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This responds to Managing Human Capital Risk.

Friday, October 21, 2011
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In today's extremely difficult economic environment, the need for the human resources leader to assess the human capital risks within his/her organization takes on much greater emphasis than ever before.

However, for the HR leader to be truly effective in identifying human resources risks involved, he/she should not only concentrate of the organization's current business objectives but also the strategic business objectives for the next two or three years. 

As mentioned, for each current business objective or problem, you can identify the human capital risks associated with it. After the analysis of the current business objectives, the HR leader should shift his/her thinking to the strategic business environment as the strategic business objectives may, and probably will, greatly influence the human capital risks already identified while creating new ones. 

Some risks may increase or decrease in importance in relation to those identified for the strategic business objectives.

At this point, it would seem appropriate to identify some possible strategic business objectives for consideration:

1. The company's earnings per share and cash flow must improve by a specific amount.

2. In light of No 1 above, profit improvement opportunities for all major product lines must be explored so as to identify the specific dollar impact for each product line on the company's operating profit.

3. There is a need to improve the market share of the company's main product line by acquisition or product development through the use of a new technology that does not currently exist in the company.

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4. There is a need to improve the quality and quality image of your main product line in the marketplace.

5. Reduce the "time to market" for all product development projects by at least 25 percent to better position the company's product launch into the market.

6. Consider the acquisition of a company with an excellent cash flow record that has a totally different product line which utilizes a new technology, manufacturing techniques and marketing strategy.

In my view, each of the above possible objectives have an associated human resources impact that will affect the risks that were identified for the current business objectives.

Jack Bucalo

Retired CHRO

Fiserv Inc., a Fortune 500 company

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