The Strategic Way In Business

Individual Leadership Development | Team Optimization | Organizational Development

Human capital refers to the economic value of a worker's experience and skills. Human capital includes assets like education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality. Human capital is perceived to increase productivity and thus profitability. The more investment a company makes in its employees, the chances of its productivity and success become higher.

An organization is often said to only be as good as its people from the top down, which is why human capital is so important.

To be able to have a direct impact on the quality of the employees, the human resources (HR) department will play an important role: in workforce acquisition, management, optimization, workforce planning and strategy, recruitment, and finally, but not least, employee training and development.

Since human capital is based on the investment of employee skills and knowledge through training, learning, and education, these investments in human capital can be easily calculated. HR managers can calculate the total profits before and after any investments are made. Therefore, any return on investment (ROI) of human capital can be calculated by dividing the company’s total profits by its overall investments in human capital.

Human capital is the key driver for increasing

performance and profitability.