Measurable operational risk in human capital development in the South African service sector

Abstract: The contemporary global business, political, technological and social arena is fraught with challenges, rapid development, continuous change and turbulence, which impact on all employees and the manner in which they are led and managed. Organisations in developed as well as emerging and developing economies, such as South Africa (SA), whether they offer goods or services, are especially affected by radical shifts in operational processes that often impede strategic success. Leaders and managers try to mitigate gaps in performance caused by such turbulence, via change management, organisational development and training and development interventions; however, they have to be extra vigilant of the operational risks that are associated with business operations and human capital development (HCD). Empirical research was conducted to understand and explain the perspectives of South African managers operating in the service sector on the measurable operational risks associated with their investments in HCD initiatives. Qualitative semi-structured interviews were conducted with leaders and managers who were responsible for HCD in selected organisations. Responses were analysed thematically to seek for common patterns and profound narratives. The key finding indicate that the top five risks in HCD are: poor staff retention; lack of learning transfer; misaligned training needs; disengaged trainees; and budget constraints. Risks ranked as high are: staff retention; lack of transfer; competitors; misaligned training; training aversion; limited budget; changing landscape; and training without impact. Further research is recommended to explore whether managers, HCD professionals and training providers measure specific risks, as well compare the operational effectiveness and risks of human capital development