Investing in Human Capital

Human capital is the attributes a person, or a group of people, possesses that are productive in an economic context (Econterms, n.d.). This intangible organizational asset can improve an organization only if employees are engaged in their work. Human capital is not simple to measure but, it can help push an organization to greater success (Peer, n.d.).

Organizations are continually striving to improve their employees’ productivity in order to drive its organizations overall value. One way firms can drive this value is through human capital development programs. These programs are a great way for firms optimize their workforce, achieve business goals, and create long term sustainability. To achieve this task, organizations will need to invest resources to make certain that employees have the knowledge, skills, and proficiencies they need to work successfully in a quickly changing and complex environment (Marimuthu, Arokiasamy & Ismail, 2009). These resources will help to keep employees engaged in their workplace and motivate them to keep performing at their highest. Employees who are unable to find fulfillment in their current jobs will often look for a more satisfying work environment, diminishing their current workplace's human capital (Peer, n.d.). Human capital development is an important aspect in advancing an organizations performance and success.

Investing in human capital is much like the traditional idea of investing. Human capital is an investment in employees’ education, training, and job skills which can yield revenue and other benefits over a long period of time. These investments can deliver returns to the individual employee as well as to the organization as a whole. The returns to an organization are increased productivity and an improved workforce. Both which can bring higher revenue to an organization and it’s stakeholders.