How to Identify Human Capital Centric Companies During Your Job Search

CIO — When you're hunting for a new job, it can be hard to tell if a prospective employer truly cares about its employees or if the company treats them as interchangeable parts. All employers will tell you they view their human capital as their most important asset, but do their actions reveal a different mind-set? Are they just quoting Jack Welch to get you to sign on the dotted line?

Knowing a prospective employer's true attitude can make all the difference in whether you decide to work there and in your career. If you find out a company has a history of conducting mass layoffs any time it misses its quarterly financial targets, you should realize that the company views its labor force like Silly Putty: something it can squeeze and stretch thin at will. If that's the case, you may be the victim of one of those staff cuts not long after you start.

Edward Lawler, a management and organization professor at the University of Southern California's (USC) Marshall School of Business, has spent years studying what he calls human capital centric companies. In his new book, Talent: Making People Your Competitive Advantage (Jossey-Bass, 2008), he defines human capital centric organizations as those that get their competitive advantage from their employees. Thus, those companies are committed to attracting, recruiting, developing and retaining top quality talent. Human capital centric organizations, he writes, "are designed and managed—from the boardroom to the front line—in ways that optimize talent attraction, retention and performance."

Because human capital centric organizations place so much emphasis on the importance of their employees, they can be among the best places to work. However, says Lawler, they're not right for every job seeker.

"Human capital centric organizations put their own set of demands on people that not everyone may find comfortable," he says. "The human capital centric organization is likely to be more stressful, more demanding and to require a higher level of commitment to the job and to the company than a more bureaucratic organization."

What's more, not every human capital centric organization is equally employee friendly.

Lawler distinguishes between two types of human capital centric organizations:

• High involvement ones, which are characterized by their participative management and decision making structures and their commitment to their employees' professional development, and
• Global competitors, which offer challenging work at high salaries in return for little in the way of job security.

Consequently, says Lawler, job seekers need to understand with which organization they're dealing when interviewing for jobs. To help them determine if a prospective employer is human capital centric and whether it's a high involvement organization or a global competitor, Lawler lists some characteristics of each, and he suggests questions job seekers can ask of prospective employers during the interview process.

Characteristics of Human Capital Centric Organizations

They're obsessed with talent. Lawler says human capital centric organizations are caught up in the entire human capital management process, from recruiting through employee development and performance management.

The business strategy hinges on talent. Lawler says the employee is the product in human capital centric organizations. "Once a business strategy is established, talent is front and center in terms of implementation," Lawler writes in his book.

Performance management is a top priority.Human capital centric organizations have systemic processes for assessing employees' performance against business goals, and they use IT to do so. Discussions about training and career development are part and parcel of performance management activities.

Their board members are experts in human capital management. "The board spends at least as much time on talent issues at it does on financial and physical asset allocation and management," writes Lawler.

Their hiring processes are rigorous. Lawler says candidates for jobs with these companies should expect the recruiting process to take a long time. They may face interviews with many of the company's employees, including the peers with whom they may be working.

Job descriptions can be vague or open-ended. Lawler says human capital centric organizations are more willing to adapt jobs and job descriptions to particular candidates, especially if the candidates have unique skills or expertise.

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