Any chief executive officer will tell you that the competitive edge that his or her organization has over others is its people. People are the key asset that distinguishes one organization from another. The people, and affiliated partnerships, provide the "brainpower" to propel the organization through the waters, either through smooth or choppy tides. As a result of this realization, various communities have been trying to measure the contribution of human capital to an organization. Human resource accounting techniques have been used in the past to measure people's worth. Activity-based costing methods and other financial accounting practices have been applied to measure human capital. The knowledge management community has also been interested in measuring the intellectual capital of an organization. Companies like Skandia publish an annual intellectual capital report to measure their intellectual capital. Researchers like Nick Bontis at McMaster University have even developed models to measure the intellectual capital of a nation.
For organizations to achieve their strategic vision, people will need to be recognized as an asset rather than a cost. Strategic partnerships will continue to be created to maximize the wealth of human capital in an organization. The positions of Chief Human Capital (or People) Officers will most likely be created to spearhead the strategic management of human capital in an agency. Increased emphasis on knowledge management within the government will occur, with many agencies hiring either Chief Knowledge Officers (CKOs) or Knowledge Management Officers. These CKOs will work closely with the Chief Human Capital Officers to help build and nurture a knowledge sharing culture. Increased usage of recent retirees, term appointments, university and corporate relationships, and outsourcing will take place in the government as part of an agency's human capital plan. Improved recruiting and hiring processes will be utilized to attract new employees into public service and retain individuals with critical skills. Legislative reforms will most likely be invoked to help government agencies cope with the ensuing human capital crisis. An emphasis on developing a results-oriented, customer service—centric culture will play a major role in reshaping government agencies.
Government agencies, as well as industry, must be sensitized to the need to include the four pillars of a human capital strategy: competency management, performance management, knowledge management, and change management. Each pillar must be included in an organization's human capital strategic plan. Each pillar has a symbiotic relationship with each other and, when combined, form a powerful structure for building a human capital strategy.