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What is Your Human Capital Strategy?

For the last 15 years, I’ve been working in the background on issues related to career development and the nonprofit arts sector workplace. I say it’s in the background because as a consultant in this field, it’s not a lucrative consulting practice on its own. I don’t have the numbers but I can say with a fair amount of confidence that there are few full-time or even part-time trained HR professionals working in arts organizations today. With lean budgets and low profit margins it is understandable that some operational elements get moved to lower levels on the priority list. It’s been on my mind more and more however, that deprioritizing HR has been to our sector’s detriment.

Today’s human resources are very different than those of even 10 years ago. HR in the private sector is seen as an integral part of an organization’s business strategy and often referred to as “strategic human resource management.” Asset management should be inclusive of people as well as finance, equipment and facilities.

A recent scan of 990s for arts organizations of all sizes shows that most spend at least 50% of their budgets on salary and benefits. If half of the cost of doing business is human capital, how is it that we neglect to put someone in charge of managing that resource or place its care closer to the center of our core operations?

I’ve been avidly following Zeynep Ton’s research on what she refers to as the “Good Jobs Strategy.” Dr. Ton is an Adjunct Associate Professor of Operations Management at the MIT Sloan School of Management. She recently published her findings in a book of the same name which describes how businesses that implement practices that support, engage and empower workers have found increases in productivity and outcomes.

While her research has been in the private and primarily retail and manufacturing sector, her overarching message is one that we can all relate to and echoes something I’ve advocated for in art organizations as well, that we see our employees as a capital asset not as a line item liability. Ultimately, a commitment to good human asset management is a leadership issue that supports organizational sustainability rather than detracts from it. What does strategic human resource management look like in your organization? I would love to hear your story in the comments below.

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