Human Capital: Solving A Recurring Business Problem?
When it comes to entrepreneurial firms growing in the next few years, Andrew Sherman, author and business growth guru, sees human capital as one of the biggest challenges entrepreneurs face. “This is a real problem,” he said. “Keeping good people, motivating good people and figuring out how to pay them properly is very important.”
Sherman said the real problem is a lack of “old-fashioned loyalty.” “It is not always the employees fault,” he said. “It is a two-way street. Employers need to show a commitment to people. You get what you give. If you treat employees like a true peer, they will probably stick around for a long time.
“Smaller companies need to understand what it is going to take to hold onto good people as they compete with larger companies with bigger benefits in era of reduced loyalty. Our children are growing up in an era where they are watching their parents switch jobs every three years. Small-business owners need to develop a compensation system, a motivation system and a culture that keeps employees. It’s not just about money. Everyone wants money, but people want other things as well. Small companies are in a great position to deliver big on those other things.”