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The Impact of Weak Human Capital

The Impact of Weak Human Capital

June 21, 2023

Human Capital 

Without taking care of the stars in your business, your organization will fail to reach its full potential. 

Dan Paxton, Principal at ExitSmarts, Inc., states, “Human Capital is the most important of the Four Capitals, while at the same time it is usually the most overlooked. Potential purchasers are interested in all the financial metrics of a business, but the astute purchaser knows that these metrics can evaporate overnight if the Human Capital is weak.”  

When working on your employee development plans, follow a series of steps that encourage growth in your employees and your business. 

Strengthening Human Capital does not have to be a complete overhaul of your team and your business. Even small business improvements can provide owners with exceptional growth in Human Capital. 

Improve Human Capital in a business by addressing these several issues and operational processes. 

  1. Do you have an incentive program in place to motivate top-performing employees? 
  2. How well do you retain top talent in your organization?
  3. Why do employees leave your organization?
  4. Do you offer opportunities for employees to share their ideas for business growth? 
  5. How is this business going to operate after the departure of the existing ownership? 
  6. Are the right people in place to continue the business’s future growth? 
  7. What is the likelihood of both key management and rankand-fle employees staying with the company after the exit of existing ownership? 
  8. What is the status of employee turnover, morale and productivity.