Chapter 4: The Four Pillars of Human Capital

OVERVIEW

In the first three chapters we gained an appreciation and understanding of human capital and the ensuing human capital crisis in the U.S. federal government. We also learned about approaches for developing a human capital strategy and what various federal agencies are doing in this domain. Now, we turn to describing the essential components of a human capital strategy—that is, what we are calling the four pillars of human capital.

Before examining the underpinnings of a human capital strategy, let's first take a look at the general workplace environment in the United States. According to the U.S. Department of Labor, Americans are now working more hours, on average, than employees in any other industrialized nation. In an article titled "Take this Job and ..." (Johns Hopkins Magazine, November 2002), Ed Bernacki, with the Department of Occupational Medicine at Johns Hopkins School of Medicine, indicates the following statistics:

• 24 percent of U.S. employees are putting in more than 50 hours per week

• 22 percent of U.S. employees work six and sometimes seven days per week

• 25 percent of U.S. employees never use their vacation time

• 40 percent of U.S. employees find their jobs "very" or "extremely" stressful

The message is that American workers today are more stressed out than ever before. Increased stress can lead to ill health and injury among workers, and reduced productivity. Additionally, high stress can affect the human capital assets in an organization.

Let's look at other statistics regarding the American labor force. The following tables were developed by the Office of Occupational Statistics and Employment Projections at the U.S. Bureau of Labor Statistics (http://stats.bls.gov/emp/home.htm):

Table 4.1: Distribution of the Population and Labor Force by Age and Sex, 2000 and Projected 2010 (Percent)

Group	Population 2000	Population 2010	Labor Force 2000	Labor Force 2010
Total, 16 years and older	100.0	100.0	100.0	100.0
—16 to 24	16.4	16.8	16.1	16.5
—25 to 39	28.4	25.0	35.7	32.1
—40 and over	55.2	58.2	48.2	51.4
—65 and over	15.6	15.8	2.4	2.9
—75 and over	7.1	7.0	0.6	0.6
Men, 16 years and older	100.0	100.0	100.0	100.0
—16 to 24	17.2	17.6	15.8	16.3
—25 to 39	28.9	25.4	36.1	32.3
—40 and over	53.9	57.1	48.1	51.4
—65 and over	13.8	14.2	3.2	3.8
—75 and over	5.8	5.8	0.6	0.6
Women, 16 years and older	100.0	100.0	100.0	100.0
—16 to 24	15.7	16.1	16.5	16.8
—25 to 39	27.8	24.6	35.2	31.8
—40 and over	56.4	59.3	48.3	51.4
—65 and over	17.2	17.3	2.7	3.1
—75 and over	8.3	8.0	0.5	0.5

Table 4.2: Median Ages of the Labor Force, by Sex, Race, and Hispanic Origin, Selected Historical Years and Projected 2010

Group	1962	1980	1990	2000	2010
Total	40.5	34.6	36.6	39.3	40.6
Men	40.5	35.1	36.7	39.3	40.6
Women	40.4	33.9	36.4	39.3	40.6
White	40.9	34.8	36.8	39.7	41.3
Black	[*]	33.3	34.9	37.3	37.7
Asian and other [**]	[*]	33.8	36.5	37.8	38.7
Hispanic origin [***]	[****]	30.7	33.2	34.9	36.4
White non-Hispanic	[****]	35.0	37.0	40.4	42.2
[*]Data not available before 1972. [**]The "Asian and other" group includes (1) Asians and Pacific Islanders and (2) American Indians and Alaska Natives. The historic data are derived by subtracting "Black" and "White" from the Total; projections are made directly. [***]Persons of Hispanic origin may be of any race. [****]Data not available before 1980.

Now that we have a sense for the distribution, race, and ages of the projected labor force in 2010 in the United States, we can use this data as background information for helping us shape a human capital strategy. Let's take a look at the essential pillars that should lay the foundation for a human capital strategy.