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Background of the Problem
The investment process is an integral aspect of a company development that allows improving performance and providing sustainability. Every organization has specific investment priorities determined by its vision, mission, and strategic plan. Frequently, such spheres as technology and product improvement are in the focus of investment projects. At the same time, investment in human resources is underestimated. Still, researchers agree that human capital is a significant factor in the sustainability of an organization and needs additional funding (Ehnert, Harry, & Zink, 2014). Thus, this memo concentrates on the evaluation of opportunities provided by investing in human resources and its impact on the company’s sustainability.
Contribution to the Mission of the Company
Investment in human resources can be beneficial for the mission of the company. For example, the focus of Amazon’s mission is to be earth’s most customer-centric company, which demands employees able to provide clients with high-quality products and services. Because both services and products depend on the staff, investment in training and education of employees is a contribution to the mission of the company.
Benefits for the Value Chain
The value chain included the company itself, its employees, suppliers, and customers. Investment in human resources provides benefits for the company as a whole due to the better performance of well-trained employees, which can increase revenue. Employees benefit from this type of investment because they receive an opportunity for self-development and career growth. Suppliers will be the least affected party in case of investment in human resources, but sustainable development of the company and the growth of income are expected to provide suppliers with long-lasting cooperation and demand for their resources. Finally, customers will benefit because they will receive a better quality of service or product provided by better-trained employees.
Impact on the Company’s Sustainability
Investment in human resources is expected to have a positive impact on the overall company’s sustainability. Employees who receive regular training and are involved in continuous education in the field of their specialization or neighboring spheres have the potential to increase the competitive ability of the company. Consequently, the company demonstrates better performance in a highly competitive and constantly changing business environment. It results in higher revenues that allow further investment in significant spheres of the company’s functioning. Also, investment in human resources adds to the value of the company as well as to its image as an employer, which attracts better qualified and experienced employees.
Evaluation and Anticipation of Investment Risks
Despite evident benefits, investment in human resources has certain risks for the company. The major risk is related to employee retention. Thus, the staff members who are trained and educated at the cost of the company can seek better employment opportunities in other organizations. Therefore, the company will not receive the expected effective output from the investment. This risk can be mitigated by creating competitive conditions for employees and the provision of transparent career perspectives empowered by training and education they obtain. Another possible risk is the selection of programs for staff training. In contemporary conditions, there are diverse opportunities for employee development and education, but the choice of a proper course or training can become a problem. Still, the company can address this risk by careful investigation of any program suggested to its employees and select those that can be beneficial for the performance of the organization.
Ehnert, I., Harry, W., & Zink, K J. (Eds.). (2014). Sustainability and human resource management: Developing sustainable business organizations. New York, NY: Springer.