Topic: Human Capital, An Intangible Asset for a Company's success. (Read 388 times)

Human capital has always been the most important factor to determine the success of a company and even a country, however during the last decades there has been a shift in the way many companies treat their employees, treating them as if they are just cogs in the machine and they can just replace you with another person without too much of a problem, and while this can be the case in a great deal of positions, there are many employees which quit their jobs or were fired and showed their previous employers that they were indispensable for the operations of the company.

Technically you're correct, but don't forget there are a lot unemployment rate in big population country, so even though he's work really hard, but as long as his position is just a general and easier to be replaced, the owner will have nothing lose to fire him.

Increasing salary a little will not enough because he will try to demand more and more, this make the owner has no option except to fire him than decreasing the company's profit.

"Imagine if you took over Silicon Valley, if you conquered it with troops. Where the most valuable companies in the world are, where the richest people in the world invest, what would you get? Nothing."

This sentence appears in Harari's books. Because the only thing that makes Silicon Valley valuable is the people who add value to it. The creativity, intelligence and quality of education of these people make it valuable. They produced 1 gram chips with 10 billion transistors in them from sea sand and opened and closed an era with this. They changed the whole world. This could only be done with human capital, and so it was. Nothing else is needed.

Just to add to what you said: it is true that when you show love to the employees, they will also love their work and be encouraged to do it. If the business owners show sincere appreciation to their employees, the employees will undoubtedly return the favor.

If you are the owner of a business or corporation, then it goes without saying that those employees will interact and deal with your clients the majority of the time when you are not at your firm.

Maybe there are differences between countries and I haven't seen what you're talking about in the years I've been an employee. But I have a question, how will they fire you if you work hard and give your all? I mean, are they willing to fire a good employee to replace someone who is lazier than you but still pays that salary? Meanwhile, to retain and receive your dedication, just increasing the salary a little will not be a big request for them. A good leader will never easily give up talented and dedicated people to accept lazy people, that will only cause the company to go bankrupt soon. And as for those companies, they don't even deserve you working for them.

You bring up an important point. The fact that many business owners and company personnel do not care about and value human life has caused the change to accelerate. I do not want to define this change as positive or negative. Artificial intelligence uses the experience humans have accumulated over the years, but can it truly replace human capital? This may happen in some jobs, but not in all jobs. This change is happening because human capital is not valued and there is always a desire to cheapen production.

This sentence of yours summarizes everything. “It's one thing to be aware of what Human Capital is, it's another to acknowledge it and give people proper credit and care.”

While it is inspiring, There's a darker side to this growing awareness of what Human Capital is. For instance, we're mostly aware of what AI is and how it threatens to take the jobs of regular people away. From grunt work to managerial positions in corporate. We're at the cusp of a paradigm shift which could go well or worse and at this moment, thanks to corporate greed and the lack of care and value for human life by many business owners and corporate personnel, AI is winning, off of the hard works and decades of dedication, talent, and experiences that human workers invested into by the way.

There's also the age-old debate of wage increase which many businesses withhold against their employees regardless of how valuable they are to the company, so yeah. It's one thing to be aware of what Human Capital is, it's another to acknowledge it and give people proper credit and care.

There are pros and cons in investing in Human Capital, the good thing here to avoid such a waste is to find good people that is loyal to the company.  People will eventually resign or retire, but the good thing is that the company is able to maximize the potential of that person that produce way more profit than the expenses the company spent training them.  Aside from that, these people can also train other people in the company.  It is normal to pass down the knowledge and skills to juniors in the workplace.

When it comes to job and professional scale of service pay on wages and salaries, people were not being justified because ot everyone is paid according to how their standard worth or the efforts rendered on the job they do, there's no specific pay rates to each category of labour in work settings and these also is determined by the country where this is applicable to those working under someone, some company earn more but give less to their workers as salary because there's no strict compliance to the appropriate paying rate over human efforts.

Definitely, if they see a better opportunity, they will gladly accept, but the problem too is that in some third-world countries where it is usually so difficult to secure a good job, citizens just manage whatever job they have been employed on, no matter the pay or unfair reward for their efforts, and like you said, if it's for a company where the required staff that is needed is less compared to the high number of applicants, those that would be employed would consider themselves lucky, and at such a time, they can decide to work with such company, no matter the condition.

There was this company that my one of my uncle was working with last year (a refinery), but the company usually delays paying salaries; sometimes they can even owe them for three months. Despite the debt the company was owing their staff, they still assured them that they would pay, but the day they were paid, it was only for two months that the company paid for and still owe for one month. Luckily, he got another job with a better offer and pay.

I've heard the term human capital before when I had an Economics course at the university, but yeah, it was hard for me to understand that initially. Now I think it's actually a huge deal, but also that we should remember that humans are much more than capital and deserve to be treated as much more than that. Interestingly, though, it is acknowledging human capital that can help to improve working conditions and provide opportunities to workers, taking into account that it's a valuable resource that should be cherished and well-cared for.

You probably wanted to say businessman or company founder, right?

So, an investor businessman should undoubtedly think about human capital first of all, because no business is possible without this capital, that is, employees. An investor businessman won’t do all the work himself, right. It is traditionally accepted that the basis of any business is the client, because they bring money and without them the business means nothing. But it seems to me that this doesn't create a complete picture, because I believe that business is also impossible without human capital, that is, people who, through their labor, allow this business to function. And of course, any businessman simply must take this into account.

Very suitable. Yes. As you said, the health factor is the main factor that needs to be considered, especially if you work for a company, especially a private one. Usually bona fide companies have big targets at the end of the year and they must be achieved. What is certain is that in order to do/achieve this, their team needs energy, good stamina and a stable health condition in carrying out the company's year-end targets.

Maybe this only happens in one country, because not all companies treat their employees that way. You can look at and research several other companies in different countries to find out how the company treats its employees. Because I think companies that don't respect their employees and take the employees who work for them for granted, the company will not progress and could even potentially go bankrupt if there are no employees working for them anymore in the future.

Employees are part of the company's assets so the company must be able to look after them well enough so that the company can continue to move and operate well every day. Because companies that are able to market their products quite smoothly are companies that do not have problems internally and externally within the scope of their own marketing targets.

This is really depends on where you live.

If you're live in a developed country where they paid high wage according your skill, low corruption, and small population, your point are correct.

But if you're live in a developing country where they paid low or minimum wage, high corruption, and big population, your point are wrong. Even you've work very hard and show your full capability, they will take advantage over your kindness and hard work. They will happy, if their employees are willing to work harder for small amount wage, why not? if you complaining why you're not get higher wage, they can replace you easily because there are many unemployment due to big population.

That is one of the things that went too much in the wrong direction. Diversity based on race made sense when it first started. Because if we take USA for example, that means if you hire someone because they are white and do not hire a black person, that is racism and that shouldn't have existed. Meaning, a harvard graduate black person versus some state college white person shouldn't even be a question, you hire the harvard graduate everyday, but some companies didn't.

This resulted with diversity hiring, meaning you hire the best of the best from every race, whoever applies, you shouldn't look at their race, and hire them. But then suddenly it went too much ahead and now you hire diversely even if it means hiring someone worse, and went the other way.

Instead of blaming companies for not treating their employees well. Why don't employees show their full potential because I believe there is no company that doesn't want to value talent. But the sad thing is that most employees always complain that the salary is too low, so they don't want to try their best and only work with the capacity they think is worthy of the salary they receive. They are too greedy when they want to receive a high salary before contributing to the company, while to get a high salary, they must devote themselves first.
If you were a business owner, would you pay high salaries to everyone, even those who know nothing, or would you only pay based on ability after evaluating each person?

Although humans have unlimited talents, they cannot do everything they want. That's why they should focus on one thing until they really master it. If they really master it, they can get better jobs and earn better salaries too.

Unfortunately, many workers don't want to improve their abilities and are satisfied with what they get. This makes them unable to develop for the better because they must train them by participating in various training to hone their abilities.

They no longer want to bother training their skills, especially for workers about to retire. They become unproductive for the company and only work as hard as they can and think they will soon retire so there is no need to train their skills.

I understand your point. If employees are paid well there utilization will be very high because monetary reward, salary and compensation are good drive for employees performance most times but when they are underemployed and underpaid, they are also likely not to put in their best or begin redundant in the company. It is wise to make employees happy by making sure they are well enumerated so that their performance can also be top notch and that will help grow the company.

Yes, actually humans have unlimited talents compared to other assets created by humans. but unfortunately employees are underestimated in some countries. assume these are just employees who get paid when they work, even though with the help of the employees the company runs very well. I don't feel human resources are lacking. but sometimes attention from the company, and some needs that should be the company's responsibility are not met.

First of all, I think that sounds too good to be true. And if ever there are, I think their percent is only tiny. As a company, they need to be strict because this is where they grow. Those employees who are under that company are blessed and they know it so I don't think they will resign except only for a major reason like they are injured and can't perform well anymore.

Any employers know that not all employees can work forever on them but they can always find another replacement for it. Investment in human capital is never a waste because the company also benefit out of it. And if there are new employees, I don't think there is even a cost to train them.

If this is the case then the company is missing out.  I bet these employees who suffer such exploitation don't have loyalty to the company and they will leave the moment they find the greener pasture with the same treatment or better.  However, I cannot deny that many companies thrive like these since they are just lucky to have more people looking for a job than the job availability. This mostly happen to casual employees at the lower level of the chain.  But on the higher level job where education, mastery, management, and critical thinking are involved, companies are taking good care of them since they know that the services offered by these individuals are very essential to the company's success.

First of all, yeah, human capital usually contributes to the success of a company in different ways, but some companies in some parts of the world don't usually appreciate it when their staff shows all this human capital. Normally some companies or organizations are already paying a small salary, but it doesn't sometimes matter to them the kind of effort that the staff is putting into the company for success; what they only seem to realize and act faster on is when the staff is not being steadfast; they seem to recognize mistakes quicker than effort. Sometimes it even becomes unfair that a staff member will put all their human capital to work but will never get a salary increment or some incentives, but it will still be required of them to keep doing their best. I am not saying it is so with every company, but what I am talking about is something that is common in some organizations, and I also do watch things like that in some movies .

I don't just want to start telling stories now  .

Human resources are good for companies human resources plan is the process of predicting the needs of the future human resources of an organization and how to meet those needs. Analyzing current workforce is the prediction of future human resources based on business goals, strategies and inferior growth, also to develop solutions to fill these vacancies through the combination of training development programs setting any gap between the present and future needs. It also helps to determine the number and types of employees needed to support the company's goals, growth plans and strategic initiatives.

         -   Most people don't know about this human capital. Most of the time, they only hear about it, but they don't know what part it plays in the success of a company. In fact, it contributes a lot to the company's success. And one of these is that it can provide innovation and improvement, and it can also raise or boost the reputation of a business.

And above all, it also provides good service to their customers because the employees of a business are well trained and skilled. Because if it is not applied correctly, nothing will happen to a company that will have a good profit and market shares.

You have highlighted a crucial factor that can determine the success or downfall of any company, and that is the strength of its human capital. Investors and management of the companies should emphasize on hiring right person for the right job, providing ongoing training and development and create a culture that values and nurtures the human capital. It can become a driving force behind a company's success and growth, when managed effectively.

I agree with you. When a company or organization shows much value to human capital they will be able to form a better relationship with their employee which obviously results in a better performance from them. As much as it is a great thing for employees, it mostly has a direct impact on the company as the effects of such gives the company good results. Moreover, companies that value their employee and acknowledge human capital creates a good image for the company especially for investors, consumers, and future employee as it shows just how humane and humble a company is, as well as how they value their team.

Perhaps true, perhaps not. I concur with the idea of providing training because it's akin to giving them the opportunity to grow. If we generalize the method of boosting employee morale by raising salaries, it indeed can provide them with an instant burst of enthusiasm. Even workers tend to feel happier when they receive more money on payday.

However, loyalty cannot be bought with money alone. Everyone has their own perspectives regarding their jobs. Some reasons why people want to stay motivated and engaged at work include having harmonious team dynamics, a clear career path, a healthy work environment, opportunities for personal growth, and more. High salaries also serve as one of the motivating factors.

The bottom line is to ensure continuous communication with employees to understand what is needed to keep their spirits high at work.

Human capital is no doubt a valuable asset to an organization and when it’s recognized and utilized in an organization, the organization would definitely grow.
Organizations today recognize the great benefits human capital can bring to the organization and that’s why they have the HR Department to help the organization cash in.

A happy and satisfied employee would be extremely loyal, motivated and would go all out to ensure the success of the organization.

Imagine you're have a company and you're really care with your employees for giving many good thing for them, but after next few years they submit a resignation letter

You expect them to work for you entire of their life because you've give many training course, development, pay good amount of salary etc, but the reality people comes and go, all of your investment in human capital are become useless because you need to spend more money to train the new employee.

This is why investing in human capital isn't good.

Of course, and it's completely understandable. Companies are business entities. They aren't charitable institutions. Their purpose is to make money. If people have a choice whether to work for them or not, they probably won't. But most of us look for a job. We need to earn, and the most common way to do it is to be employed in a company.

But while the ultimate goal of a company in investing in human capital is its profitability, we give credit to those that somehow look after the welfare or well-being of their employees. We take note that we aren't indispensable. Other companies are cruel to their employees. Especially in developing countries, or even in highly developed ones like China, where labor force abounds, many don't care about their employees. They're cheap and are easily replaced.

It is indeed the workforce is the driving force for a business's success.  The right choice of people and the right path of workforce learning enhances this success.  A business is nothing when there is no workforce behin it, or the human capital is not managed enough to produce the desired result that give  a company more profit.

Giving training to people, allowing them to have a good enough rest, and paying their overtime accordingly will enhance the workforce's loyalty thus can help in securing the future of the company.

Definitely, and that's why it will go on several process, eliminate those applicants that did not fit the role and zone on employees that you think might be the right fit for the job.

Yes, capital is the key to being a successful company, so it's very important to look for the right personnel. And if ever you find one, then give the personnel good benefits and compensation so that it won't just leave you and go to your competitor because they have a better compensations and benefits. And this is why Apple, Google and Microsoft get their best employees, it's not just pure work for them, but employees have some fun too.

And this is the reason why some companies are willing to invest on their people by providing them with competitive trainings, seminars and other means to gain more knowledge about their role.
Some small companies may think of the money that they will spend, but they forget to look at how it will help them in their respective roles in the company.
What they usually think is that after they gained such knowledge or expertise, that person may find a better job.
However, their knowledge will be stagnant if they will stay on their job without additional skills to use.
So it depends on the management how they will keep up with the competition and provide competitive package to their employees, so they will stay in the company.

if you want to start a business in future then keep in mind that not only investing in your employees is important but also hiring a right person for right role is important.
how it will be like to giving computer training to an uneducated labor worker.
We can know many things about a person in a interview with him, like his past experiences, internships, questioning about the role, why he choose this field, etc.

I agree human capital is a key to companies success that's why apple, microsoft, google, like big companies gives their employees competitive compensation and benefits packages.

It's true that the collective acquired knowledge within certain businesses is what ends up giving them the edge against their competitors. It is very easy to overlook and just assume everything is running well because of all the processes or technology residing in a business, but often it's the actual people within it who keep it ahead. This can sometimes show when companies are taken over and a cost cutting exercise is embarked upon in the new purchase, key staff can be stripped out as part of cost cutting exercises but then the once glorious acquisition can start to fall over and fail. The workplace culture that certain people can bring makes a huge difference, if you're surrounded by happy, intelligent and productive people who are constantly learning - it can create a fantastic environment.

The idea is beautiful, but in some places idealized and "detached" from reality.

I will touch on only one issue: training, staff development. First of all, it is not mandatory for all positions or specialties, but it is a topic for a separate discussion. I can give an example from my field - IT.
On the one hand, it is very logical that a specialist (programmer) working in a software company is more valuable and in demand, the higher his qualification, experience and knowledge of technologies. And for a company, for example, a development outsourcer, it is profitable. As well as their competitors Therefore, "investment" of a company in training its employees is a favorable and generally forced measure, but after that it is required to create conditions for "retaining" this employee in whom the company invested money.
If you sign a "rigid" agreement on "compulsory workout" - it will turn employees away from the company. The second option is to provide a higher income so that it is not "bought out" by competitors. And this is not a very simple process...
In short - the idea is good, but there are nuances

Human resources are very valuable assets for a company.  Most of the companies know that by developing human resources, the company can progress much faster.  Oil companies spend a lot of money on human resource development.  Talent development through education, strategy, intelligence etc. play a role in creating human resources. However, the world is improving now. It is now seen in almost companies that they are giving more priority to virtual bots than human resources.

However, it should be taken into account that AI will continue its active attack on all spheres of human activity. It is not excluded that in 5 years, humans will be replaced in more than 30% of the work that is now performed only by humans. Therefore, one should not be complacent about the fact that AI is still imperfect

Frankly so is the distinction between human capital and workforce. No idea can really work without having the right person to interpret the idea into physical form/structure.
 Even the government needs human capital, in the form of intelligence. The right intelligence I mean.
 It is a quality invested human capital, that can lead a workforce and automate an AI to achieve the desired and well implemented idea to maximum efficiency.

The importance of the right human capital in the success of a company is and never be overlooked.

Diversity in hiring used to mean ranges of individuals with diverse skill sets. Now, companies have turned diversity hiring to be based solely on race and not skill, sometimes turning down more qualified candidates who aren't of a particular skin color.

I suppose the logic is that diversity in race adds to social capital of a team -- but it's been refuted over and over again that race as a factor alone improves dynamics in the workforce or in academia. No evidence that "diversity hires" do anything but add to a company's ESG score.

Hopefully, it's not going to happen in the future though. Because if it did, then we might be in the era wherein AI will be totally replaced the human capital and that is a scary thought.

But as far as human assets goes, yeah, CEO's and companies have known this for years already, that a company success depends on it's employee and that's why they have given them perks and others intangibles that to stay with them and make the company grow.

Yep, if the developed country can find a qualified worker who's live in underdeveloped country, why not?

Let's say there's an employer who work in US company is looking for frontend developer, the average salary in US for this job maybe $10,000 per month, but the average salary in third world countries for this job is only $500 and they will be very happy if they get paid $1,000, the company can save $9,000 per month.

That's an old tactic, companies doesn't need to hire these people anymore and have them immigrate to the company of the country, they just outsource them which is much cheaper as they don't have to pay them as if they work in the company's country. That's why there's a rise in virtual assistant jobs in my country, the only time they're probably going to let their outsourced immigrate is when they really like that employee and want to meet them face to face.

Al will not take the place of human capital you know why? Because they are different. Human capital is not necessarily same as workforce or when they say human capital, it doesn't only mean work force even though a means to know efficiency of human capital is either in the workforce or employee (s). So we can talk about human capital even if a company has one workforce. In other words, Al may eat up the work population or labour population but human capital still exist in the remaining staff, after all there is collaboration between employee and AL. More to this is that human capital is more superior than Al because Al is a product of human capital and it takes command from human capital. A more efficient worker is more productive with Al.

Humans are active actors in advancing and harming a company both small companies and large companies. Not only for companies humans become valuable capital, but humans are valuable capital for this nature.

Because it is equipped with reason that makes humans different from other creatures, the understanding of human capital can be interpreted by many experts as a capital that is directly processed by the production process as said by Gary S. Becker in the book Human Capital: A Theoretical and Empirical Analysis With Special Reference to Education, Third Edition.

AI is only man -made. AI proof that humans are valuable capital in realizing something useful.

Bitcoin Capital 

Maybe I am the only one who has had this thought, and maybe I am wrong too, but I am of the opinion that the Investment in Human Capital will soon be converted to investment in Artificial Intelligence to take over some of the jobs of workers who make up the workforce in some companies. A lot of Jobs done by humans for a company can now be automated needing lesser staff. Many workers will be cut off. Human resource of companies will take a new face with the inclusion of human supervised machines to work.

Human capital is the resource that many countries are looking for that provide better job opportunities, immigration, or free study, as they save themselves a lot of time. Instead of waiting for the new generation, they search for people with experience and employ them or qualify them with high certificates and for smaller amounts. For individuals and societies, relationships represent wealth similar to their material value. A person who has good relationships and is active in society is similar to someone who has wealth. He can easily double his money once he achieves it, and he can get good jobs with fewer skills.

Very true, anyone who has worked for a company knows that in most company they don't really care about heir employee, all they care is profit. Everything that company do for their employee is so their employee can generate much more profit for the company. All those companies will not hesitate to just dump any employee if they aren't considered as profitable anymore. After all, the 'Human Capital' or 'Human Resources' is the easiest resources to be exploited.

In every enterprise, there's the human capital. It's like in every sector and industry that's needing human manpower.

But who knows if someday that because of the AI and the upgrade, innovation of technology, there will be industries where they will be no longer needing human capital because they're all reliant to machines.

Anyway, IMHO, there's always the need for a human capital whether there are machines, AIs or technology embedded business. There's a need for someone to operate and monitor those.

In reality, big companies are doing it until they need the employees and once there is a way to cut short their expenses on salary, no big company hesitates or is willing to lose their profit instead of firing people so there is always some dark story behind every company we may or may not know.

But as you said if they keep the employees happy the results will be more efficient but I am afraid of what the future holds for us, especially with the development of AI, people are gonna lose their jobs and they have to prepare themselves for it with an alternative revenue stream.

So human capital is the right term because on my head it was the core people or core employees that are kind of the blood of the company. This is really helpful to those companies that are wanting success no matter if they are start-ups or established companies because those are the people who do the job just to continue the transaction of the company. It is just sad that even though they already have those assets people they aren't paid well. I'm not saying all that but I've been from a company like that where they haven't taken care of their employees, they always think badly of them and the truth is that if all of those employees resign the company will fail.

Investing in human capital is crucial for any company's success. A satisfied and motivated workforce can significantly boost productivity and contribute to the overall growth of the business. It's not just about the number of hours worked, but the quality of work that matters. Providing a conducive work environment and acknowledging the value of employees goes a long way in achieving success. Great insights.

Working 4-days setup is much better than 5/6-days I definitely agreed with this statement of yours because working tirelessly will reduce the quality of the product, human are not machines they eat and drink and also get tired so given them a little breathing space will allow them to do good quality job and the company will be in fourth front. I am a factory worker, I left my former company due to the abused of Human Capital, in that company work 7am to 7pm with just one hour break, now if you calculate it we are working 11 hours straight without rest.

Human Capital is one of the biggest investments a company can have that easily and surely produce many advantages and possible profit for the business. However, it is always best to know (especially if you are an employee) if the company you are working for is not giving value for the things you are giving them (in this case being a human capital/asset for the company). I have seen and know a lot of employees who have great background education, amazing skills, and have such loyalty and dedication to the company that they are either paid less than they deserve or are never promoted. In the case of never getting promoted companies do this to avoid a raise for an employees rate, especially when they know that said employee is already doing more than what they are supposed to do without the raise in salary and position promotion. The point here is that much like the company itself employees should also know how much value they have in a company as they are after all the company's human capital.

"Human Capital" , I implicitly understand that it is human merit

Unlike merit on the forum, here I can understand it as a basic thing and the source for developing everything. Perhaps this term will be heard a lot in religions.

I feel that life operates in a fair way, and every result is created for a reason, from success or failure there is a reason for it. Similar to the example of growing an apple, if you want to have a delicious fruit, there are many factors to create it and vice versa, we ourselves as humans seem to be forgetting these truths in life. There is no need for anyone or any organization to do any research, just feel for yourself if the criteria the OP mentioned (not complete), I believe will be part of the subsequent success.

In the age of Digital AI this term human capital will become much more well known in the future. And so will Bitcoin Capital 

Human capital is one great asset a company that desires to grow must have. Multinationals like Banks and oil companies spend a lot on human resources manager. The reason is to strengthen the mental capacity of their workforce, because they believe those workers are their image makers. The marketing department of any organization, does a lot of training and retraining of their staff, because this staff's go out to sell the companies product to the outer world and as such, they should be well informed.

China today is one of the leading force in the manufacturing industry in the world, this is because they have a high level of productive workforce (Human capital) that are well trained in different fields of production and manufacturing. So human capital is one key aspect of an emerging economy or a business that shouldn't be toyed with but rather be harnessed and improved upon.

I always admire companies and businesses, big and small, that heavily invest in human capital. A happy, healthy, and satisfied worker will always be a lot more productive than a worker who is underpaid, overworked, and is only keeping the job merely for the reason that he/she needs to eat three times a day. That's regardless of working hours.

There have already been numerous studies conducted in many parts of the world, for example, that found out that a 4-day working setup is much better than the usual 5/6-day working setup, not only in terms of the workers' health but even in terms of their productivity. Work-related burnout or stress which affects the workers' health and even personal relationships or social life affect their productivity. They'd be less active, less driven, less critical, and so on.

I browsing the internet when I happen to stumble on the word Human Capital.  This is the first time I read about this terms and I got interested to know its meaning. 

According to this article[1]  Human Capital is explained as an intangible asset stemming from a person's talent and experience although it can't be put on our balance sheet but it is very important economic value  for a company.

Investopedia also explained Human Capital as[2]:

"The term 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."

The article also stated that Human Capital can be made of several factor such as shown in the picture:




It is also stated that there are different types of Human Capital Namely:

• Knowledge Capital: Trade School Education, College Degree, Hard skills, Work experience, Situational Knowledge and Intelligence.
• Social Capital: Relations, Fame, Social Status, Professional Network and Health.
• Emotional Capital: Emotional intelligence, Creativity, Problem-solving, Personal resilience, Critical thinking, Loyalty, Leadership behaviors, Other soft skills

The article also gives a tips on increasing Human Capital like:
Human Capital can be increased by hiring more people but it is also possible to improve within the workforce.

• Improve education for your workforce
• Provide a work culture that encourages creativity
• Divide labor into specialized niches
• Hire a diverse workforce
• Provide ongoing coaching

The importance of human capital. 

Human Capital are people that make up a company workforce.  So choosing people with higher human capital simply means more beneficial for a company.  This is also the reason why many companies are spending lots of funds to give training to their employees.  Through it was stated that these training expenditures may temporarily decrease the company funds, the company will surely benefits from it since the investment will allow the employee to do their task efficiently thus delivering more profit to the company.

So for any investors that are aspiring to put up their company own company, one should consider learning about Human Capital because it will really lead a company to success if one manage it successfully.

For FAQ about Human Capital you can check this site: https://www.worldbank.org/en/publication/human-capital/brief/the-human-capital-project-frequently-asked-questions

---

[1] https://www.betterup.com/blog/human-capital
[2] https://www.investopedia.com/terms/h/humancapital.asp