Employees are sometimes referred to as human capital because, like other assets, they are used to generate income. The director of human capital is in charge of employee recruitment, training, and management. In many cases, the director of human capital’s responsibilities overlap with those of human resources (HR) personnel. Despite some obvious parallels, HR personnel are primarily concerned with employee relations, whereas the director of human capital is primarily concerned with maximizing the firm’s return on its workforce investment.
The human capital director creates a company’s or organization’s staffing model. Before deciding how much human capital to allocate to each division of the company, directors carefully examine departmental expenses and production processes. Aside from allocating employees, the director must also determine how much money each department will receive to cover wages and benefits. A board of directors may decide to devote the majority of the company’s resources to the most critical divisions. During periods of economic downturn, the director may be forced to make decisions about mass layoffs in order to reduce the upfront cost of human capital.
A director of human capital must look for ways to streamline company operations in order to maximize efficiency. When employees in different departments perform similar functions, the director may decide to assign all of those responsibilities to one of the departments in order to reduce the workforce in the other. Furthermore, local laws, taxes, and utility costs may make it more cost-effective for a company to employ a large number of workers in one region rather than another with higher operating costs. Before operations are moved from one region to another, the director must ensure that suitable candidates can be found to fill job positions.
Because of changing business needs and technological advancements, most employees’ job responsibilities are subject to change. The director must work closely with department heads to ensure that job descriptions for open positions accurately reflect the nature of the work. If job descriptions are inaccurate, companies waste time and money because a large number of unqualified candidates may be interviewed for these positions. Furthermore, technological advancements have rendered certain types of jobs obsolete, so the director must ensure that the company takes advantage of these advancements while lowering its human capital costs.
New employees and existing employees must receive any necessary on-the-job training and instruction, according to the human capital director. Directors must decide whether hiring and training employees is more cost-effective than hiring already experienced personnel. In addition, the director must decide whether it is more cost-effective to hire in-house trainers rather than contracting out employee training seminars to independent contractors.
Human capital directors typically have a bachelor’s degree in business administration or a related field. Some companies demand that directors have a master’s degree in human resource management or business administration. Most directors work in HR or management for several years before advancing to the position of director.