From crunching numbers to counting human capital: "manage what you measure" holds true as organizations compete for talent amid a shrinking workforce. Those that develop measures for assessing their human capital can better manage and value what they have.

• Author: Schiemann, William A.
• Position: HUMAN RESOURCES - Company overview

When sipping that next cappuccino, consider that the recent market cap of Starbuck's Coffee Co. was 7,313 percent greater than its fixed assets. Google has a market cap that is 8,842 percent of its fixed assets. Even hospitality organizations such as Starwood Hotels & Resorts Worldwide Inc.--which possess lots of real estate--and giant manufacturing organizations such as General Electric Co. have market cap ratios that are sizeable when compared to their investments in property, plants and equipment. (At the time this article was written, Starwood had a market cap-to-assets ratio of 177 percent, and GE's ratio was 409 percent.)

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There has been an increasing realization that fewer and fewer of an organization's assets are tangible and fall neatly onto a line of the traditional balance sheet. Items such as brand, intellectual capital, culture, workforce skills and innovation have increasingly become major forces in shaping an organization's current and future success. Many services firms note that more than 90 percent of their assets walk out the door each night. Even manufacturing firms are competing to a greater extent than ever before on services and innovations produced by their workforce.

As such, the value of human capital is too high to be solely the responsibility of the human resources function, and CFOs can play an important role in educating and collaborating with HR to develop better ways to measure and manage the value of the organization's human assets. Armed with information and analysis from finance, HR is in a much better position to assess and compare the potential impact of human capital investments and focus resources on those that will deliver the greatest return on investment (ROI) for the company.

Consider these four key questions:

* Why is it important to better understand human capital?

* How can the value of human capital be measured?

* How can that information be used to make important business decisions?

* What role can CFOs play in this equation?

It's well known that in many industries, geographies or functions, human capital is becoming scarce. Hawaii, for example, is facing severe labor challenges, with unemployment rates across the islands barely above 2.0 percent. North Dakota can't find workers to support its agriculture and energy industries--talent aside, there are just not enough people.

Hawaii's situation is a perfect example of a trend that promises to sweep the rest of the U.S. and...