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Strengthening Our Human Capital

Last week’s news that Amazon is spending $700 million over the next six years to retrain a third of its workforce – an average of $7,000 per worker – struck me as yet another example of why the arts sector needs to pay much more attention to human capital. Can you imagine a day when arts funders commit millions of dollars to the training and professional development of arts administrators?

In this issue of On Our Minds, Joe Kluger and Victoria Plettner-Saunders contemplate the shifting landscape of human capital and the opportunity costs of not addressing one of the sector’s most vexing challenges – managing its human capital.

Our sector’s focus on issues of financial capitalization over the last ten years has been transformational. But I have a growing sense that we may have overlooked the human dimension of capital – the type of capital that shows up to work every day, goes home at night, and comes back the next day if you’re lucky. Do we need a similar field-wide focus on human capital over the next 10 years?

We talk about arts organizations being financially mis-capitalized (e.g., not having enough working capital, lacking reserve funds to support strategic commitments), but lack of investment in human capital is, perhaps, the most endemic form of mis-capitalization. Nonprofits rely on free or under-compensated labor to fill invisible structural gaps in their operating budgets.

From an ecosystem standpoint, the exchange of under-compensated labor for presumed fulfillment benefits (i.e., “passion pay”) is what keeps much of the sector going. But it is also deeply problematic in terms of collateral damage.

And then there is the problem of under-investment in the professional development of our people. Can we really build the workforce we need by sending people to conferences once a year?

There are many advantages to our sector’s highly decentralized infrastructure – the proliferation of innovation, the capacity to respond quickly and locally – and there are also many disadvantages, and the lack of sector-wide standards and practices for managing human capital is one of them.

At WolfBrown, we are doubling down on human capital as a strategic area of our consulting practice because we believe that our sector cannot thrive without a significant rethinking of and reinvestment in human capital. Over the coming months and years we will listen, study, publish, and convene in order to explore and better understand the interconnections between human capital and organizational sustainability and resilience at the sectoral level.

If people are our best investment, then we really need a better investment strategy.

 

 

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