Glossary – Human Capital

Definition

The skills, talent, and knowledge that the employees of a company possess, measured in terms of economic value to the employer.

Example

Human capital can either be acquired from external sources or developed within an organization. This is usually done by recruiting new employees or providing on-the-job training and development programs for employees.

Relevance

Skilled and well-trained employees may result in a competitive advantage for companies. Therefore, it is essential for those firms to invest in their human capital to be successful in the long run. Furthermore, employees often request education opportunities, thus investing in human capital will positively affect their motivation.

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