Experts say Human Capital is a Leading Challenge for Firms

By: The Entrepreneur's Source | 0 Shares 116 Reads

Southbury, CT - Analyzed research conducted by The Entrepreneur's Source indicates that a large percentage of start-up and small business owners find hiring talented employees and retaining them to be one of the top challenges in running a business.
"The mismanagement of human capital is the main reason that good companies never become great," said Terry Powell founder and CEO of The Entrepreneur's Source. "Leadership plus communication and teamwork equals the solution for making the best of your company's human capital."

The study cites that many firms fail to grasp the value of human capital. Employers lose money when the wrong person is chosen and struggle with inability to retain talent. Lack of employee continuity and poor training impedes on high quality service, thereby affecting a company's longevity.

Many businesses spin their wheels trying to find employees perfectly suited for their jobs, Powell said. However, the right combination of skills and personality can be hard to find. Therefore, when the process fails, they spend several months and 30 percent of the salary trying to replace the bad hire.

The Heldrich Work Trends Study, published by Rutgers University, reflects this data. According to the study, 57 percent of companies with 100 or more employees have had difficulty-hiring workers with the required skills. In effect, a significant amount of productivity is lost due to vacant positions. Each year, about one-third of the workforce changes jobs – largely to take advantage of better opportunities. A large percentage of firms find they are not prepared to deal with this "revolving door" situation.

There are innumerable reasons why an employee chooses to leave a job, but research firm Sibson & Co. cited that the top reasons include: no one listened to their needs, they were not offered the chance to learn new skills, they were given too little time away from work, there was no form of written appreciation during their tenure, the workplace was unsafe, or there was a complete lack of challenges on the job.
Domineering personality, ineffective leadership and poor communication are some of the major barriers that occur between a company's management and staff, Powell said. Some employees may never reach their true potential because management doesn't understand how to address the challenges of different personalities, and when leaders don't know how to connect with people, the flow of work stops and hard feelings set-in. As we begin to understand generational diversity in the workplace, we realize without effective leadership skills everyone suffers and productivity plummets.
However, with the right guidance, written and interpersonal skills, and formal training, start-up businesses and small businesses can overcome these obstacles, Powell added. The Entrepreneur's Source is a leading coaching and advisory firm that specializes in helping business owners identify and overcome the key challenges that are preventing growth, then provide Rapid Impact Solutions to help them realize the vision they have for their company.

About The Entrepreneur's Source
The Entrepreneur's Source (TES) is North America's leading career and business coaching company with more than 250 offices in the United States and Canada. TES offers a full-range of services to individuals seeking alternate career options and to small-to-medium size companies looking to increase performance. The goal of the Entrepreneur's Source is to partner with both individuals and companies to achieve their desired outcome.

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