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Unleashing Human Equity: an essay promoting resource investment for
employee education programs
-Larry Finkelstein January 3, 2017
**The following essay can be adapted for multiple platforms depending on audience and purpose.
The low, rolling rumble
in your stomach that echoes
with each glance at your labor
budget is a symptom of a larger
problem. Overall, the business
is healthy and realizing returns
on equipment and technology.
But, labor costs continually
outpace worker productivity.
You have a great rapport with
your team, but as you grow,
needs emerge for previously
unnecessary skills. If only
Janice knew Excel. If only your
team would apply the same
attention and analysis to the
challenges of your industry
that they devote to college
football. Who is worth
keeping? What resources
should be devoted to
replacement? You consider the
possible remedies for your
digestive and profitability
ailments. Labor is by far your
least controllable controllable
and every poor choice grows
daily, exponentially
detrimental to your company.
Logically, productivity can be
enhanced by improving the
skills and engagement of your
existing team.
Employees will always
want raises. At what point is
the value of a team member
surpassed by his or her
expense? We measure
productivity by comparing the
input of resources to the
output of products. Input, for
most companies means wages,
benefits, and training. The
output can be measured in
efficiency, customer retention
and growth. According to the
Bureau of Labor Statistics,
overall business sector output
grew by 42% between 1998 and
2013, while hours worked did
not grow at all and labor
productivity was stagnant.¹
Our people can’t keep up with
our innovations. As the
economy recovers, current
economic indicators forecast
further growth in labor cost.
So, how can we realize greater
returns on labor?
One solution is
obvious. By reducing the labor
force, contributions to overall
labor cost decrease. Some
organizations have adopted a
high turnover model.
Automatonic levels of service
and manufacturing reduce the
need for large numbers of
industry experts. These
industries invest in specific
technical applications and
procedures to promote ease of
utility as a counterbalance to
inexperience. This strategy is
most effective in those sectors
of the economy where human
interaction is most brief.
Outsourcing and partnering
also have their benefits, but
rely solely on increased
remuneration for increased
productivity often resulting in
limited gains.
Another popular
solution is to replace an aging,
experienced worker with an
inexperienced, although
capable, industry specialist.
Initial returns generally include
familiarity with innovations
within the industry, more
energy and enthusiasm, and a
savings in labor cost compared
to that of the experienced
worker.
These gains are often
tempered by the increased risk
of misapplication of innovative
solutions and the value of skill
acquisition. Skills acquired
prior to
employment
are usually
more expensive
than those
acquired while
employed. A
company may
have to spend
more resources attracting a
candidate who can utilize
spreadsheets than if it had
retrained an experienced
employee for the company’s
specific needs.
When replacing
employees, one must also
consider the shifting paradigm
of the modern worker.
Employment opportunities
created by ecommerce and the
rising cost of turnover lever
labor’s position and promote
urgency for retention. Today’s
labor force aggressively selects
employers. In a 2016 survey of
Millennials, consulting firm
Deloitte found that, given a
choice, 44% would leave his or
Given a choice, 44%
of Millennials
would leave his or
her current position
within the next two
years.

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For an
organization to
truly utilize its
resources … it
must realize the
potential of its
human equity.
her current position within the
next two years.² Some firms
have even resorted to using
surveillance
companies to
monitor
employees on
social media
and identify
those
potentially
seeking other
opportunities.
Outsourcing
eliminates tertiary benefits and
turnover is too costly. One
must therefore look to
increasing labor output by
improving the existing
resources. Sharpening the
blade will save the knife.
Raising production goals
arbitrarily can have disastrous
consequences. Raising them
solely for the purpose of
defraying labor costs is
untenable.
According to BLS
figures, gains in productivity
correlate to innovations.
Industrialization in the mid
twentieth century and the rise
of technological advances in
the aforementioned fifteen year
period spurred economic
output. The advances in
technology, materials, energy,
and connectivity combined
with the current fluidity of
capital can increase overall
productivity to a point. For an
organization to truly utilize its
resources to the fullest extent,
it must realize the potential of
its human equity. Some
companies recognize this
phenomenon and focus on
increasing worker productivity
by improving the worker.
This philosophy is
evinced by the evolving
workplace
environment.
Allowing
flexible
schedules,
having fewer
formal
meetings, and
coordinating
social events
help reinforce the
collaborative
relationship between
management and labor. The
Deloitte study indicated a
higher rate of vocational
satisfaction among Millennial
workers who believed the
organization’s values aligned
with their own. Today’s
successful company builds
brand loyalty within its own
workforce. Organizational
remedies, however, may not
result in an individual increase
in productivity. Specific
human resources must be
enhanced, rather than
replaced, to increase
productivity.
The first step to effective
personnel development is
attention to the individual.
Determine the skills that need
to be enhanced and motivate
to action. Humans are
motivated to action by reason,
compassion, and authority. In
the workplace, reason is
reflected in the wages;
authority stems from a belief in
the mission; compassion can be
stimulated through genuine
human connection. A random
inquiry regarding the welfare of
an employee’s loved one can
reinforce engagement. Pictures
and personal items help
energize the office. When
requiring an employee to learn
a new skill, mastery of the skill
must lead directly or indirectly
to the individual’s betterment.
In their paper, Well-Being in
the Workplace and Its
Relationship to Business
Outcomes, James K. Harter,
Frank L. Schmidt, and Corey
L.M. Keyes concluded that
“there is evidence that growth
of engagement relates to
growth of business outcomes.”³
Individual engagement is also
promoted through professional
development. Formal
development opportunities like
specific skill training,
collaborative techniques, and
organizational information
dissemination are most
effective and permanent when
specifically targeted to relevant
stakeholders and acquisition is
induced by interactive
methods. Informal
development opportunities
must be a part of every good
leader’s tool box and leaders
must judiciously take
advantage of these teaching
moments.
The second
characteristic of an improving
worker is an active and open
mind. Studies indicate that
healthy competition stimulates
“…there is evidence that growth of engagement
relates to growth of business outcomes.”

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creative thought and fosters
positive socialization. The
more successful examples of
using competition to increase
productivity occur in situations
in which the objective is
outside the employees usual set
of goals. For example, having a
sales competition among
salesmen can produce anxiety,
mistrust, and self-doubt. On
the other hand, having a
scheduled card night each
week promotes collaboration,
socialization and imagination.
The adoption of this
methodology is manifested in
curiously ubiquitous ping pong
tables and dominoes in
corporate lunchrooms.
Organizations are also
adopting game theory as a
method to induce creativity
and understand possible
avenues of revenue. Corporate
training activities and adult
education classes have adapted
curriculum to encourage
competition as a means to
knowledge retention and
transfer. Companies that have
identified the value added by
healthy competition create
opportunities for their
employees to not just compete
during the work day, but also
create opportunities for self-
improvement. Competition
fosters ambition as success
breeds success. In healthy
competition, both sides emerge
better for the experience as
defeats become pathways to
victory. The engaged, active
employee increases in value.
Finally, effective
professional development is
the sign of responsible
leadership. Homer praised
Agamemnon as “shepherd of
the people” and Socrates
relates that this is because his
people prospered through the
king. Through Agamemnon’s
leadership, his subjects could
have the best life possible.
While quality
leadership will inspire loyalty,
I’d hold off on those plans to
conquer Troy. The lesson to be
derived from this example is
clear. People will, for a greater
good, achieve beyond
expectations in response to
responsible leadership. When
choosing developmental
activities, one should clearly
explain the rationale for action.
The circular reasoning ploy of
“…because I said so” may work
to intimidate, but is only
effective in using fear as a
motivator. The repercussions
of this tactic are predictably
negative. Other, overtly
spurious explanations are
equally distasteful and reveal
a lack of organizational
vision. Also, one may have to
dedicate more resources to
complete a task that would
otherwise be counterintuitive
to human nature. Pride and
shame, when astutely
recognized, are guideposts
for effective action. Use
conscience as an indicator of
long-term success.
Be open-minded and
share your enthusiasm for the
process. The most valuable
returns on any educational
investment are the unintended
gains. Exposing employees to
continuing educational
opportunities increases overall
cognitive abilities. Activating
the learning process can
unleash the unimaginable; it is
the surest way to lead people to
extraordinary outcomes.
Measurement of educational
outcomes should have
objective and subjective
rubrics. Objective rubrics can
measure short term goals of
productivity, but to understand
long term growth of human
capital, each leader must be
able to qualify investments
with subjective criteria
identifying knowledge and
skills which may lead to spikes
in future productivity. In other
words, the best way to prepare
for an unknown adversary is to
go to battle with the most
versatile and adaptable troops.
The most efficient and
effective professional
development is done by
professionals. Industry experts
may have the current
knowledge and skill set, but
transferring those skills
requires different abilities. In
Jacksonville, the Schultz Center
promotes high-level thinking
and educational programming
across all sectors. Another
great resource is our post
secondary community. UNF,
FSCJ, and JSU all have
continuing education programs
on multiple campuses. Even
Duval County Schools offers a
The best way to prepare for
an unknown adversary is to
go to battle with the most
versatile and adaptable
troops.

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The most
valuable
returns on any
educational
investment
are the
unintended
gains
rich adult curriculum. The
expenses for accredited
institutions can often be
mitigated through credits and
reimbursement from federal,
state and municipal
governments who also have a
vested interest in the
betterment of your workforce.
Education is always a good
investment, but investing
resources in educating human
capital may seem
counterintuitive. The return
on investment may not be
realized in predictable
outcomes or may be realized by
another beneficiary. These
assets are not proprietary to
the company and leave with
the trained employee.
Traditional business
philosophy teaches
that excess education
has adverse effects
in the workplace.
In their 1991 paper,
The Impact of
Surplus Schooling
on Worker
Productivity, Mun
Tsang, Russell
Rumberger, and Henry
Levin concluded that
“the (increased) quality and
quantity of workers’ schooling
… may be ineffective at best
and counterproductive at
worst.”⁴ The study espouses
that workers will become
unsatisfied as their personal
growth outpaces vocational
responsibilities and rewards.
In addition, Machiavelli warns
that resources dedicated to
earning popularity are taken
from necessary expenses.
Added to that, competition
outside the workplace may
distract attention during
working hours and a leader
that spends resources being
responsible to his employees
may be seen as weak.
This perspective may
have been true in the
segmented world of the late
twentieth century
where employers
valued
compliance and
obedience. But,
if one looks
past the
surface
detractors, the
micro-benefits
and macro-
benefits of
improvement,
engagement, and
loyalty far surpass the
risk. The tools of this age
facilitate rapid organization
and growth. Workers have
evolved from the specific skill
set of the industrial age and
must be identified as versatile
assets. Today’s workforce
values surpass monetary
remuneration; employees
reaching their full potential
also value collaboration,
control, and participating in a
shared vision. Companies that
can utilize these versatile assets
will flourish while those relying
on coerced participants can
only follow.
On the plains of early
America, settlers bought
horses, strong and fast, to bear
the burden of farm labor. Soon
these entrepreneurs realized
that horses, while appearing
the better animal, were
susceptible to overeating and
disease and lacked the self-
preservation skills to avoid
injury or overexertion. Horses
were worked to death, while
mules stubbornly refused to
continue if doing so was
harmful. Horses were stronger
and faster, but the mule was a
better investment. Farmers
who adapted discovered
unintended benefits of using
an animal capable of being
trained, while others continued
to “beat a dead horse.”
1. Bureau of Labor Statistics - https://www.bls.gov/lpc/
2. Deloitte Millennial Survey - https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/gx-millenial-
survey-2016-exec-summary.pdf
3. Well-Being in the Workplace and Its Relationship to Business Outcomes, James K. Harter, Frank L. Schmidt, and Corey L.M. Keyes -
http://www.nhsemployers.org/~/media/Employers/Documents/Retain%20and%20improve/Harter%20et%20al%202002%20Wellbeing
Review.pdf
4. The Impact of Surplus Schooling on Worker Productivity, Mun Tsang, Russell Rumberger, and Henry Levin - TSANG, M. C.,
RUMBERGER, R. W. and LEVIN, H. M. (1991), The Impact of Surplus Schooling on Worker Productivity. Industrial Relations: A Journal
of Economy and Society, 30: 209–228. doi:10.1111/j.1468-232X.1991.tb00786.x