Mixed Response in IRR Industry to Rise of Human Capital Management

 

Mike May, Majority Owner, Brightspot Incentives & Events, a Dallas-based motivational events and incentive company, agrees that human capital has risen to the top of the corporate agenda but that it will take time to trickle down through the ranks of management to affect the more tactical businesses such as incentives and motivational events. He believes that human capital reporting is inevitable, but “this really should be promoted in the positive sense, as a way to enhance an organization’s brand, with not so much focus on ‘you have to do this or else.’” 

 

As to the role IRR companies such as his can play with clients, “We need to be consultants sharing advice, because if we are not, we become an administrator.  We need to push back when appropriate. Clients want to have a good healthy exchange.” How high can organizations like his go in the value chain of human capital management? “Sadly, I don’t think our industry can seize upon this advisory opportunity.  While many large and medium incentive agencies have the expertise, I believe that companies will perceive other consulting firms such as McKinsey, PwC, Accenture as the logical choices because the incentive industry is so tactical- and logistics focused. Changing internal perceptions is doable, but changing external perceptions is much tougher, especially with our limited advertising budgets.” 

 

Kudos, a leading Calgary-based international recognition firm, is another company that intends to focus on enhancing its current approach to the recognition field. “We have seen a shift in thinking and actions with many organizations globally, large and small, to increase their focus on employee engagement, as evidenced by new roles that focus entirely on increasing engagement, inclusion, and belonging. We are seeing more titles such as the Director, People and Engagement to Diversity, Equity, & Inclusion Manager. The C-Suite is driving these changes to address the talent competition and the new reporting requirements around ESG (Environmental, Social Governance) reporting.” 

 

He continues, “When you lose good people and or can’t hire the talent you need, companies quickly realize that good companies and or products alone will not sustain the business without great people. All organizations are people driven. Like the old saying, ‘take care of your people, they will take of your clients, and that will take care of your shareholders.’ If you put either of the other two first, you risk limiting your potential.”

 

Short sees “A new sense of urgency sweeping over many organizations around one question, ‘how do I compete in this new normal?’ It comes down to building people-centric businesses. Organizations of all types need to know their Why (purpose) and focus on their core values to give people (employees, clients, and investors) a reason to want to work with them, believe in the business, and invest in them. Alignment in purpose and values is critical to unlocking the potential of people and organizations."

 

What are Kudos’ plans to address the opportunity? “At Kudos, we practice what we preach. We are a core values-driven organization, we put our people first, and we leverage our own system to reinforce our purpose, communicate our values and recognize our team. To achieve great success, you need to recognize the small positive behaviors, contributions, and efforts daily if you want to achieve significant results year over year.” 

 

Dr. Bob Randall, CEO/Lead Consultant, Transcend Engagement, LLC, a Minneapolis-based employee engagement firm, observes: “There is more activity and continued momentum for human capital reporting. As we know, these changes do not happen overnight. We know employee engagement is a leading indicator of financial performance, so we are encouraged to see more reporting on this in annual reports. That said, not all companies have enthusiastically embraced this approach, but more are coming on board every day.”

 

In his opinion, “the change toward human capital reporting is happening slowly because our entire public company system is set up for a focus on short term results. Quarterly reporting creates a culture akin to the TV show “Survivor,” where every CEO/CFO is put under the spotlight for financial performance every three months. Employee engagement is a leading indicator of longer-term performance. It seems board members are increasingly realizing this, especially with the worker shortage limiting results in the here-and-now. We continue to see good activity in the employee engagement space – companies want real-time metrics so they know at a high-level how the company is meeting (or not meeting) the needs of employees. They also want predictive metrics and are ready to jump when they see a recognition program or communication program having a positive effect on engagement.” 

 

For the perspective of a company that focus on the broader issue of appreciation at work, ESM reached out to Dr. Paul White, Founder of the advisory firm named after his book, Appreciation at Work. Does he believe that the era of human capital management, measurement, and reporting has arrived? “Arrived? no. In the process of arriving (like a slow-moving general consciousness), yes.” 

 

Is the business world finally recognizing that if people are our No. 1 asset, they must be managed with a strategic, systematic, and measurable approach? “Many are – especially those who need people to directly provide services or production. But, unfortunately, many still aren’t – especially those in the fintech world; they seem to be stuck on the concept of “employee = production unit”. It is encouraging, however, to read the report by the Conference Board human capital working group – that they are seeing a shift among C-suite members to more seriously address the need to incorporate human capital initiatives into their overall strategic planning.” 

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