What Is Human Capital in Agile, And How Do We Report On It?

Three ways to ensure human capital supports an organization's financial and auditory needs.

A year ago, I joined an already formed agile team as their new Scrum Master. The team had already existed a couple of years before my time, with several Scrum Masters and Coaches who had passed through, each leaving their unique mark, leaving people confused on the intent of agile. In my first month, I sat back and observed. No, not in a creepy way — instead, listening to the system to see how the team functioned.

While many observations were made in the one-month time frame, one particular habit caught my eye. The team manually logged their hours against each user story directly in Jira; however, no one knew why, nor did anyone use the data.

The more I observed, the more fascinating the behavior became:

• Only Quality Analysts and Developers logged hours, Product Owners and Business Analysts did not, despite the amount of time required in analysis or “pre-work.”
• Manual time entry was (most likely) fraught with human error, given the practice appeared to be an afterthought, an action requested by?someone?in the team’s past, with no real oversight of the data.
• Regardless of the hours logged on each user story, everyone on the team worked 40 hours.
• Given that most of the team comprises external contractors, time was (and still is) tracked separately, and I approve via email. Records were never pulled from Jira to review and agree upon.
• Finance or Audit never asked for the time tracking data from Jira, only from the external tracking spreadsheet.

After my month of quiet observation, I slowly integrated myself into the team and asked powerful questions to confirm my suspicions — time entry data from Jira was never used.

I asked the team if they wanted to log time, and the answer was unanimous —?no, not unless necessary.?Ultimately, time reporting is seen as a source of incremental overhead and waste for the agile team, which doesn’t produce end-user or customer value.

Guess what? From that day forward, the team quit logging time and has never looked back.

What Is Human Capitalization?

Not all teams behave like the one I describe above. Each company has its unique way of capturing time allocation and using the data for specific means.

What is the importance of time tracking in organizations? For those who live outside of Audit and Finance, the simple explanation is to report on human capital.?Investopedia.com?explains:

Human capital is an intangible asset or quality not listed on a company’s balance sheet. It can be classified as the?economic value?of a worker’s experience and skills. This includes assets like education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality.

Human capital is based on employee skills and knowledge through education; companies can calculate the investments with relative ease.

Investopedia.com?provides an example to explain how and why companies calculate human capital.

For example, if Company X invests $2 million into its human capital and has a total profit of $15 million, managers can compare the ROI of its human capital?year-over-year (YOY)?in order to track how profit is improving and whether it has a relationship to the human capital investments.

Now that we understand the definition of human capital and the purpose behind the calculations, how does agile enter into the picture, and what are the core challenges?

Integrating Agile Practices And Reporting On Human Capital

In my example, I witnessed time-tracking activities as an afterthought. Developers or Quality Analysts weren’t tracking their time against user stories at the end of each day, and I guarantee the results were fraught with human errors and miscalculation. On top of logging time in Jira, people were already filling out weekly timesheets for Finance. What is the right approach to capturing timely and meaningful data?

The?Software Development Times?asks:

Who doesn’t want an easier and unobtrusive way to deliver important Agile costing information to Finance, while keeping their developers happy and advancing their Agile transformation?

Here are three ways to ensure human capital data captured supports the organizations financial and auditory needs:

1. Agile Programs, Finance, and Audit must regularly determine best practices and ensure all needs are met. Historically, these groups of people are far apart in responsibility and function in mid to large enterprises and may not understand each other. One idea is to request a member of your organization, be it an Enterprise Agile Coach or even Accounting who has a clear understanding of reporting needs to help facilitate discussions and find common ground.
2. Automate time entry reporting as much as possible and reduce or remove the use of Excel spreadsheets. Consider the following action as a DevOps activity the agile team can tackle during bouts of downtime. Or use the challenge as an opportunity for a Hack-A-Thon.
3. Research various data-driven plug-ins for your agile product management application, such as Jira, to collect and disseminate data. One example is?Quantify, an app plug-in that utilizes smart tech to analyzes work logs and automatically calculates time spent working on tasks. Additional functionality includes reporting on performance and managing budgets, powerful enough to make your CFO smile and the new Developer on your team to focus delivering upon business value.

Agility, Finance, and Audit need each other more than they realize. Capturing the right level of human capital data allows organizations to understand better whether employees progress in knowledge, growth, and development. The data also answers whether more people need to be hired to initiatives or if budgets need to be enhanced or reduced.

When the three worlds come together in mutual understanding of each functional area’s needs, everyone benefits. And when it comes to reducing manual data entry, there are creative ways to solve the organizational challenges.

Is your team capturing data for the sake of it, yet you’re unsure of the meaning and purpose? If so, please reach out to?[email protected]?to be featured in an upcoming story.

This story was originally published on?Medium 07-05-2021

Lisa Bradburn is transitioning into an Agile Coach and is a?Gestalt Psychotherapist-In-Training.?She writes about the intersection of technology and the human condition. Follow Lisa on?Medium.