What Are the Different Human Capital Challenges?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 15 June 2019
  • Copyright Protected:
    Conjecture Corporation
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Human capital challenges are found in companies of all sizes and types. Since human capital has to do with the skills and abilities that are cultivated among employees throughout their time with the employer, understanding those challenges and knowing how to deal with them effectively is an important part of the human resources management process. While the exact scope of human capital challenges will vary from one company to the next, core issues such as retaining valuable employees, employee development, motivation, recognition and rewards, and even leadership training are highly likely to be ongoing issues to address within any business.

Employee retention is one of the more common human capital challenges that companies face daily. This is particularly true when competitors are actively courting employees who are very important to the function of the business. Here, the goal is to make sure the corporate culture is appealing and that the employee feels invested in the business effort and the mission of the company, not only in terms of compensation but also in personal career satisfaction. Without anything to motivate the employee to remain, chances of losing that employee are much higher.


Training and employee development are also human capital challenges that have an effect on the resources of human capital that a business can call upon on a daily basis. Qualified employees should have access to ongoing educational opportunities that encourage the enhancement of their skill sets, and empower them to be more productive in the work environment. At the same time, these opportunities should be forward-looking, equipping the employees to not only be proficient in the jobs they hold now, but also for jobs that may be available in the future. When employees see opportunities for advancement within the business, they are much more likely to feel loyal and desire to remain with the employer.

Human capital challenges also involve finding ways to motivate employees, even when the company is facing a tough economy. Here, the necessity of recognizing and rewarding employees for their hard work and loyalty is very important. Even if the company is a small one and money is very tight, finding a ways to recognize efforts with a small bonus or even something as simple as a paid meal at a favorite restaurant can go a long way toward maintaining morale and easing any worries about the future of the business. As the economic situation reverses, offering additional incentives along with the recognition will help to reinforce that perception.

Human capital challenges often have to do with helping employees develop skills that serve them well in the workplace, providing both the employer and the employee with benefits as the result of those efforts. Along with helping employees develop, there is also the need to make them feel invested and an important part of the business, an approach that helps to minimize the chances of them leaving and the company losing that investment. By balancing the need to be supportive of and empower employees with the necessity of keeping the company profitable, it is often possible to create a corporate culture that is inviting, offers significant opportunities for growth, and helps to turn those human capital challenges into human capital success stories.



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