in mindset acknowledges that prioritizing profits at the expense of employees' welfare and the environment can lead to significant risks.
As experts in business education and business simulation games, we often see a divide in corporate strategies. Some advocate for a human-oriented approach, while others emphasize profit. We believe these strategies should not be separate. Integrating human and business strategies is crucial for sustainable success. This belief inspired us to develop a Human Capital Simulation with HEC Paris, focusing on the synergy between human capital and business strategy.
Talent is the Engine of Business Growth
A company may develop an outstanding product or offer an exciting service, but without a sound financial foundation, its future is jeopardized. Organizations need to understand their customer profiles to remain competitive and, simultaneously, develop their employees' financial acumen. This dual focus is the baseline of our Human Capital Simulation and all our business strategy games.
Attract and Retain the Right Talent
To keep evolving and successfully selling products or services, organizations need the right talent. This means hiring people who understand the product and its target market. Depending on the product's nature—whether technology-intensive or otherwise—and the work required, organizations need to attract various talent profiles.
These profiles require different onboarding levels and have varying expectations regarding learning, development, and career progress. The scale of production also impacts the number of talents needed. As an organization, you must attract the right talent, onboard them effectively, and develop their skills to enhance their productivity and expertise over time.
Failing to meet employees' expectations regarding learning and career development leads to attrition—employees leaving the organization. This is costly, as training new hires takes significant time and resources, disrupting team dynamics. Additionally, replacing employees involves hiring and onboarding new talents correctly.
The Cost of Human Capital in Profit and Loss
Salaries play a crucial role in both our Human Capital Simulation and real life. Employees expect fair compensation for their work, and salary differentials across management levels should reflect this. Underpaying employees can result in them moving to competitors who offer better pay. Therefore, balancing salary expectations with business affordability is essential to maintain profitability.
Team Leadership and Human Capital Allocation
Team leadership is another critical aspect of human capital management. Promoting too few people to management positions can lead to bureaucratic inefficiency, while promoting too many can result in anarchy. Both scenarios hurt production line efficiency and increase attrition.
In our Human Capital Simulation, as in real life, successful organizations develop sound business strategies aligned with their human capital. This involves creating a value proposition that meets customer expectations while ensuring a pool of talent that feels engaged, supported, and considered by management in the overall strategy.
If you're interested in exploring our Human Capital Simulation, drop us a message! You can also subscribe to our newsletter to discover other intriguing blog articles.
