Concret-and-Abstract-HCM

The Two Hemispheres of Human Capital Management

One is concrete, and the other is abstract. You need both, but not everyone in your organization will appreciate why.

This is a post about human capital management. It’s also about accounting.

Let’s say you’ve worked for any significant length of time in or around the profession of managing the employment of people. That would be HR and related fields. You’ve probably found it difficult to miss the perennial lamentations over the prevalence of antiseptic monikers and conventional silo-focused thinking when it comes to the technology and the thinking behind HCM. I sure have. Plenty have given it the good ol’ college try in trying to improve matters. Most choose to start with semantics. Following is my attempt….

Both the concrete and the abstract are

essential to employing people. Each appeals to

an entirely different human need.

The Essentials of Employing People

I see two main areas of HCM: the concrete and the abstract. Anything that could or already does fall under the auspices of the traditional catchall practice of talent management is abstract; everything else is concrete — payroll, time and attendance, benefits administration, core HR, and so on. Some concreteness does underpin most of the abstractness, much as a pen or keyboard facilitates writing. Employee self-guided learning is a good example. Suffice it to say, both the concrete and the abstract are essential to successfully employing people; each appeals to an entirely different human need, however.

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The Nuts and Bolts of HCM

The concrete is obvious: You must pay your people accurately — or else. You need to track employees’ performance and learning. You need an efficient, effective way to schedule their hours or otherwise plan and account for their labor, no matter what. You must comply with regulations no matter how seemingly unnavigable they are.

These are examples of the nuts and bolts of employing people. Without these, you’d be hard-pressed to offer employment in the first place. This is concrete HCM. The consequences of failing here are expensive in ways traditional bean counters appreciate.

There’s plenty of technology for concrete HCM, and most of the workflow responds favorably to automation. This lowers labor expenditure. And this makes it another reason accountants and financial-minded leaders understand and appreciate concrete HCM. If you’re angling to obtain organizational buy-in on an HCM initiative, one focused on an area of concrete HCM will encounter the least resistance from those controlling the purse strings.

The Feelings of HCM

Now, what do the money-minded struggle to appreciate? It’s how the employee, your talent, feels — your workers’ experience.

It can’t be automated. Artificial intelligence may one day become human enough to take care of it, but that’s the point, really; in fact, the “talent experience” is a new term we see. It’s abstract. Calling the talent experience something else, talent management, we’ve mistakenly approached our treatment of talent in a very concrete way — for years. We’ve even had the temerity to use the word “management” here.

But looking at employment from the employee’s point of view and feelings is at the crux of abstract HCM. It costs big-time future money to get wrong. Leave it to the bean counters to miss the point, still (and ironically). Our reliance on accountants is why we’ve treated the human condition at work — the talent experience — as mere nuts and bolts to assemble.

Our reliance on the bean counters is why

we’ve treated the human condition at work as

mere nuts and bolts to assemble.

Maslow vs Accounting

It turns out that focusing on the bottom line solely through the lens of immediate financial gain or loss leads to diminishing profits and, eventually, failure long-term — precisely what accountants fear. Maslow’s Hierarchy of Needs consists of more than food and shelter. Bean counters only account for these lower, survival-related levels of that hierarchy, and they assume employees will satisfy the rest of their needs, the higher ones, outside the workplace.

 

Ask any dedicated professional how well that works out. We must assume that employees overworked in tasks that do not fulfill their higher needs aren’t nearly as productive as they could be. Fortunately, this argument can persuade bean counters to see the benefit to the business of putting more effort into the abstract aspects of employment.

 

An organization that discounts or trivializes

abstract HCM imperils its viability long-term

as a continuing going concern, a term

accountants will find familiar.

Talent = People

It’s better than calling them human capital, but the connotations of the word talent still persuade us to consider employees a commodity, a currency, and not as people with feelings, too. Why do employees look for a job in the first place? Part of it is concrete, sure. They need the money and benefits. But the rest is abstract. We all have a desire to be worth something for what we enjoy — to meet all our needs by doing what is most interesting to us.

The talent experience is intertwined with an employee’s very sense of self. It used to be that employers could expect the employable public to suppress its desire to engage in something meaningful in a way gratifying to the deeper self, as a vocation. Those days are gone, and any organization today that discounts or trivializes abstract HCM imperils its viability long-term as a continuing going concern — a term any accountant will find familiar.

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