WHAT IS HUMAN CAPITAL?

 

As the most crucial factor of production which gives value to the remaining factors, the people working for the firm have been given several labels in various situations – staff, worker, labor, and employee among a few others.

Human Capital refers to the economic value of a worker’s training, experience, and skills. Besides the definition of human capital as the human being, human capital also refers to the varied qualities acquired by an employee in any given business setup that when engaged efficiently, translates into profits for the business. They include communication, analytical skills, education, technical skills, creativity, experience, mental health, and personal resilience.

The idea of Human Capital can be traced to the 18th century when business owners regarded people as tools needed to turn out goods for sale or hands to deliver a particular service targeted at fetching them monetary value. In the relationship that existed, business owners did not have anything to do with what the employees thought or felt about the work at hand – they were more of the brains of the business and the workers were the limbs to execute the already determined workplan.

As tough, inconsiderate, and hostile as the historical relationship between business owners and workers was, the narrative has largely changed today. There is a completely different approach to employee relations in today’s world of work. Any business management or leader that undervalues or underestimates the place of employees is simply not interested in staying in business, let alone becoming competitive in any industry.

In today’s labor market, there are three main categories of labor available: the unemployed, the underemployed, and the employed. While the unemployed have no form of engagement from which they get paid, the underemployed have some arrangement with an individual or a firm usually engaged in works they did not train for or doing things they over-qualify for, as a result of the lack of their desired jobs, they make do with such engagements for some wages just to earn a living. The employed are the group of top-notch employees who are formally engaged with work at probably a senior staff level but always on the lookout for another higher-level job along their career pathway.

Each person who desires to be employed in any job setting must develop him or herself to be relevant to the business goals of the firms they want to be a part of. Unlike the times past, individuals who are looking for job offers must know what they have and find who needs to engage their skills for value translated as profits. In the same vein, already employed workers who have not justified their role and place in the achievement of the firm’s goals are being dropped off in building efficiency. What sort of human capital are you? Are you a capital to the gains of the firm or you are a member of the staff? Thank you for reading. Please let us know what you make of this article in the comment section.

 

Paul Anang Amasah

THE COLLEGE BUSINESS CONSULT

thecollegebc@gmail.com

Comments

  1. This comment has been removed by the author.

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  2. Every human being is a resource, to be unemployed means you are not being very resourceful to the marketplace and if you have a degree and still unemployed, it simply means you wasted the intellectual and financial resources invested into you to be resourceful.

    To be underemployed means you are working hard enough from getting fired and your employer pays you well enough from quitting.

    How valuable you are to a company determines how much you are paid. If I help a firm make $20,000.00 a month, it's not difficult for them to invest 20% of that in you to keep on making $20,000.00 and more.

    What skills, ideas, knowledge, products do you have or can you provide to solve a public pressing need?

    "There is No Defense Against an Excellence that Meets a Pressing Public Need." Les Brown

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  3. This is very insightful

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  4. This was very educational

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