While employee compensation is often the largest expense item on your Profit and Loss statement, your employees are also your VC firm’s greatest asset. Investing in your employees, then, is essential for future growth.
The Evolution of HR
Recognition of this fact has led to a sea of change in the way successful companies think of the HR function. Whereas HR was once considered ancillary to the real work of business strategy, it is now understood that appropriate human capital management (HCM) is foundational to business growth.
Gartner defines HCM as “a set of practices related to people resource management. These practices are focused on the organizational need to provide specific competencies and are implemented in three categories: workforce acquisition, workforce management and workforce optimization.”
Commenting on this shift in organizational thinking, Deloitte’s “2016 Global Human Capital Trends Report“states: “CEOs and HR leaders are focused on understanding and creating a shared culture, designing a work environment that engages people, and constructing a new model of leadership and career development. In competition for skilled people, organizations are vying for top talent in a highly transparent job market and becoming laser-focused on their external employment brand. Executives are embracing digital technologies to reinvent the workplace, focusing on diversity and inclusion as a business strategy, and realizing that, without a strong learning culture, they will not succeed.”
Embracing Change to Drive Business Growth
The question before VC firms now is what to do to embrace this change. What investments can you make to ensure that your employees’ needs are met successfully and that your human capital management strategy is continually improving?
1. Recruit with an eye on company culture.
Progressive talent acquisition strategies must take into account, not merely filling a vacant position within your firm, but finding a candidate that goes beyond core competencies and provides added value to your company culture.
Investing in top talent requires a proactive approach that focuses on team-building and support. This shift in focus encourages employee engagement down the line, bolsters morale, strengthens your employer brand, and promotes employee retention.
2. Onboard efficiently.
With the technologies now available to facilitate the process, employee onboarding can be streamlined. Commenting on the role of automation in modern employee onboarding, Entrepreneur’s “5 Tips for More Easily Managing Your Human Capital” notes: “Technology plays a key role in simplifying HCM. It helps employers store, track and manage new hire paperwork, create new hire tasks and monitor progress, as well as foster socialization through online portals. Unlike traditional onboarding methods, automated onboarding procedures can be used and referred to as often as needed — saving companies both time and money on new hire training.”
While automation eases the process, effective employee onboarding also includes ensuring that new hires have a frictionless experience while integrating into your company culture. It involves buy-in from managers, team leaders, and co-workers of the new hire. Consistent communication and regular constructive feedback help a new hire to adjust and contribute in a more productive way more quickly.
3. Re-tool your performance review process.
It is easy to fall into the trap of handling performance reviews by rote. However, this approach wastes a prime opportunity to invest in your human capital. In Business News Daily’s “HR Evolves into Human Capital Management“, Deb Cupp, Senior Vice President and General Manager for HR Line of Business at enterprise software company SAP, observes: “Instead of just focusing on the top performers, think of everyone as talent. Focus on the individual [and his or her] ability to progress. Look at their long-term options – [HR] should be open and communicative about … career paths in the organization.”
This shift in perspective allows you to use the performance review process, not merely as a means of reviewing past performance, but as a springboard for employee engagement. When your performance reviews focus on the future goals of the employee and what steps need to be taken to help that employee achieve those goals, the performance review becomes a vital part of your human capital management strategy.
As the role of HR continues to evolve, it becomes increasingly clear that your employees are your VC firm’s greatest asset. Managing them effectively involves recruiting with a view to improving your company culture, onboarding with a strong emphasis on team-building and collaboration, and conducting performance reviews that show genuine interest in employee advancement within your organization.
As successful VC firms focus more fully on strategic human capital management, it is important to use appropriate technologies to facilitate growth. ThriveTRM offers a robust talent management solution to help your VC firm manage your greatest assets successfully. To see ThriveTRM in action, schedule your demo today