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I have an admission to make.  I got caught up in consultant speak. I succumbed to the temptation to use cool, CNBC-style jargon.

One term in particular was finding its way into my writing, my speeches and the Firm’s marketing materials. 

The offending phrase did not seem all that bad when I used it the first time — coincidentally after reading a McKinsey & Company global research report.   Over the past two years I have continued to use the phrase, insensitive to its true meaning – and the negative implications.  But no more.  I have sworn it off. In fact, I am embarrassed that I even used it at all.

The offending phrase? Human capital, a term that “is inherently dehumanizing and helps explain why employee disengagement is so rampant” a serious problem that will feed excessive turnover that will certainly occur when the economy begins the inevitable recovery.  This interesting and I believe accurate assessment comes from Jon Picoult, founder and principal of Watermark Consulting in Simsbury, CT. 

A Fortune 500  executive has argued that human capital “is really no different than any other type of capital equipment, like aircraft. You’ve got to develop and maintain people, just like planes to make sure you get a good long-term in your investment,” the executive explained to Mr. Picoult who wrote “Here Comes A Turnover Storm” for the business section of Sunday’s New York Times. “Lost in the analogy is the fact that capital assets like aircraft depreciate over time.  From an accounting and a market-value, they’re gradually worth less. Eventually, they’re written off entirely.

“So what message are companies sending to their employees when they wave the human capital banner?” Mr. Picoult asks. 

“People are not equipment.  They’re not investment capital.  They have needs, wants, aspirations, worries, insecurities and lives out of work.  Companies that recognize this fact will shape their employer-employee interactions accordingly,” Mr. Picoult writes. “These companies and their managers become more communicative, more appreciative, more connected and more civil.  In a word they become more human.”

The employee loyalty created by this approach can be striking, Mr. Picoult correctly argues.

As the economic recovery takes hold, companies will scramble to capture these disaffected employees.  In healthcare, given the technical and skills requirements for a majority of the jobs, the competition for these employees will be fierce. With the certainty of reductions in Medicare and commercial insurance reimbursement will that lower revenue, employee turnover and recruitment will take center stage as costs that must be measured and managed.  There simply will be no room in the profit profile of American hospitals for the high costs of unreasonable employee turnover.

Now is a good time to drop the consultant speak and potentially negative phrases like human capital.  Mr. Picoult is a consultant that I agree with.

© 2010 John Gregory Self