Human Asset Management (HAM) is the part of the company that manages human assets (or human capital). It is the management of employees as assets, combining many conceptual elements of an employee’s life cycle through an organization focusing on that people are a company’s most important assets. Many elements are included in the Human Asset Management area, including employer branding, recruitment, onboarding, retention, development, culture, career management, mobility, succession planning, talent management, performance management, employee administration and legal issues.
Contents
Definition
Human Assets are part of the Intangible Assets the company has. According to KPMG in the future the value of intangible assets will exceed tangible assets, already the case for many stock listed companies measuring three types of Intangible Asset:
Human Asset Management covers six interrelated and to some degree overlapping concepts, that individually and in combination affect competitiveness and performance:
- Competency profiling is about translating the overall strategy into competencies needed overall and for each function and level.
- Development Planning is about ensuring that the employees have the necessary competencies to meet strategic objectives.
- Talent Asset Management is now for almost everyone including retention activities. Also useful for identification of future top performers.
- Strategic Workforce Planning, including career and succession planning, is about how to compose the best workforce from a strategic point of view, in order to optimize performance and competitiveness.
- Performance Management is about translating hard and soft overall targets into measureable objectives that can be measured – and doing it.
- Recruitment and on-boarding is about selecting the right people with the right competencies.
Short-term and long-term corporate performance is also positively influenced when individual and overall competencies match requirements to execute the strategies.
The term ‘employment’ in this relation is transformed to ‘employability’ that not only represents the present job and remuneration, but also includes the ongoing update of competencies that ensures future employability.
People are assets, generating the ideas that ensure the success of a company. Human Asset Management is about first knowing who has what competencies and then figuring out how to combine complementary strengths within a team to generate value. This presence of organisational competence has a positive effect on competitiveness.
Developments
Human Asset Management is an evolution from the old terms like Human Resource Management (HRM) and Human Capital Management (HCM). Many organization defined people as ‘resources’ and used the term ‘Human Resource Management’. New thinking and research have suggested that employees should not be regarded or managed as a ‘disposable resource’. The importance of relating with an employer was highlighted by Quelch and Jocz.
Evolution
Not so long ago, employees were redefined as ‘capital’, coining the term ‘Human Capital Management’ when attempting to place a value on the human element. Human Capital Management started being used synonymously with HR. Human Capital refers to measurable values, and it is often used in relation to calculations that are variations of financial terms, like return on investments in development, effectiveness and benchmarking.
The first transitions to a new Human Asset Management concept can be traced back to 2001, when Andrew Mayo raised the idea that: The concepts of human assets and human capital are complementary. It is the intrinsic worth of our people that comprise the human capital available to us, and at the same time that worth is a value-creating asset
Use in Business Schools
After Andrew Mayo Human Asset Management as a term was first documented and used towards a wider audience by Sandeep Sander, CEO, SanderMap, in a presentation at the Human Resources Management Forum in Genoa, Italy, in October 2002. It was also in the same period part of video dialogue between Professor John Quelch, then Dean at London Business School, now Professor at Harvard Business School and Sandeep Sander.
Professor Andrew Mayo states in ‘The human value of the enterprise’ that “Every person is an individual, not just another ‘head’. They bring a different level of present and potential value to their current role and their organization”. This point of view was further emphasized by Prahalad and Ramaswamy (2004, p138), when they state that “…core competencies are unique skills that transcend individual business units, are deeply embedded in the organization, are hard for competitors to imitate, and are seen by customers as creating value”.
People
There are many people working in the Human Asset area, as practitioners in private and public organizations. In addition many work as consultants in people, change and transformation. Also in Business Schools, are dedicated to people issues, like Professor Linda Gratton at London Business School, Professor Mike Brimm at INSEAD and Professor Dan Denison at IMD.