Human Capital Horizon matters?
The human population comprises of valuable elements necessary for the development of the modern world. As the world keeps to shake off the remnants of the coronavirus, there are some crucial ideas emerging and compelling vital changes in the way humans work. As stability is being restored, it is important also to rethink how to sustain the human capital value over space and time. The future of work is dependent on how human capital is dispersed globally and how it reacts to what we would call the development of the modern world.
The current global crisis reveals holes in various sections of the workforce, including financial security and health coverage. With respect to Africa, the figures are heightened, and the “holes” as one would look at, in particular the formal employment sector, the numbers are astronomical.
Africa alone has more than 24 million jobs which were at risk due to the virus grip. With respect to assessing national value chains in all sectors of society, employees across the continent were vulnerable to bearing the pandemic had. For instance, within the field of education alone, numerous private schools across the continent were hurt, losing more than 20% annual revenue due to the virus, and leaving thousands of teachers without jobs.
Taking a close look on that context, the private school’s pool was hurt and prone to lose almost 20 per cent of the annual revenue due to the virus, while leaving thousands of teachers at financial crossroads.
Any company that relied on the importation of goods was also exposed to the brunt the pandemic brought, as infrastructure limitations and transportation were impacted.
Is the Pandemic a Global Wake Up Call for Human Capital
There is a better way to rethink and manage human capital. The irony is that it took a deadly pandemic to wake the globe to this as circumstance changed.
In that context, according to a World Economic Forum (WEF) report published on August 2020 titled Human Capital as an Asset: An Accounting Framework to Reset the Value of Talent in the New World of Work, the restoration of stability and sustainable growth ought to be redefined by adding value, to workplaces, economy and society.
The International Labour Organization reports that in June 2020, 93 per cent of the world’s workers were living in countries with workplace closure measures in place. The sharp economic downturns that have resulted from the crisis have dealt a severe blow to incomes and jobs.
In this case, pinning this approach towards Africa sounds to be a viable plan. Africa stands to be the most populated continent in the world in the next three decades, hence—for the region to advance economically, its human capital—could be the greatest economic value to transform all aspects of development as we know it.
As of now one of Africa’s key goal is towards attaining strength to compete in the global digital economy. This has been aligned in Africa’s Human Capital Agenda, which has seen the commitment of 22 countries (by April 2019).
Therefore, it is time for Africa to put to use potential approaches in the human capital agenda in all three fronts.
Sustaining leadership and prioritizing human capital across time, connecting the dots between sectoral programs that contribute to human capital outcomes, including beyond the traditional human development sectors and third—improving measurement and evidence.
Nigeria, Africa’s leading economy is facing unemployment, one in two Nigerians in the labour force is either unemployed or underemployed. Sadly the virus has manifested further the scenario, with latest figures from Nigeria Bureau of Statistics, points 27.1 per cent rate from 23.1 per cent in Q3 2018.
Africa’s second–largest economy, South Africa—faced a harsh scenario as it swims in a second recession it has seen a stark rise in the unemployment rate by 30 per cent, according to Statistics South Africa.
Retouching workforce principles
In this lot, the WEF report comes strong as an alarm towards all actors, particularly in the wake of COVID-19 hurting economies and jobs. Africa is losing nearly 20 million jobs by April 2021, according to an African Union report, Impact of the Coronavirus on African Economy.
These principles work as a guide for employers in planning and implementing rather ethical and sustainable work plans for their human capital, in this unprecedented situation.
According to the AU report, it is important to see this crisis as a defining leadership moment, continuing to deliver the best possible outcomes for all stakeholders.
Effective leadership should ensure that organizations stay true to their purpose, values and culture. They are transparent, empathetic and create trust, and their behaviour helps calm and support employees who may feel stressed and anxious.
“Adopting an agile and continuous learning mindset. The uncharted waters of this crisis demand agility and innovation to ensure responses are being recalibrated to a changing set of circumstances,” the report argues.
More importantly, understanding the perspectives of all stakeholders (e.g. employees, shareholders, customers, suppliers, unions, healthcare providers, community) and engage them in decision-making.
Further maintaining awareness of the shifting needs and priorities of all stakeholders and the evolving state of competitive and innovative practices.
Focus on the intersection of employee and company well-being. Cost pressures place significant stress on leaders to meet the needs of shareholders at a time when the well-being of employees, particularly the most vulnerable, is being seriously threatened.
But the risks too – and benefits of – employee well-being and company well-being are highly aligned.
Also, making decisions and take actions that consider medium-term needs and longer-term business objectives. Organizations should avoid engaging in short–term actions that may compromise the longer-term sustainability of the business.
The new path
Redesigning work environment is underway. Prior to the virus outbreak, technology was already taking its toll in shaping work on the continent.
Thus as Africa demonstrated potential actions in utilizing digital innovation in education, health, and finance, there are crucial lessons to explore here.
The AU report surveyed 514 employers and revealed that companies are now thinking and working around the clock to design with present challenges in mind, unlock innovative ways to build sustainable business models and cost-effective ones.
“As companies recalibrate to the new reality, a focus on balancing company and employee well-being – encompassing financial, social, physical and emotional aspects – builds a pathway to generate sustained value for the business and workforce and support more human-centric outcomes in the world of work. Companies recognize the need to focus on employee well-being, but such efforts would be given a firmer foundation by better human capital accounting that demonstrates their tangible value, “ the report argued.
The report also paved the road to explore seven guiding principles to change the human capital value from the conventional stance. From profit to purpose, from corporate policy to social responsibility, from stand-alone to ecosystems, from employees and jobs to people, work and skills, from the workforce as an expense to the workforce as an asset, from backwards-looking financial measures to forward-looking, broader measures of value, from quarterly to generational.