Since Pandemic, ‘Employees Have Become a Company’s Most Valuable Asset’

The rise of human capital as a company’s single-most important asset for value creation has been happening for decades, but the pandemic has helped us see that putting human capital first is just good business.

Author: Barbara Palmer       


The “Era of Human Capital” has begun, says future-of-work strategist Heather McGowan.

The acceleration in digital brought about by the pandemic means that, in the future, “virtual meetings will not be an exception, but an integrated norm,” said speaker and consultant Heather McGowan, author of The Adaptation Advantage: Let Go, Learn Fast, and Thrive in the Future of Work. “Hybrid is here to stay.” There are other, less-obvious, post-pandemic changes that McGowan, a future-of-work strategist and professor at the Centre for the New Workforce at the Swinburne University of Technology, in Melbourne, Australia, expects to remain long-term. They include:

Heather McGowan

Heather McGowan

Worker mental health is a strategic imperative. Before the pandemic, 11 percent of Americans reported regularly feeling anxious or depressed, according to the Centers for Disease Control — a number that spiked to 42 percent at the pandemic’s peak and remained at 35 percent at the beginning of June. “That means that if you are not paying attention to the mental health and wellness of your team members,” McGowan said, “you are not concerned with the success of your teams and, in turn, your organization.”

The skills gap will never close. “We are simply moving too fast to only hire humans with the requisite predetermined skills and knowledge,” for the jobs we are filling, McGowan said. Now “we hire workers for cultural fit, alignment, and cultural contribution, as well as a desire to increase their capacity — learning has become an integral part of work.”

Employees have become a company’s most valuable asset. The “Era of Human Capital” has begun, McGowan said. Pre-pandemic, customers were considered a company’s most important consideration for long-term value creation, but that has now shifted to employees, McGowan said. That follows a similar trend in company valuation that has been underway for years: from physical assets to human capital. Over the last decades, technological innovation has made human capital rarer than machines, McGowan pointed out. “In 1975, 83 percent of the enterprise value of companies on the S&P 500 came from physical assets — notably property plant and equipment. The remaining 17 percent came from intangible assets, notably human capital.”

By 2018, that had flipped — 84 percent of value was created by human capital, and only 16 percent was from tangible assets. “We’ve treated humans as a cost of production, a cost to contain,” McGowan said, “while humans increasingly made all the value.”

Purpose is paramount. McGowan points to research that shows that, post-pandemic, as many as 50 percent of workers are contemplating making work changes to better align with their core values — an even higher percentage than the 40 percent who said they will leave a job if it is not hybrid or doesn’t offer work-from-home or work-from-anywhere options. “Purpose,” McGowan said, “leads to better levels of engagement and profitability.”

Barbara Palmer is deputy editor of Convene.

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